Prior Information and Cancellation [EU]

Table of Contents

Prior Information (all Contracts)

The provision of information is a key aspect of consumer protection. The information made available to consumers must be sufficiently clear and reliable so that they can make effective choices. There is a range of disclosure obligations. The required information is intended to make consumers aware of the property of the goods. In some cases, warnings are required.

Before concluding a contract, traders must provide to consumers, in clear, understandable language, information, such as:

their identity and contact details,
the product’s main characteristics, and
the conditions that apply, including payment terms, delivery time, performance and duration of the contract and termination conditions.

In shops, only information which is not already obvious must be provided.

Information requirements, particularly on the right of withdrawal, are more detailed for postal, telephone or online contracts and off-premises purchases (where a trader visits a consumer’s home). Before entering an off-premises contract, the consumer must receive clear and comprehensive information about the service or goods and the right to withdraw.

This applies to contracts over the internet but also telephone, e-mail, and other remote communication. It covers doorstep sales and sales made generally other than at the trader’s a fixed place of business. The rules do not apply to financial services package holidays and contracts relating to immovable property, for which there are separate rules.

There are partial exemptions for goods intended for consumption in the household supplied by regular agreement and contracts relating to tourism and transport.

Prior to the conclusion of off-premises contract, the consumer must be provided with clear and comprehensible information concerning

identity and address of the supplier
characteristics of goods and services and their price
arrangements for payments delivery or performance
the existence of a right to withdraw
the period in which the offer remains valid and minimum duration of the contract were applicable
cost of using the means of distance communication

In the case of telephone calls, the identity and commercial purpose must be made clear at the beginning of the transaction. Information must be given in good faith.

The consumers must receive written confirmation in a durable medium (e.g. a pdf e-mail attachment at the time of performance of the contract. The following information must be given in writing as well

arrangements for exercising rights of withdrawal
a place to which complaints may be addressed
information regarding after-sale service
conditions under which contracts may be terminated

Right to Cancel Off Premises Contracts

Contracts entered between traders and customers away from the place of business may be cancelled within a certain period by the consumer.

Consumers can withdraw from distance and off-premises contracts within 14 days of the goods’ delivery or conclusion of the service contract, subject to certain exceptions, without any explanation or cost. A standard withdrawal form provided by the seller suffices. If the consumer is not made aware of their rights, the withdrawal period is extended by 12 months.

The supplier must repay the amounts paid by the customer within 30 days. There are certain types of contract to which the right of withdrawal does not apply. Credit agreements concluded with the supplier or a third-party on the basis of the agreement may also be cancelled

Exemptions apply for rapidly perishable goods, sealed goods opened by the consumer which cannot be returned for health or hygiene reasons, and hotel reservations or car rentals which are tied to specific dates.

Consumer Rights to Performance

The supplier must generally perform when due or in any event within 30 days. If it fails to do so the consumer may call on him to perform and give additional time. If he does not perform the sums paid must be refunded.

Prior Information (all Contracts) (Reformed Position) I

Before concluding a contract, traders must provide to consumers, in clear, understandable language, information, such as:

their identity and contact details,
the product’s main characteristics, and
the conditions that apply, including payment terms, delivery time, performance and duration of the contract and termination conditions.

In shops, only information which is not already obvious must be provided.

There are partial exemptions for goods intended for consumption in the household supplied by regular agreement and contracts relating to tourism and transport.

Prior Information (all Contracts) (Reformed Position) II

Prior to the conclusion of an off premises contracts, the consumer must be provided with clear and comprehensible information concerning

identity and address of the supplier
characteristics of goods and services and their price
arrangements for payments delivery or performance
the existence of a right to withdraw
the period in which the offer remains valid and minimum duration of the contract was applicable
cost of using the means of distance communication

In the case of telephone calls, the identity and commercial purpose must be made clear at the beginning of the transaction. Information must be given in good faith.

arrangements for exercising rights of withdrawal
a place to which complaints may be addressed
information regarding after-sale service
conditions under which contracts may be terminated

No unjustified payment costs or additional charges may be applied. Traders must not charge consumers fees that are more than the cost to the trader of the type of payment involved.

When phoning a trader to enquire or complain about a contract, the consumer must not pay more than the basic telephone rate.

Traders must have a consumer’s express consent when offering additional paid-for services. Pre-ticked boxes on an order form may not be used for such payments

If unsolicited goods are supplied, then the consumer\’s failure to comply does not constitute consent.

The use by suppliers of automated call devices requires prior consent of the consumer. Other distance communication may be objected to.

There must be provision for appeal before the courts or administrative bodies in the events of dispute. Member states may adopt more stringent provisions.

Display Prices

The selling prices and unit price must be unambiguously and easily identifiable and clearly legible for all products offered by businesses to the consumer. This must include the final price including VAT and all other taxes. The unit price need not be indicated if it is the same as the selling price.

States may decide not to apply the rules if products are supplied in the course of the provision of a service or if sales take place by auction.

In the case of products sold and bought, the unit price only is sufficient. An advertisement mentioning the selling price must also indicate the unit price. States may waive the obligation to indicate the unit price where it would not be useful or liable to cause confusion. In the case of non-food products, the state may determine the products to which the obligation to indicate the unit price will apply.

States must inform persons regarding the legislation. They must lay down and provide systems of penalties for infringement of the provision.

Distance Finance Contracts

There is a separate directive dealing with distance contracts providing financial services. This covers banking, insurance, payments and investment services. It applies when they are negotiated at a distance whether over the Internet, fax, telephone et cetera, where the parties are not simultaneously physically present.

The consumer has a right to withdraw within 14 days in the following cases

when the contract has been signed before the consumer has received prior notice of the terms and conditions
when the consumer has received the contractual terms and conditions but has been fairly induced to conclude the contract during the reflection period.

The period is 30 days in the case of life insurance and personal pension products

If the consumer exercises the right to withdraw having already agreed to the partial performance of the service, he may have to pay for the service rendered. If the service has been rendered in its entirety prior to the withdrawal, the right can no longer be exercised. Consumers must be informed in advance of the price to be paid and the basis upon which it is calculated. The right does not apply to products or services whose rates fluctuate in the market.

In the event of fraudulent use of a credit card, the consumer may request cancellation of the payment and reimbursement of the amount paid. There must be effective complaints procedures and provision for redress.

Timeshare and long-term holiday products

EU directive harmonises certain aspects of the market sales and resale of timeshare and long-term holiday products. here are minimum EU-wide standards for sale of property on a timeshare basis. The directive covers information in relation to the contract and procedures for cancelling. Other aspects are left to the member states.

Before the conclusion of a contract, consumers are entitled to information concerning the product they are about to purchase, rights they can exercise and all associated costs. They must be informed of whether they have a right to withdraw, its duration and conditions attaching to it.

The information is to be provided free of charge in a durable medium. It must be in a standard form and contain the information provided for in the directive. The minimum items specified must be included. There are provisions as to the language which applies.It must be clear comprehensible and accurate. Consumers may choose the language in which it is applied and require that u be that of their country of residence or nationality.

States must ensure that consumers are given notice of the obligation concerning pre-contact information when advertising material is received or in the context of participation in a commercial event.

The contract must be in writing on paper or another durable medium. It must comply with the requirements of the directive. At least one copy must be given at the time of the contract. The above provisions regarding the language apply.

There is a right of withdrawal by the consumer which may be exercised without any reason within 14 days. The right to withdraw must be described in the pre-contract information. If the obligation is not complied with, the withdrawal period is extended to a year and 14 days. If the pre-contractual information is not provided, it may be exercised for 3 months and 14 days.

Payments due for long-term holiday contracts are to be made in instalments which must be divided into yearly amounts of equal value. From the second instalment onwards, the consumer may terminate the contract without incurring a penalty by acting within 14 days of receiving the request for payment.

Agreements in relation to credit granted by the seller or a third-party may be cancelled if the right to withdraw is exercised. Clauses which are contrary to the rights of the purchaser or responsibilities of the seller are not binding.

Package Holidays

There are harmonised requirements for package holidays and package tours. A package involves a service provider for a period of more than 24 hours sold at an inclusive price. Any brochure made available must clearly indicate

the price
destination, itinerary, means of transport
type of accommodation
passport and Visa requirements
health formalities
timetable for payment
deadline for informing a consumer in event of cancellation

The information contained in the brochure binds the organiser. Before the contract is concluded, the organiser must provide in writing certain information on passports, visas, and health formalities.

Prior to the commencement of the journey, the organiser must supply in writing details of the

times and places of intermediate stops and transport connections
details of the organiser\’s local representatives or emergency telephone number
certain additional information in relation to minors
information on optional contracts regarding insurance or assistance

If the organiser varies what is provided significantly (even where he has the right to do so) the consumer may withdraw without penalty or accept an amendment. If the consumer withdraws or the organiser cancels the package, the consumer is entitled to an alternative package or to be reimbursed the sums paid.