The guidance is targeted at consumers, businesses, the authorities of EU Member States (including national courts and enforcement agencies) and legal practitioners. The key points raised by the guidance are as follows:
- business-to-consumer arrangements should be heavily scrutinised and aligned at a national and European level – as a business therefore you should be ensuring that you contract with consumers in such a way as to minimise potential consumer harm;
- the requirements to provide clear and transparent information to consumers on contract terms and their implications/consequences before the conclusion of the contract may require that processes and systems (particularly for e-commerce) are updated to ensure that mandatory information is presented to consumers in the right way and at the right time; and
- unfair contract terms should be treated as if they had never existed (i.e. so that it cannot have any effect on a consumer).
To inform the guidance, the EC has also issued shorter-form guidance for businesses setting out how they can better present contractual information to consumers to ensure that they meet requirements of transparency. The recommendations primarily apply to an online context and include an appendix setting out a clear 'consumer journey' which makes clear suggestions as to how businesses should:
- ensure that certain information is made permanently available to consumers throughout the ordering proces;
- provide key information in relation to the trader's offer (i.e. the product details / description, price, delivery times and restrictions);
- provide detailed product information / specifications as well as any contractual duration and cancellation rights;
- ensure that key information is provided to consumers at the point of purchase (i.e. checkout) regarding:
- the main characteristics of the goods or services;
- the identity of the trader;
- the total price;
- the right of withdrawal;
- the duration of the contract; and
- if the contract is of indeterminate duration, the conditions for terminating the contract.
This should be presented in a way that the consumer can actually see and read before placing the order without being obliged to navigate away from the order page (i.e. not hyperlinked).
Standard Terms and Conditions
In addition, the short-form guidance makes the following recommendations with regards to the use of standard T&Cs with consumers:
- T&Cs should be presented in plain and intelligible language allowing the consumer to acquire actual knowledge of all the contract terms. This requires that:
- terms and conditions are concise and simple such that information is grammatically clear; and
- an average consumer is able to foresee the economic consequences resulting from the conclusion of the contract;
- T&Cs should be made available to the consumer before concluding the contract by an easily understandable link giving the consumer the possibility to read, to store and to print the T&Cs;
- traders should ensure that the link/reference to terms and conditions is clear; and
- best practice requires that traders use a table of contents with hyperlinks to the major sections of the terms.
As such, businesses should be sure that their standard B2C terms and conditions are consistent with the above approaches to ensure that they are enforceable against consumers or else provide the relevant protections which the trader is seeking to include.
Overall, the guidance provides a useful update on the ways that the UCTD has been considered by European courts and should give more direction to enforcement agencies such as the Competition and Markets Authority ("CMA") regarding national enforcement activities. This is a timely publication from the European Commission given that the CMA has been recently encouraged by BEIS, in its Strategic Steer to the CMA, to show greater ambition in the volume and nature of its enforcement activities to ensure greater protection for consumers and to become a stronger and independent voice in supporting consumer rights and guiding policy.
To view the original guidance, click here