E-commerce - Part 2 - The how-to of Seeds of Law

In our previous article, we presented a first series of elements and practical and legal aspects of an e-commerce activity. 

As you have already read, e-commerce is in principle a distance contract which is regulated by the Code on Economic Law (Wetboek Economisch Recht-Code de droit économique (hereinafter “WER-CDE”)). 

In this article, we discuss all the obligations imposed by the WER-CDE for distance contracts and more specifically e-commerce.

According to the WER-CDE, there is a distance contract if it has the following characteristics :

• it is an agreement concluded between an enterprise and a consumer;
• within the framework of an organised system for distance sales or services without the simultaneous physical presence of the enterprise and the consumer; and
• which, up to and including the moment at which the contract is concluded, makes exclusive use of one or more means of distance communication, namely e-commerce via a webshop, telephone sales, mail order sales, etc.

As soon as a professional puts its services or its products up for distance selling (or by electronic means) he has to respect the following conditions.

1. Compulsory information in the framework of a distance contract

1.1 Information that has to be disclosed before the consumer is bound by a distance contract

Before the consumer is bound by a distance contract, the enterprise has to provide him with the following information in a clear and comprehensible manner:

1.1.1 Information regarding the selling products and enterprises identity

• The identity of the enterprise or the enterprise on whose behalf one is acting: its enterprise number, its trade name, the geographical address where it is established, as well as its telephone number, its fax number and its e-mail address.
  
  The geographical address of the place of business of the enterprise (and where applicable that of the enterprise on whose behalf one is acting) where the consumer can address any complaints, would that address be different from the first address;
  
  This information should assure that the consumer has the possibility to contact the enterprise rapidly and to communicate efficiently.
  
  
• The main characteristics of the goods and services;
  
  
• The total price of the goods or services inclusive of taxes, additional freight, delivery or postal charges and any other costs.
  
  Where the nature of the goods or services is such that the price cannot reasonably be calculated in advance, the manner in which the price is to be calculated.
  
  In the case of a contract of an indefinite duration or a subscription contract, the total price must include the total amount of costs per billing period. Where applicable or, where those charges cannot reasonably be calculated in advance, the fact that such additional charges may be payable. 
  
  Should a fixed rate be applicable for those contract, also the total monthly costs must be included in the price. Should this reasonably not be possible, the calculation method of the costs must be communicated.
  
  
• Where applicable, the arrangements for payment, delivery, performance, the time frame within the enterprise undertakes to deliver the goods or to perform the service, and the enterprises' complaint handling policy;
  
  
• A reminder of the existence of a legal warranty of conformity of goods;
  
  
• The cost of using distance communication for the conclusion of the contract when this cost is calculated on another basis than the standard rate;
  
  
• Where applicable, the existence and the conditions for assistance and after-sales services and commercial guarantees;
  
  
• Where applicable, the existence of codes of conduct and how a copy can be obtained.
  
  

1.2  Information regarding the right of withdrawal

1.2.1 Withdrawal period of 14 days

The consumer has a period of 14 days to withdraw from a distance contract, without giving any reason, and without incurring any costs other than the direct cost of returning the goods.

In case of withdrawal, the enterprise has to reimburse all payments received from the consumer, including those covering the expenses to deliver goods to the consumer.

The enterprise does not have to refund the additional delivery costs if the consumer expressly chose a delivery way other than the one offered by the enterprise.

The enterprise shall provide the following information regarding right of withdrawal:

1. Where a right of withdrawal applies, the conditions, delays and procedures for exercising that right, as well as a model withdrawal form (as set out in the Annex to Book VI of the WER-CDE);
2. If applicable, the fact that the consumer will be charged for the direct cost of returning the goods, and if the goods, because of their nature, cannot be returned by post;
3. Where a right of withdrawal does not apply, information in this respect or if applicable, the circumstances under which the consumer loses its right of withdrawal. 

It should be noted that any omission concerning the right of withdrawal is sanctioned by an extension of the term during which the consumer has the right to use his right to withdrawal. The withdrawal period shall expire twelve months after the end of the initial withdrawal period (of 14 days). 

However, as soon as the enterprise has given the consumer the required information, the withdrawal period expires 14 days after the day on which the consumer has received such information.

1.2.2 Legal exceptions to the right of withdrawal

According to the law, the right of withdrawal shall not apply with respect to the following goods and services:

• Service contracts that have been fully performed and of which the performance started with the consumer's prior express consent and the acknowledgement by the consumer that his right of withdrawal will be lost once the contract is fully performed by the enterprise;
• Goods produced according to the consumer's specifications or that are personalised (e.g. a car adapted for a disabled person or cars with very special options, a tailormade suit);
• Perishable goods (e.g. food);
• Sealed goods that cannot be return because of health or safety protection reasons and which were unsealed by the consumer (e.g. underwear, beach wear);
• The provision of accommodation (except for housing purpose), transport, car rental services, catering or leisure services as regards contracts providing for a specific date or period of performance;
• The supply of newspapers, periodicals and magazines except for the subscription contracts to these publications;
• The supply of digital content not supplied on a physical medium if the performance has started with the consumer's prior express consent, and the acknowledgement that, as a consequence, he will lose his right of withdrawal.

1.3 Information regarding the contract terms and the consumer obligations

The following information must also be provided:

• The duration of the contract, or, if the contract is of an indefenite duration or can be extended automatically, the conditions for terminating the contract;
• The minimum duration of the consumer’s obligations under the contract;
• The existence and the conditions of deposits or other financial guarantees to be paid or provided by the consumer at the request of the enterprise;
• If applicable, the possibility of having recourse to an out-of-court complaint and redress mechanism, to which the enterprise is subject, and the methods for having access to it.

1.4 Information in case of the sale of digital products

• The functionality, including applicable technical protection measures, of the digital content;
• Any relevant interoperability of digital content with hardware and software that the enterprise is aware of or can reasonably be expected to have been aware of.

2. Compulsory information prior to the conclusion of an e-commerce contract  

As mentioned before, e-commerce relates to the conclusion of a distance contract by electronic means with the obligation for the consumer to pay a certain amount.

In case of e-commerce, in addition to the mandatory information for distance contracts, enterprises have to inform the consumer, in a clear and prominent manner, and immediately before the consumer places his order, of the following:

• The main characteristics of the product;
• The total price of the goods or services inclusive of taxes and costs (see point 3.1);
• The duration of the contract or, if the contract is of an indefinite duration or can be extended automatically, the conditions for terminating the contract;
• If applicable, the minimum duration of the consumer’s obligations;

The enterprise shall ensure that the consumer, when he confirms his order, explicitly acknowledges that the order implies an obligation to pay.

If an order entails the activation of a button or a similar function, that button or similar function must be labelled in an easily legible manner with the words "order with obligation to pay" or a corresponding similar unambiguous wording.

If the enterprise does not comply with this obligation to infirm, the consumer will not be bound by the contract or the order.

The e-commerce websites indicate must clearly and readably indicate, at the latest at the starting of the ordening process, wether delivery restrictions apply and which means of payment are accepted.

3. Confirmation of the distance contract

The consumer shall receive confirmation of the conclusion of the contract, on a durable medium (e.g. e-mail), within a reasonable time after the conclusion of any distance contract, and at the latest at the time of the delivery of the goods or before the start of the performance of the service.

This confirmation should contain the following information:

• All the information listed in section 1 above, unless the information has already been provided to the consumer prior to the conclusion of any distance contract on a durable medium; 
• The express prior consent of the consumer to the immediate supply of a digital content, which is supplied on a tangible medium and his acknowledgement that he loses his right of withdrawal.

4. Delivery of goods

Unless the parties have agreed otherwise, the enterprise shall deliver the goods at the latest thirty days after the day of the conclusion of the contract.

The question then arises as to when the risk of loss or of damage to the goods passes to the consumer after they are dispatched. 

The dispatching of the goods is at the risk of the enterprise, unless the transportation is insured by the carrier appointed by the consumer, and if such transport is not offered by the enterprise.

The risk of loss of or damage to the goods passes to the consumer:

• when the consumer or a third party appointed by the consumer other than the carrier has obtained the physical possession of the goods, in contracts where the enterprise dispatches the goods to the consumer;
• at the moment of handing over to the carrier, if the latter is appointed by the consumer, and the enterprise did not offer the transportation.

5. Using opt-out systems is prohibited

It is important to note that enterprises are prohibited to infer consent by using opt-out systems, such as online pre-ticked boxes, which require extra payments. 

If the enterprise has not obtained the express consent of the consumer, but inferred consent by using standard options which the consumer must reject in order to avoid additional payment, the latter is entitled to a refund of such amounts paid.

6. Conclusion

Failure to comply with these requirements and conditions are irrevocably sanctioned with a number of fines and may cause the nullity of sales contracts that will make all the profits that can be expected from an e-commerce activity disappear like snow in the sun.

It is important that enterprises are aware of these obligations, since omissions of the required information can have as result that the consumer will not be bound by the contract.

It goes without saying that Seeds of Law can assist you by ...

• adapting your general terms and conditions;
• adjusting your privacy and cookie policy;
• optimising your contractual relationship with your suppliers;
• fine-tuning your revocation clauses so that you will not be overwhelmed by requests to take back products.

Do not hesitate to contact us on +32 (0) 2 747 40 07 or via info@seeds.law.