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It is normally easy to identify when a contract is concluded at a distance (typically online and by phone) but the circumstances in which a contract is made on or off-premises are not always clear. It is important to make this distinction because whether a sale to a consumer is made on or off-premises will dictate, amongst other things, whether the consumer has a right to cancel the contract.
Traders who conclude contracts on-premises will not have to give a consumer the right to cancel. In contrast, for off-premises contracts, traders must inform the consumer of their rights to cancel on 14 days’ notice, without cause. Failure to comply will trigger an extended cancellation period of 12 months unless the trader subsequently notifies the consumer of the right to cancel, in which case it runs for 14 days from the date of notification. In addition, the trader may face criminal conviction or a fine.
So how do you determine whether a contract is concluded on or off-premises? Typically, distinction often turns to whether a contract is formed in a place that is the “business premises” of the trader. The consumer regulations do not clearly define business premises, so while it may seem easy to determine and reasonable to assume that these will include, for example, trade fairs, if traders sell from other locations, it is open to determination whether a trade fair qualifies as a business premises.
In the recent case, Verbraucherzentrale Berlin eV v Unimatic Vertriebs GmbH, a consumer ordered a product from a trader at a trade fair. The trader failed to advise the consumer of their right of withdrawal and the consumer argued that the contract was an off-premises contract and that the trader should have informed the consumer of their right of withdrawal. The national courts referred the matter to the ECJ and the ECJ was asked to consider whether a stand run by a trader at a trade fair, at which the trader carries out their activity for a few days each year, constitutes “business premises”.
The ECJ ruled that the test for assessing whether a stand at a trade fair constitutes "business premises" involves consideration of whether the stand would appear to the average consumer to be a place where the trader occupying it carries out their activities, with the result that the consumer may reasonably expect, by visiting the stand, to be solicited by the trader to conclude a contract.
Despite the new test laid down by the ECJ, the more prudent traders who use trade fairs in addition to their normal place of business, may wish to treat any sale made at a trade fair as an off-premises contract. This means (amongst other things) notifying consumers that they have the right to cancel and given the significance of the consequences for failing to comply, ensure that all required information is prominently included in any description of the products as well as in the terms and conditions.
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