Many e-commerce sites use payment buttons such as "pay now", "confirm order," or "checkout" as a way of the customer confirming they wish to place their order. As customers have become accustomed to this practice, the essential nature of such buttons in digitally forming the contract between the customer and the trader should not be underestimated.
The wording that should be used on such buttons has been scrutinised by an EU case (Fuhrmann-2-GmbH v B 2022). The case involved the popular travel website booking.com, which used the wording "complete booking" on its payment confirmation button.
However, under EU consumer law, a consumer is not bound by a contract if a button used for online orders is not labelled in an easily legible manner. Either the words "order with obligation to pay" or with other unambiguous wording making clear that placing the order results in an obligation on the customer to pay must be used.
The European Court of Justice (the ECJ) determined that only the wording "complete booking" could be considered and not any other information provided to the customer during the order process.
As such, the ECJ considered whether, in everyday language and in the mind of the average, well-informed, reasonably observant and circumspect consumer, "complete booking" could reasonably be understood as creating an obligation on the part of the customer to pay.
As EU consumer law is designed to provide a high level of protection for consumers, this would not be the case if consumers were required to analyse all other circumstances and information provided during the order process to determine whether they were under an obligation to pay because a payment button is unclear.
The ECJ decided that as "booking" is a synonym for reserving or making a pre-order free of charge, it would not have the same effect as the wording "order with obligation to pay".
Although this case is post-Brexit, there is no binding obligation on UK courts to follow its ruling. UK courts may still consider it when deciding similar cases and determining the approach to be taken to protect UK consumers.
If your site sells goods or services to consumers within the EU, you should be mindful of this decision and take steps to ensure your order confirmation button includes wording that makes it crystal clear that the consumer is agreeing to an obligation when placing their order.
If you sell goods or services to consumers, you should consider:
How goods and services are sold has an impact on what consumer laws and regulations the trader is required to comply with. You should consider whether you sell goods and services online only (e-commerce), via the phone or postal orders (distance selling) or through a traditional "bricks and mortar" shop (on-premise) as each requires slightly different terms.
For e-commerce traders, providing the requisite information during the online order process and making payment buttons sufficiently clear is essential.
The type of goods and services sold also impacts what consumer laws and regulations you are required to comply with, including cancellation rights and refunds. If you sell regulated goods, services and digital content, such as alcohol, there are additional regulatory matters that you must comply with.
Where you offer your goods for sale has an impact on your contract terms as each jurisdiction has its own laws and regulations which may govern the sale of your goods or services. If you operate solely within the UK and your customers are located in the UK only, they comply with the relevant UK law (England and Wales, Scotland or Northern Ireland). If you are selling goods and services within foreign jurisdictions, they must comply with the target country's jurisdiction. It is essential, therefore, that you obtain local law advice before doing so.
Our specialist team of Technology Solicitors will continue to monitor guidance and any updates from both UK and abroad. Should you wish to discuss the contents of this update and the potential impact this may have upon your business; please do not hesitate to contact Technology Solicitors below.
