EU consumers’ right of withdrawal: new conditions to apply for distance selling and off?premises contracts on 13 June 2014

by K&L Gates LLP
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The new Directive n° 2011/83/EC of 25 October 2011 on consumer rights (the “new Directive on Consumers Rights”) provides a harmonized 14-day right for consumers to cancel their orders and to be reimbursed. These new conditions shall apply in all EU Member States as of 13 June 2014 to distance selling and off-premises contracts between a company or a professional and a consumer.

As of this date, the new Directive on Consumers Rights will replace the Doorstep Selling Directive of 1985 and the Distance Selling Directive of 1997, which provided a minimum withdrawal period of seven days, resulting in different rules throughout the EU.

In light of these changes, companies should review their current terms of sale and policies to implement the new rules.

Scope and definitions

The right of withdrawal applies to the following categories of contracts:

  • Distance contracts, i.e. including mainly e-commerce contracts concluded between the trader and the consumer without the simultaneous physical presence of the trader and the consumer, with the exclusive use of distance communication means (such as mail order, internet, telephone or fax); and
  • Off-premises contracts, i.e. including mainly doorstep selling contracts between the trader and the consumer. This includes notably contracts concluded in the simultaneous physical presence of both parties in a place which is not the business premises of the trader, or concluded during an excursion organized by the trader to promote and sell goods or services to the consumer.

Exemptions to the right of withdrawal for food and food supplements

The new Directive on Consumers Rights contains a list of cases in which the right of withdrawal does not apply, including those concerning:

  • Goods which are liable to deteriorate or expire rapidly - this would typically concern fresh food products which would be suitable for consumption for a limited period of time after their delivery to consumers ;
  • Sealed goods which are not suitable for return due to health protection or hygiene reasons and were unsealed after delivery - this would typically concern food supplements, beverages or cosmetics delivered in a sealed bottle or container ; or
  • Goods which are, after delivery, according to their nature, inseparably mixed with other items.

Therefore, except if food and food supplements companies fall within any of these categories, they should fully comply with the right of withdrawal described below. If applicable, companies should clearly specify in their terms of sale the application of the exceptions above to their products.

The 14-day withdrawal period

The new Directive on Consumers Rights applies a single withdrawal period to all distance and off-premises contracts. In these cases, the withdrawal period expires after 14 days from the day on which the consumer acquires physical possession of the goods.

However, the withdrawal period may have a different starting point depending on the situation:

  • In the case of multiple goods ordered by the consumer in one order and delivered separately, the withdrawal period shall start on the day on which the consumer acquires physical possession of the last good;
  • In the case of delivery of a good consisting of multiple lots or pieces, the withdrawal period shall start on the day on which the consumer acquires physical possession of the last lot or piece; and
  • In the case of contracts for regular delivery of goods during a defined period of time, the withdrawal period shall start on the day on which the consumer acquires physical possession of the first good.

Obligation to inform the consumer about his/her withdrawal right

According to the new Directive on Consumers Rights, before the consumer is bound by a distance or off-premises contract, or any corresponding offer, the trader must provide the consumer with:

  • Information regarding the conditions, time limit and procedures for exercising his/her right of withdrawal; and
  • The model withdrawal form set out in Annex I(B) of the new Directive.

If the trader does not provide the consumer with this information, the withdrawal period shall expire 12 months from the end of the initial 14-day withdrawal period.

However, if the trader has provided the consumer with such information within 12 months from the end of the initial 14-day withdrawal period, the withdrawal period shall expire 14 days after the day upon which the consumer has received that information.

Exercise by the consumer of his/her right of withdrawal

If the consumer wishes to exercise his/her right of withdrawal, he must inform the trader in writing of his/her decision - before the expiration of the 14-day period - through either:

  • The model withdrawal form contained in Annex I(B) of the new Directive, or
  • Any other unequivocal statement setting out his/her decision to withdraw from the contract.

The consumer will have to prove that he has exercised his/her right of withdrawal within the withdrawal period.

Consequences of the withdrawal

If the consumer exercises his/her right of withdrawal within the withdrawal period, the trader must:

  • Reimburse all payments received from the consumer, including, if applicable, the costs of delivery, no later than 14 days from the day on which he/she is informed of the consumer’s decision to withdraw from the contract (except for the supplementary costs, if the consumer has expressly opted for a type of delivery other than the least expensive type of standard delivery type offered by the trader); and
  • Carry out such reimbursement using the same means of payment as the consumer used for the initial transaction, (i) unless the consumer has expressly agreed otherwise and (ii) provided that the consumer does not incur any fees as a result of such reimbursement.

However, unless the trader has offered to collect the goods himself/herself, he/she may withhold the reimbursement until he has received the goods back, or until the consumer has supplied evidence of having sent back the goods.

The consumer will have to:

  • Send back the goods (or hand them over to the trader or to a person authorized by the trader to receive the goods), no later than 14 days from the day on which he/she has communicated his/her decision to withdraw from the contract.
  • Bear the direct cost of returning the goods if the trader has clearly informed the consumer that the consumer has to bear these costs prior to the conclusion of the contract. Otherwise, the trader has to bear these costs.

However, in the case of off-premises contracts where the goods have been delivered to the consumer’s home at the time of the conclusion of the contract, and if by their nature, those goods cannot normally be returned by post, the trader shall collect the goods at his/her own expense.

In addition to the withdrawal right, the new Directive on Consumers Rights sets out a European framework with minimum standards with which e-commerce businesses active in the EU must comply with when trading with consumers. Companies should review their websites and terms of sale to comply with these new rules.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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