Distance Contracts

EU Consumer Rights Directive

The Consumer Rights Directive 2011 modifies and supplements the law set out in the earlier Distance Selling and Doorstep Contracts Regulations. There are five principal categories of transaction to which the regulations are applicable;

contracts for the sale of goods;
contracts for the supply of services;
contracts for the supply of digital content in an intangible medium;
contracts for the supply of electricity, water and gas not supplied in limited volumes or set quantities; and
contracts for the supply of district heating.

Different parts of the regulations apply, depending on where the contract is concluded namely, on premises, off premises or at distance.

Applies between Traders and Consumers

The regulations apply to contracts made between traders and consumers. A trader is a person or company (corporation) acting for purposes related to his or its business, trade, craft or profession. It includes persons acting for or on behalf of the trader. It encompasses bodies, whether privately or publicly owned or in mixed public-private ownership. It, therefore, covers businesses ranging from sole traders and partnerships to large-scale corporations.

A consumer is defined in the same manner as in other consumer legislation. He or she is a natural person acting outside his trade, business, craft or profession. The courts have held in other contexts, that a person in business is not a consumer even if the transaction is not one commonly entered in the course of his particular business.

The recitals to the Directive indicate that in the case of a dual-purpose contract, for the purpose of both business and private use, where the contract is concluded for purposes partly within and partly outside the person’s trade or business, and the trade purpose is so limited as not to be predominant in the overall context of the contract, that person should be considered a consumer.

Contracts Covered and Excluded

A sales contract under the regulations is a one under which a trader transfers or agrees to transfer the ownership of goods to a consumer in return for a price. It includes a contract that has as its objects both goods and services.

A service contract means a contract other than a sales contract, under which the trader supplies or undertakes to supply a service to a consumer and the consumer agrees to pay a price. The definition excludes the other types of contract referred to above, which are dealt with separately.

Certain types of contracts are excluded from the regulations. In some cases, there is other specific legislation applicable. They include the following:

contracts for social services;
contracts for healthcare;
contracts for financial services;
contracts for gambling;
contracts for the creation, acquisition or transfer of immovable property or rights in immovable property;
contracts for the construction of new buildings or substantial conversions of existing buildings;
contracts letting accommodation for residential purposes;
contracts for the supply of package holidays and package tours;
contracts within the scope of legislation on timeshares, long-term holiday products,
resale and exchange contracts;
contracts by a public officeholder who has a statutory duty to be independent and impartial and who must ensure by the provision of comprehensive legal information that the consumer only concludes the contract on the basis of careful legal consideration and with knowledge of its legal scope;
contracts for the supply of foodstuffs, beverages or other goods intended for current consumption in the household which is physically supplied by the trader on frequent and regular rounds to the consumer’s home, residence or workplace;
contracts concluded by means of automatic vending machines or automated commercial premises;
contracts concluded with a telecommunications officer through a public pay telephone for the use of the telephone;
contracts concluded for the use of a single connection by telephone, Internet or fax established by the consumer.

Many of the above areas are subject to separate regulations. Others are ones to which there would be practical difficulties in applying the requirements of the regulations.

Contracts for passenger transport services are partly excluded. The exclusion does not apply to certain information obligations.

States may exclude off-premises contracts from the legislation, for which the payment is less than €50. This is provided in the Irish Regulations.

Distance Contract

A distance contract is a contract concluded between a trader and a consumer under an organised distance sale or service provision scheme, without the simultaneous physical presence of the trader and the consumer. It is one made with the exclusive use of one or more means of distance communications, up to and including the time at which the contract is concluded. The organised distance sale or service provision scheme need not be run by the trader. It may include arrangements and platforms organised or managed by another and used by the trader.

The definition of a distance contract may potentially apply to a wide range of contracts. It includes contracts made through the internet, mail-order, telephone and fax. It may include contracts where a consumer visits the trader’s premises to gather information and later concludes a contract remotely.

A distance contract does not include

an agreement negotiated at the business premises and concluded by distance communication;
a contract initiated by distance communication but concluded at the business premises; and
reservations made by a consumer through distance communications to request the service such as making an appointment or booking etc. where the contract occurs after arrival at the premises.

Where the reservation constitutes the contract, the distance regulations may apply.

Off Premises Contract

An off-premises contract is a contract between a trader and consumer where:

the contract is concluded in the simultaneous physical presence of the trader and the consumer in a place which is not the business premises of the trader;
a contract for which an offer was made by the consumer in the simultaneous physical presence of the trader and the consumer in a place which is not the business premises of the trader;
a contract concluded on the business premises of the trader or through any means of distance communication immediately after the consumer was personally and individually addressed in a place which is not the business premises of the trader, in the simultaneous physical presence of the trader and consumer;
a contract concluded during an excursion organised by a trader with the aim or effect of promoting and selling goods or services to the consumer.

The above provisions apply to so-called doorstep contracts and contracts entered at the consumer’s workplace. However, the scope of the definition is considerably wider than these cases.

Business Premises

A business premises is either an immovable retail premises where the trader carries on activity on a fixed basis or a movable retail premises where the trader usually carries on its activities. The Directive gives the following examples:

premises in whatever form, such as shops, stalls or lorries that serve as a permanent or usual place of business for the trader;
market stalls and fair stands that serve as a permanent and usual place of business for the trader;
business premises of a person acting in the name of, or on behalf of a trader;
retail premises where the trader carries out activity on a seasonal basis, for example during the tourist season or at a ski or beach resort, where it usually carries on the activity.

Where, in contrast, such places are used on an exceptional basis, they are not business premises for the purpose of the Regulations.

Where the trader first comes to the consumer’s home with a view to making an estimate or arrangements without a commitment, and the contract is then concluded at the business premises, the regulations do not apply.

On-Premises Contract

An “on premises” contract is a contract, other than a distance contract or an off-premises contract. The 2013 regulations require the provision of consumer information in relation to an “on premises” contract.

Traders must give prescribed information to the consumer before the consumer is bound by an on-premises contract. The information must be set out in a clear and comprehensible manner unless the information is already apparent from the contract.

Required Information for On-Premises Contract

The information to be provided is as follows:

the main characteristics of the goods or services to the extent appropriate to the medium and to the goods or services
the identity of the trader, including the trader’s name and legal identity;
the geographical address at which the trader is established and the trader’s telephone number;
the total price of the goods or services inclusive of taxes;
where the nature of goods or services is such that the price cannot be reasonably calculated in advance, the manner in which the price is to be calculated;
where applicable, all freight, delivery or postal charges additional to the price referred to above or where they cannot be reasonably calculated in advance, the fact that charges may be payable;
where applicable, the arrangements for payment, delivery, performance and the time by which the trader undertakes to deliver the goods or perform the service;
where applicable, the trader’s complaint handling policy;
in the case of a sales contract, the existence of a legal obligation on the trader to supply goods that are in conformity with the contract;
where applicable, the existence and conditions of after sale services and commercial guarantees;
the duration of the contract where applicable, or if the contract is of indeterminate duration or is to be extended automatically, the conditions for terminating it;
where applicable, the functionality including technical protection measures of digital content;
where applicable, any relevant interoperability of digital content with hardware or software, of which the trader is or can reasonably be expected to be aware.

Exceptions

The on-premises obligations are subject to a number of exceptions. The requirement to provide information about the existence of a legal obligation on the trader to supply goods in conformity with the contract and other consumer rights, applies to a sales contract only. Certain of the obligations apply, only where applicable. For example, where the relevant policies do not exist, the statements need not be provided.

If the information is apparent from the context, it need not be provided. It may be available on packaging and signs etc. and this may suffice in many cases. The information obligation does not apply to contracts that involve day to day transactions and that are performed immediately when the contract is made. This will typically apply to purchases in shops, restaurants, and other retail outlets.

The failure by the trader to comply with its obligations is an offence. The regulatory authority may take civil or other action.

Distance and Off-Premises Sales

In distance and off-premises sales, the trader must provide the specified information both pre-contract and post contract. Before a consumer is bound by an off-premises contract or offer, the trader must provide specified information. Where there is a right to cancel the contract, the model form of cancellation certificate must be provided.

The required information is as follows:

the main characteristics of the goods or services to the extent appropriate to the medium and to the goods or services concerned;
the identity of the trader, including the trader’s trading name;
if the trader is acting on behalf of another, the geographical address and identity of that other trader;
the geographical address at which the trader is established; the telephone number, fax and e-mail address where available, to enable the consumer to contact the trader quickly and communicate efficiently;
the geographical address of the place of business of the trader to which the consumer may address complaints, if different to the above;
where the trader acts on behalf of another, the place of business of that other, to which the consumer may address complaints;
the total price of the goods or services, inclusive of tax
where the nature of the goods or service is such that the price cannot reasonably be calculated in advance, the manner in which the price is to be calculated;
where applicable, additional freight, postal charges and other costs; where those charges cannot reasonably be calculated in advance, the fact that such charges may be made;

Further Required Information I

The following information is also required;

in the case of contracts of indeterminate duration or containing a subscription, the total cost per billing method, where contracts are charged at a fixed rate, the total monthly costs or where the total cost cannot reasonably be calculated in advance, the manner in which the price is to be calculated;
the cost of using the means of distance communication, used for the conclusion of the contract, where this is other than at the basic rate;
arrangements for the payment, delivery, performance and time by which the trader undertakes to deliver the goods or perform the service;
where applicable, the trader’s complaint handling policy;
where a right to cancel exists, the conditions, time limit, and procedures for exercising that right in accordance with the legislation;
where applicable, that the consumer will have to bear the cost of returning the goods in case of cancellation and in the case of distance contracts, if the goods by their nature cannot normally be returned by post, the cost of returning the goods;
where the consumer exercises the right to cancel after having made a request in accordance with the regulations, that the consumer is liable to pay the trader’s reasonable costs in accordance with the regulations;

Further Required Information II

The following information is also required;

where the right to cancel the contract does not apply under the regulations, confirmation that the consumer will not benefit from that right or where applicable, the circumstances in which the consumer loses that right;
in the case of a sales contract, the existence of a legal obligation on the trader to supply goods that are in conformity with the contract;
where applicable, the existence and conditions of customer assistance, after sale services and commercial guarantees;
the existence of relevant codes of practice where applicable, how copies of such codes can be obtained;
the duration of the contract, where applicable or if the contract is of indeterminate duration or is to be extended automatically, the conditions for terminating it;
where applicable, the minimum duration of the consumer’s obligations under the contract;
where applicable, the existence and conditions of deposit or other financial guarantees to be paid or provided by the consumer at the request of the trader;
were applicable, the functionality including applicable technical protection measures of digital content;
where applicable, any relevant interoperability of digital content with hardware and software of which the trader is or can reasonably be expected to be aware;
where applicable, the possibility of having recourse to an out of court complaint and redress mechanism, to which the trader is subject and the methods for having access to it.

Explicit Consent to Payment Obligation

Before a consumer is bound by a contract or an offer, the consumer’s express or explicit consent is required for any payment, additional to that for the trader’s main obligation. Consent may not be taken from a default option which the consumer must specifically reject in order to avoid the obligation to pay. The consumer must positively agree to pay. A pre-ticked box is accordingly not permitted in relation to the obligation to pay.

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