CELEX: 51992PC0011
Language: en
Date: 1992-05-20
Title: Proposal for a COUNCIL DIRECTIVE on the protection of consumers in respect of contracts negotiated at a distance (distance selling)

COR/MISSION OF THE EUROPEAN COMMUNITIES
                                     C0M(92) 11 final - SYN 411
                                      Brussels, 20 May 1992
                        Proposal for a
                      COUNCIL DIRECTIVE
   on the protection of consumers in respect of contracts
         negotiated at a distance (distance selling)
                (presented by the Commission)
 ---pagebreak---                                   _ 1_
                         EXPLANATORY MEMORANDUM
I  GENERAL SITUATION
a) Community policy background
   The Community decided in 1972 to institute a specific policy for
   consumer protection.
   The section relating to protection of consumers' economic interests
   in the preliminary Community programme in this field (Council
   Resolution of 14 April 1975) already mentioned that the consumer
   had to be protected "against demands for payment for unsolicited
   goods and against high-pressure selling methods".
   The    second   programme   (Council   Resolution  of   19 May 1981)
   incorporated the same wording, adding that a study should also be
   made of the economic implications for the consumer of "the use of
   new data-processing and telecommunications technology".
   Ttie third programme, referred to as "A New Impetus for Consumer
   Protection Policy" (Council Resolution of 23 June 1986) stated in
   section 29 that: "If the common market is to be fully effective, it
   must be made easier for consumers to buy goods in other countries"
   and indicated that the Commission would submit proposals for the
   new systems (videotex, television, telephone) which enable
   consumers to place orders with their suppliers from their homes.
   The fourth Community programme, known as the "Three-year      action
   plan 1990-1992" (C0M(90)98 of 3 May 1990) states that:
        "To achieve full benefit from the internal market, it is
        necessary that its citizens be prepared to use that market by
        purchasing goods and services available anywhere in it.
        "Cross-frontier selling by electronic means using television
        and new communications technology, in addition to existing
        mail-order business, will stimulate demand for cross-frontier
        purchasing."
 ---pagebreak---                                       2 -
      In the section describing the action       to be taken,   this  fourth
      programme therefore includes the
      "Proposal of a directive on distance selling       (1990)".
      The present text     is such a proposal.
      This problem has since been discussed          in another Community
      text, the communication (C0M(91)41 final) "Towards a single
      market in distribution". Section 3.2 is headed: "Providing a
      new set of rules for new forms of distribution                 without
      frontiers".
      It is stated that:
           "An area of obvious potential importance is the small but
           growing multinational market in distance selling based on
           new techniques of multilingual publishing, broadcasting and
           advert is ing".
b) The economic phenomenon
      New technologies
      Selling at a distance increasingly involves the use of new
      technologies for soliciting custom or for obtaining the consent
      of the consumer.
      The forms of media used      in soliciting custom are as follows :
      Wr i tten med ia
      Unaddressed printed matter
      Addressed printed matter
      Standard letter
      Press advert is ing
      Fax
      Auditory media
      Telephone with human intervention
      Telephone     without     human   intervention   (automatic    calling
      mach ine)
      Radio
      Visual media
      Teletext
      Home computer
      Minitel, Bi Idschirmtext
 ---pagebreak---                                 3 -
    Audiovisual media
    Telev is ion
    Video cassette or video record reader
    Picture phone (videophone)
    Some of these methods, which are interactive, may be used to
    record orders. The most recent innovation is the telephone
    without a human caller: this is a speech computer which records
    the consumer's enquiry.
    Table No 1 in Annex 1 shows the            prevalence of certain
    technologies. Over 95% of households       in the Community own a
    television set.
    A marketing     technique  may   involve    the  use   of   several
    technologies. Thus in television selling, the order is placed
    by computer, telephone or mail but cannot (as yet) be conveyed
    via the medium used to disseminate the offer. Similarly, a
    solicitation may make use of several media: a catalogue is
    often followed by a mail shot and sometimes a telephone call.
    Consumers' use of the various methods of ordering       is changing
    very quickly.
    The representative of the French          trade  association,   for
    example, estimates that by 1995 only 25% of orders in           his
    country will be placed by mail.
    La Redoute, the leading French distance seller, received         21
    million orders     in 1990. 27% were made by post; 45%           by
    telephone and 14% by Minitel.
    The attached table also shows      that    there  are  considerable
    differences between countries.
Percentage turnover by method of ordering    in major distance-selling
firms
      1990       Belgium      France      Spa in          Japan
  Mai I            89          61 .8        75             39.4
  Telephone         8.7        22.3         13             56.7
  Minitel                       9.5
  Others            2.3         6.4         12              3.9
 ---pagebreak---                                            - 4 -
          Attention should also be drawn to the increasing importance of
          credit in distance selling. The attached table shows that in
           France more than 25% of sales involve credit.               In Belgium, the
           figure is also 25%.
    Percentage turnover           on distance     selling    in France   from cash  and
    credit sales
                       1980      1982     1984        1986     1988    1990
       Cash           82.8       82.8     79.5        78.9     75.1    73.9
       sales
       Credit          17.2      17.2     20.5        21 .1    24.9    26.1
       sa les
                               (Source SVPCD October 1991)
           Structure of the market :
           The attached table shows the level of sales by mail-order
           in certain Member States. These figures are provided by
           the European Mail-Order Traders Association.
           The firms belonging to these associations do not represent
           the       entire      market.    In      Belgium,     for    example,    the
           Association        des   Entreprises      de Vente      a Distance    (AEVD)
           estimates that it represents 75% of the market.
  Country               Turnover 1 9 9 0     Share of         Share of non-
                         (mill. E C U )    trade 1990         food trade
  Germany                 14   278            4.2 (1)             4.3
  France                    5  921             2.5                5.1
  Great B r i t a i n       5  204             2.8                4.6
  Italy                     1  026            0.5                 1 .4
  Sweden                    1  024             2.8                4.8
  Swi tzerland              1  021             2.6                5.0
  Austr ia                     962             3.9                  -
  Nether lands                 823             1 .6               2.7
  Be Ig i urn                  580             1 .1               1.8
  Denmark                      532             2.8 (1)            4.8
  F inland                     460             1.5                2.5
  Spain                        393            0.005                 -
(1) 1989                               Source: EMOTA
           This table shows that 80% of distance selling of products takes
           place in only three of the Community countries. For these
           three countries, this type of sale represents between 4 and 5%
           of all non-food trade.
 ---pagebreak---                                     - 5 -
         The   largest distance selling companies        in the world are
         European. As can be seen from the attached table, European and
         American firms Jostle for position in this market.
Ranking of the 13 largest mail-order firms in the world in 1990
            Firm            Country   Turnover in     Sector of activity
                                        m 1 I ion
                                            $
  Otto Versand **            FRG        7 415       General m e r c h a n d i s e
  Que I Ie                   FRG        6 350       General m e r c h a n d i s e
  Great Universal stores     GB         4 685       General m e r c h a n d i s e
                  (GUS)
  Sears, Roebuck & Co        USA        4 300       General m e r c h a n d i s e
  United Automobile
  Association Services       USA        4  291       Insurance
   J.C. Penney               USA        3  315      Genera I m e r c h a n d i s e
  Time Warner                USA        2  784      Pub Iish ing
  Tele-Communicat ions       USA        2  602      Cable
  Reader's Digest            USA         1 757      Pub Iish ing
  La Redoute*                France     1  642      General m e r c h a n d i s e
  Bertelsmann*               FRG         1 600      Pub Iish ing
   GEICO                     USA        1  572       Insurance
   Neckermann                FRG         1 484      Genera I merchand ise
*    Turnover 1989
**   Spiegel turnover included (American subsidiary)
                   Source: Marketing Logistics INC. 1990
         The distance selling firms have already largely taken on a
         European character. An analysis of the subsidiaries (Table No
          2 in Annex 1) of the Otto-Versand and La Redoute groups clearly
          reveals strategies of establishment        throughout      the entire
         Community. Even     some   of   the   smaller    firms     succeed        in
         establishing a presence in virtually all the Member States
          (Yves Rocher-Damart).
          In the long term, strategies of establishment by means of
         subsidiaries    may    give    rise    to    problems       of        market
          compartmentalisation. A recent study carried out for the
          Consumer Policy Service showed that some firms were extremely
          reluctant to send their catalogues to consumers across national
          frontiers. It is essential to the functioning of the internal
         market that the consumer should be able to order from a firm
         outside his country even if that firm has a subsidiary in the
          country where the consumer is resident. However, only very
          large firms can pursue a policy of establishing subsidiaries in
          all the Member States.
 ---pagebreak---                                      - 6 -
c)   Necessity for Community   legislative action
-    Position of the consumer    in this type of transaction :
     Marketing at a distance is typically a three-stage operation:
         the consumer receives an offer of a product or service: a
         written, visual or oral description, an indication of the price
         and terms etc.;
         on this basis, he places an order;
         subsequently, he receives the product or service.
         The offer has been conveyed to the consumer by a means of
         communication at a distance. The consumer has also used such a
         means of communication to make contact with the trader.
         As a result of this two-fold use of remote communication, the
         consumer    and trader are not physically        in each others'
         presence.
         The different types of sale may be summarised     in the following
          table:
                       Simultaneous presence    No simultaneous presence
                       of consumer/trader       of consumer/trader
   Commercial          Conventional selling     Automated commercial
   premises                                     premises
   Consumer's home     Door-to-door selling     Distance selling
          Some analysts have tried to break down distance selling into
          several sub-categories: mail-order selling based on an offer
          issued using a written medium, telephone selling in which all
          phases of the selling process are carried out by telephone,
          selling by television etc. Others have taken the view that the
          use of certain methods such as the telephone or television
          brings these forms of sale closer to doorstep selling than to
          ma iI-order selIing.
 ---pagebreak---                               - 7 -
    Detailed study of the problems encountered by consumers shows
     that the difficulties arising from door-to-door selling are
     quite different   from those    involved  in distance   selling.
     Selling by television, for example, cannot be compared with
     doorstep selling, since the consumer can always switch off his
     set.
While mail remained the principal method of ordering, the order
took several days to be conveyed. A mail-order purchase is one
which is contemplated for some time beforehand, and by the time
delivery is made by the postman, several weeks will have elapsed.
Having regard to these delays, the time spent filling out the order
form assumes little importance.
Today, purchasing at a distance is much more in the nature of an
impulsive purchase, and the customers' demand for speed is much
greater.
The act of purchasing is clearly instigated by the product itself
and its presentation in the catalogue. However, the method of
making an order must not be seen as impeding the process.
Legislative pressure in the Member States
 It is evident from an analysis of the legal provisions of the
Member States with regard to contracts negotiated at a distance
that there has been strong pressure since 1987 to take legislative
action. 1987 was also the year that television shopping arrived in
Europe.
 It may be observed that the notion of "distance selling" appears
for the first time in the Member States' texts in 1987. While this
notion    had  never  previously   been   used   in   any legislative
 instrument, it then appeared simultaneously        in a Danish text
(Chapter 4 of the Law of 23.12.1987) and in a French text (Decree
of 3.12.1987).    In the same year, Portugal adopted a general law
dealing with "mail-order selling", which in fact covers all forms
of distance selIing.
 ---pagebreak---                                 - 8 -
Be IgIurn
In August      1991, Belgium adopted a      law concerning     "distance
selling". Its definition is very close to that used by the present
proposal. It covers goods and services as well as all the means of
communication at a distance. The public authorities can, by way of
royal decree, take many forms of action for the purpose of its
applicat ion.
Denmark
Denmark introduced legislation concerning "distance selling" in
1987.     In particular, this text provided for a cooling-off period
of seven days. It also prohibited telephoning the consumer without
his prior consent. A law enacted in June 1990 provided for the
display of prices in distance selling.
Germany
 In Germany, only the use of Bi Idschirmtext   is covered by a specific
 law.
On the other hand, there have been major court rul ings on telephone
marketing,       which     is    prohibited.   (Decisions     of     the
Bundesgerichtshof      of    1970-1989-1990). The     distribution    of
unaddressed advertising through letterboxes is prohibited by the
case law (BGH Judgment of 10.12.1988), if the consumer has made his
object ion known.
Greece
Greece regulated mail-order selling by a ministerial            decision
adopted in July 1990. This text was amended in September 1991.
Spa in
No national legislation exists in Spain concerning this area, but
several regions have legislated in the area of distance selling
 (Aragon/1989 - Galicia/1988 - Valencia/1986). There are proposals
 in other regions (Catalonia).
France
There is no general text on distance selling in French law, but
 regulatory provisions are to be found in several laws, decrees and
orders. Thus all types of distance selling are regulated in
different ways. (Law No 88/21 of 7.1.1988. Law No 89/421 of
 23.6.1989, Law No 87/1008 of 31.12.1989). There is also a law
 dealing specifically with television shopping.
 ---pagebreak---                              - 9 -
Ireland
No specific provision exists in Ireland for distance selling. The
only relevant provision is the prohibition of inertia selling (Sale
of Goods Act 1980).
Italy
The Law of 29.12.1990 implements the Community directive in the
matter of door to door selling but extends its field of application
to mail-order selling and particularly to sales by television.
 Italy is in fact the country where this form of selling is most
practised. The implementing decree is still under discussion.
Luxembourg
Selling by correspondence Is regulated by the Law of      25.8.1983,
which provides for a cooling-off period of 15 days after  receipt of
the goods. Telephone marketing is prohibited by the law   on door to
door selling. A Grand-Ducal regulation on videotex was    adopted in
February 1991.
The Nether lands
No specific law on distance selling exists in the Netherlands. The
New Civil Code comes into force in January 1992. Inter alia, it
makes it illegal to demand more than 50 % of the purchase price of
a product in advance.
Portugal
Portugal was the first Member State to legislate in general terms
 for all forms of distance selling : by Decree-Law No 272/87 of
3.7.1987. This text is very close to the Belgian text. It also
provides that the consumer cannot be required to make any payment
 in advance.
United Kingdom
No    legislative provision exists except     for   inertia  selling
 (Unsolicited Goods and Services Acts 1971-1975). All distance
 selling is regulated by codes of conduct adopted under the
 authority of the Office of Fair Trading. There are also several
other voluntary provisions relating to the protection of deposits
 (Mail Order Protection Scheme).
 ---pagebreak---                                  - 10 -
I I AIMS
   Marketing at a distance will be one of the areas in which the
    operation of the completed internal market will be most obvious and
    tangible to consumers.
    Free movement of products is virtually complete and the consumer
    buys the products he finds on traders' shelves. The consumer
    benefits from free movement of products but is not actively engaged
    in the process.
    Free movement of services is developing much more slowly. The
    general introduction of mutual recognition is a prerequisite for
    cross-frontier activity.
    Distance selling restores the       initiative   in cross-frontier
    purchasing to the consumer. It is the consumer who, on the basis
    of a cross-frontier proposal, takes the initiative and approaches a
    firm located in a country other than his own.
    Opening of the frontiers in this field means for example the
    opportunity for a French consumer to purchase from a German
    catalogue via Minitel, for a Spanish consumer to purchase by mail-
    order on the basis of an advertisement in the Portuguese press or
    for a Luxembourg consumer to make a purchase by telephone from a
    British teleshopping programme.
     in certain trade circles, it is asserted that, of all the
    distribution systems, distance selling is that which can benefit
    most from open frontiers. The major firms active in this sector
    have long since understood what is at stake and their development
    strategy is entirely geared to all the countries in the Community.
    The major innovation in this market is the widespread use of new
    technologies both to offer products or services and to obtain the
    consumer's order. Among the means used to disseminate the offer
    are the telephone (telephone canvassing), radio, television and
    home computers (Minitel, BiIdschirmtext).
    All the interactive technologies are used to obtain the consumer's
    agreement: telephone, teletext, computers, audiotext.
 ---pagebreak---                                   - 11 -
    An analysis of the use of these new technologies shows that there
     is a specific form of commercial selling, distance selling, which
     is descended from the traditional mail-order trade. Those engaged
     in this sector have been very much aware of this development and
     several of the national trade associations have changed theij; names
     in recent years to include the idea of "distance".
     There are two basic trends:
         distance selling is being used for products or services which
         were formerly not sold in this way (foodstuffs, services);
         more and more firms are marketing their products or services
         directly by these new methods.
Many Member States have reacted to this technological explosion and the
relative insecurity to which it gives rise in legal terms, by enacting
rules. A State-by-State analysis of the situation clearly shows that
there were scarcely any legislative provisions for this field until
1987 but that the number of texts has increased sharply since.      It is
the Commission's     Job to avoid such fragmentation. The Directive
therefore proposes a general framework for contracts negotiated at a
distance, to be supplemented by self-regulatory measures as proposed by
the Recommendation.
The first aim is to provide legal safeguards for the consumer. Today,
the consumer may place an order by telephone and be answered by a
"voice-response computer". The consumer is hardly aware that he is not
communicating with a human being but with a machine. What kind of
contract has Just been concluded? With whom has the consumer made a
contract? What information does the consumer receive7 What proofs are
there in the event of litigation? What law applies to the contract?
What replaces the signature? These legal safeguards will also allow
firms to develop their activities throughout the community within an
homogeneous framework.
The second aim    is to safeguard the consumer's right of choice. The
right of choice    first of all means that it must be possible not to
receive certain    types of solicitation of custom such as automatic
telephone calls   or faxes. There are various ways of establishing the
consumer's right   to freedom from intrusion and respect for his privacy.
The right of choice also encompasses the quality of the information the
consumer receives before the transaction and while it is being carried
out. The basic principle is that the use of new technologies must not
 lead to a reduction in the information provided.
 ---pagebreak---                                  - 12 -
Since the famous mail-order catalogue "Bon-Marche" was first published
in 1865, certain traders have allowed the consumer the right to cancel
the contract when he receives the goods. The comparative study shows
that this practice is more or less generally followed throughout the
Community, on a mandatory basis in seven Member States and on a
voluntary basis in the other five (see Table No 3 of Annex 1 ) .
A further aspect of the right of choice is the prohibition of inertia
selling and the principle that failure of a consumer to reply to a
solicitation does not constitute agreement.
The third aim is to ensure repayment to the consumer in the case if
non-performance of the contract. Consumers who pay in advance for a
product or service must be sure that they will recover their money if
the product is not delivered or the service not rendered. The American
distance selling market currently suffers from widespread fraudulent
practice of this type, to such a degree that consumers in the United
States have set up a league to combat fraud in telephone selling. On
the European market, too, there is malpractice by a number of firms
which take advantage of the fact that different regulations apply in
different Member States. The risk is particularly important when the
firm is difficult to identify and locate.These practices harm the
consumer, but also the trade as a whole. The directive therefore
 includes a provision relating to certain types of payment by card. The
Recommendation urges the trade to seek ways of guaranteeing consumers'
deposits if advance payment is required.
 ---pagebreak---                                    - 13 -
III REACTIONS
    The proposal which is presented is the result of several months of
    discussion.    It has largely taken account of remarks and criticisms
    made in response to previous versions. Therefore all the opinions
    received are based on these older projects.
    In April 1991, a discussion document was drawn up under the title
    "Discussion paper for a directive on distance selling". This text
    was disseminated by two channels:
         to the trade, via the Committee on Commerce and Distribution, a
         consultative body which advises DG XXIII;
         to consumers, via the Consumers' Consultative Council, which
         advises the Consumer Policy Service.
     In the light of all the comments      received,    a preliminary   draft
    proposal was drawn up in July 1991.
    The Committee on Commerce and Distribution and           the  Consumers'
    Consultative Council were once again consulted.
     In its opinion of 13 September 1991 relating to the discussion
    document distributed in April 1991, the Committee of Commerce and
    Distribution argued that the text should be either a recommendation
    or a
     "(limited)   framework   directive,   leaving    sufficient   room   for
    manoeuvre for traders and their professional associations to work
    out self-regulatory provisions".
     In it's final opinion of 16th January 1992 concerning the proposal
    of July 1991, the CCD stated clearly that                "after careful
    consideration and discussion of the reasoning behind the draft
    proposal, the CCD is not convinced about the need for such an all
    embracing directive . .. and rejects the Commission's arguments"
    and maintains it's opinion of 13th September 1991.
    With regard to the Articles, several of which were criticised by
     the Committee, particularly the provisions concerning the guarantee
     fund, the national observers, the legal and administrative means of
     recourse, and the inclusion within the scope of the application of
     the directive of services such as the reservation of hotel rooms,
     restaurant tables and other equivalent services.
     In it's opinion dated the 16th January 1992, the CCD stated that it
    was in favour of a European code of good practice.
     Numerous associations and professional organisations have made
     their opinions known. Among others, CECD/FEWITA/GEDIS representing
     the European trade note that a recommendation in the matter of
     distance   selling   is sufficient    and   that    a directive    seems
     premature. Moreover, the European Association of Mail              order
     considered that the proposed Directive should be abandoned and that
     recommendation supplemented by self-regulatory rules would be
     sufficient.
 ---pagebreak---                                   - 14 -
 On the other hand, the European Direct Selling Federation hoped for a
maximum amount of harmonisation and welcomed the fact "that the
Commission had drafted a text designed to protect consumers in respect
of contracts negotiated at a distance".
    The Eurochambres and the Comite des Associations Europeennes du
    Commerce de Detail also stated that they were against the draft
    directive and that they supported CCD's opinion. Several distance
    selling firms also conveyed their commentaries on the draft
    directive, criticising several provisions of the draft.
    The   British   "Mail   Order   Protection   Scheme",  which   is   an
    organisation set up by the advertising profession in Britain for
    the purpose of safeguarding advance payments, "totally       supports
    the principle of this Directive".
     In a very detailed opinion (19 pages) unanimously adopted at its
    plenary meeting on October       1991, the Consumers' Consultative
    Council gave full support to the initiative, even though it thought
     it inadequate in certain respects (lotteries and other promotional
    techniques were not covered). The opinion particularly emphasised
    the practical problems encountered by consumers in the conclusion
    and execution of contracts negotiated at a distance and stressed
     the existence of cross-frontier fraud.
     It welcomed the broad approach of the proposal, which it described
    as "the only answer for a sector which is constantly changing". It
    supported the principle of rules applicable to all contracts
    negotiated at a distance, together with some specific            rules
    applicable to certain types of contract. Finally, the opinion
    states that
         "Experience has shown repeatedly that the adoption of non-
         compelling measures, such as recommendations, does not afford
         consumers any guarantee of compliance with         the consumer
         protection   principles   they    contain. Any   self-regulatory
         initiative can only take place in the context of pre-existing
         regulations and it is precisely this regulatory framework that
         should be provided by the Directive".
    The opinion of the CCC is nevertheless critical of the guarantee
     fund. The prohibition or restriction of payments          in advance
     appears to it to be a formula which          is more protective of
     consumers.
     The experts from the Member States consulted at the end of August
     all favoured the idea of a Commission initiative in this field, but
     substantial differences of view emerged, since some States thought
     the Commission's text did not afford sufficient protection to
     consumers, while others thought virtually everything could be
     regulated by codes of good practice.
 ---pagebreak---                                  - 15 -
IV COMMENTARY ARTICLE BY ARTICLE (Directive and Recommendation)
   The   aims of    these   instruments   (legal    safeguards,   financial
   safeguards and right of choice) were discussed in section II.
   A general definition of the concept of a "contract negotiated at a
   distance" is given in the section on the position of the consumer
   in this type of transaction (Ic).     In view of the range of problems
   arising, it would have been possible to envisage enacting a
   specific instrument for each means of communication (one instrument
   for television sales, one for Minitel-type home computers etc.) or
    Instruments for the various types of product or service.
   On further consideration, this was seen to be a fragmented
   approach: it is much simpler to lay down general rules for all
   forms of distance selling, even if adjustments are required for
   certain specific cases.
   The Directive is therefore structured as follows:
        Object and definitions (3 articles)
        Rules governing solicitation (4 articles)
        These are general rules applying to all types of       solicitation
        of custom irrespective of the means of communication used.
        Rules governing contracts (4 articles)
        Litigation and contract  law (3 articles)
        Final provisions (2 articles)
        Standard clauses common to all directives
   Since this text is directly linked with the operation of the
   completed    internal  market   (the    internal   market   in distance
   selling), the legal basis chosen is Article 100a.
   This section of the memorandum      is a simple    presentation of  each
   article in turn.
 ---pagebreak---                                     - 16 -
Article 1; Oblect
This article briefly indicates the scope of the instrument. The
various terms used are defined in Article 2. Preparatory acts are all
the commercial techniques used to convey the solicitation of custom to
the consumer. This does not include games and lotteries, although they
are frequently used in distance selling, since they are not specific to
this form of sale and will probably be regulated separately.
Nonetheless, the Recommendation encourages the trade to develop its own
rules in this field.
Article 2: Definitions
-   A contract negotiated at a distance has three distinctive features,
    the third being a logical consequence of the first two:
         solicitation  of   custom   by  a means of    communication  at  a
         distance;
         a response by the consumer using a means of communication at a
         distance;
         the fact that the trader and the consumer are not physically in
         each other's presence.
     If a consumer receives a catalogue but goes to the supplier's
    premises in order to form a contract, the contract is not concluded
     "at a distance".
    When the consumer signs a long-term contract which is performed in
    stages, such as subscription to a book club, only the initial
    contract is covered and not the operations involved in performing
     it.
    The definitions of the "consumer" and "supplier" are the same as in
     the directive on contracts negotiated away from business premises
     (door-to-door selling). These definitions have been validated by
    various Judgements of the Court of Justice, the most recent being
     the Judgement in the Di Pinto case on 14 March 1991.
-    A list of the means    of communication at a distance which may be
    used is attached as      Annex 1, since a reader who has only the
    document published in    the Official Journal must be able to find out
     quickly what is to be   understood by a means of communication.
     "Classified advertising" is not included in this list since as a
     general rule it concerns only relations between consumers.
    The concept of        an    "operator" covers    television   channels,
     newspapers, postal or telephone services.
 ---pagebreak---                                  - 17 -
    The "solicitation" is made by the supplier. This term has been
    chosen because of the differences in the meaning of the term
     "offer" (invitation to treat) in national law.
    The solicitation is one element of an organised selling process.
    With the information provided by the trader, the consumer must be
     able to order the product or the service at a distance. For
    example, a communication designed to set up a meeting or direct a
     consumer to a shop is not a solicitation within the meaning of this
     text. For a contract negotiated at a distance to arise, the
     response from the consumer       (the order) must constitute a
     contractual arrangement. The range of advertising techniques used
     by small and medium sized enterprises to make themselves known to
     their consumers are not therefore solicitations within the meaning
    of this text.
Article 3: Exemptions
As explained in the economic analysis section, the concept of "distance
selling" covers sales away from business premises. It is therefore
necessary to exclude automatic vending machines located in business
premises. The most common example is that of ticket machines in
stations or airports. All vending machines which immediately dispense
the product to consumers also give rise to a different set of problems.
It has been considered necessary to exclude certain products or
services from the scope of this Directive although they may be marketed
by distance selling. As a general rule, orders for made-to-measure
products represent a considered decision by the consumer.
Services involving a reservation, i.e. a fixed date of performance, are
a special case since the trader must make arrangements for execution on
the specified date (air tickets, hotel rooms, etc.). A list is
attached as Annex 2 to the Directive.
The directive concerning door-to-door sales provides for a derogation
for contracts for "foodstuffs or drinks or other goods of current
household consumption" (Article 3.2.b). This derogation is repeated
here, and is particularly aimed towards home supplies made by small
traders. It is extended to services of current consumption. The idea
of this exception is to not introduce a supplementary constraint on the
suppliers of services who are not obliged by their national
 legislation to convey to the consumer a written document containing all
the indications provided for by Article 10: house maintenance
(repairs), personal services (medical services, . . . ) . This exception
only of course concerns cases where there is a contract : simply making
an appointment with a hairdresser or a doctor is not a contract
negociated at a distance in the sense of this text.
 ---pagebreak---                                  - 18 -
Article 4: Restrictions on the use of certain means of communication at
a distance
As stated in recital 8 and in this Article, soliciting of custom must
be carried out with due regard for the privacy of the consumer.
This constraint may take two different forms: prior consent or refusal.
Prior consent means that the consumer has given his agreement to the
supplier   in advance, either directly or using another means of
communicat ion.
A major retail outlet may wish to bring its special offers to the
attention of its regular customers at intervals using an automatic
calling machine. In such cases, on some occasion when the customer
makes a purchase, the supplier will ask him to fill out a form with his
telephone number indicating that he agrees to receive this sort of
telephone call.   If a customer should complain, the trader will have no
difficulty in proving that the consumer had given his agreement.
Refusal means that it is possible for the consumer to indicate that he
no longer wishes to receive certain types of solicitation. Such
arrangements exist for mail: the "Mail Preference Service" in the
United Kingdom or "Stop Pubiicite" in France. The consumer conveys his
wishes to these bodies. Firms which send material by post consult
these lists in order to delete the names of such consumers from their
own lists. In March 1991, the representatives of five such national
bodies signed an agreement with a view to placing the various systems
on a Community-wide basis. The choice between "prior consent" and a
"statement of refusal" will depend on the degree of nuisance or
 intrusion suffered by the consumer. This question of course arises only
with regard to solicitations of custom on an individual basis : a
consumer can always turn off his radio, change the television channel
or not buy a newspaper.
Since systems for refusal already exist and are managed by the trades
concerned, such an option is feasible.
Article 5: Presentation
The first two paragraphs of this Article are modeled on part of Article
2 of the Direct Marketing Code of the International Chamber of
Commerce, adopted on 1 October 1991. This article, under the heading
 "Integrity and honesty" states that no direct marketing offer should be
represented to the consumer as being a form of market research.
The requirement to indicate that the consumer must pay does not mean
 that the exact price must be stated.    It is not possible to know the
cost of a telephone call in advance. On the other hand, it is possible
 for the consumer to be told whether a call Is free, local, long-
distance, international or at an added value.
 ---pagebreak---                                  - 19 -
Article 6: Content of solicitations
This Article lists the details which a consumer must be given in order
to make a fully informed decision to place an order. Certain media
(television, computer, radio) do not enable the consumer to keep a
record of the information. This Article is to be read in conjunction
with Article 10, concerning information on the content of the contract.
Article 7:
This Article provides for specific rules on : "direct offers to the
public for the sale, purchase or rental of products or for the
provision of services in return for payment" (Directive 89/552/CEE of
3rd October 1989, Article 1.6).
This directive of 1989 provides for a general rule on the duration of
broadcasts for sales by television (Article 1 8 ) . On the other hand, it
does not take a position on the nature of this type of broadcast
advertising or television broadcast. By reason of this fact, all of
the rules concerning advertising provided for by the text do not apply
to solicitations for television sales. This directive contains 2
articles relating to the protection of minors : Article 16 in the case
of advertising. Article 22 in the case of broadcasts.
Article 7 chooses Article 22 in order to respect the choice of the
Community   legislator when   it decided   in 1989 not to assimilate
advertising and sales by television.
Article 8; Inertia selIinq
Virtually all the Member States have specific provisions forbidding
 "inertia selling" "sending of unsolicited goods and services" etc.
 (See the analysis of the situation in the various Member States.)
Nonetheless, such practices exist and it is therefore necessary to make
the national rules more precise to ensure that the consumer can keep
the product received.
 In many Member States, techniques have appeared for selling products or
services to the consumer on the basis of a failure to reply:
     "If we receive no reply from you, we shall assume that you agree to
     our proposal".
 In order to ensure that consent     is not extorted in this way,     the
Article states that failure by       the consumer to reply shall      not
constitute consent.
Article 9: Performance
This Article Is intended to provide a general rule for delivery periods
when these are not stipulated. The thirty-day period is customary
practice in Europe. In the United States, this provision is included
 in the federal law on mail-order trading. The laws of the Member
States determine the legal consequences of failure to comply with this
 rule.
 ---pagebreak---                                    - 20
Article 10: Information on the content of the contract
Until the time of performance, the transaction may       have taken place
without any written document.
it is therefore important that the consumer should be properly Informed
of his rights at the time of performance, and this is the purpose of
this Article.
This information must be provided         in writing. Unlike many other
Community instruments, this text stipulates that the language used
shall not be that of the country in which the consumer is resident but
that in which his custom was solicited.
A French consumer replying to an advertisement in an English-language
newspaper or a German-language teleshopping programme cannot expect to
receive all the information in the language of the country in which he
 is resident.    If the medium is disseminated outside its own language
area and the consumer decides to place an order, the language rule must
not be an obstacle to this type of cross-frontier contract.
Certain services can be supplied at a distance (information, banking
data, . . . ) . The consumer does not receive any written document. The
 invoicing is done by an intermediary of the telecommunication operator.
Article 9(2) deals with this particular type of service.
Article 11: Right of withdrawal
 In all Member States, there is a period for withdrawal from contracts
negotiated at a distance, sometimes referred to as a "money back
guarantee". In seven Member States, this period is required by law
 (see Table No 3 of Annex 1 ) , while in the other five it is left to the
discretion of the traders. This practice is widespread in conventional
mail-order selling, but not always in the other sectors using the new
technologies (television, telephone), and the practice must therefore
be made the general rule. Provision must, of course, be made for the
cases in which this measure cannot apply, and this is done in section
4.
Article 12: Payment by telephone
A method of payment which         is increasingly used    in transactions
concluded at a distance is payment by quoting the number of a payment
or credit card, e.g. over the telephone. (This could be referred to as
 "cardless payment by card".) This practice Is very convenient for the
 consumer and should not therefore be prevented.      It is also the most
promising method of payment at a distance.
 It is, however, necessary for clear rules to be laid down for
 liabilities    in the event of      litigation. Since this    is not  an
electronic method of payment, it is not covered by the Recommendation
of November 1988 on electronic payment systems.
The text therefore takes over a provision which is already to be found
 in the interbank rules of the major card payment systems: the risk of
 fraud is not borne by the consumer.
 ---pagebreak---                                  - 21 -
Article 13: Judicial or administrative redress
This Article is based on the Directive on misleading advertising
(84/450/EEC). However, one point has been added, for the reasons
indicated in recital 15: the possibility of cross-frontier legal action
by bodies competent to take action against unfair competition or for
the protection of consumers. This is the only way of putting an end to
malpractice by firms which engage in no activity in their country of
origin but operate by making use of the freedom to provide services.
While the Brussels Convention (1968) recognises that any consumer who
is the victim of malpractice may take action against a firm before the
court at the place where the firm has its registered office, this does
not happen, since the consumer does not have the necessary financial
resources or expertise given the small amount of money at issue. The
right to bring an action must therefore also be given to the
representatives of consumers'       interests and    the  interests of
competitors. These are the only bodies which can act to put an end to
malpractice on behalf of the small consumer or small competitor.
Nevertheless, certain Member States do not allow this possibility to
their associations. That is why this possibility is only available
when the State from where the litigation originates (location of the
firm) allows this procedure.
Article 14: Contract law
This Article is identical with Article 6 of the Directive on contracts
negotiated away from business premises (85/577/EEC).
Article 1$: Community rules
The purpose of this Article is to stipulate that where there is a
specific instrument which gives more extensive rights to the consumer,
 that text will apply. For life insurance, Community legislation
provides for a cooling-off period of 30 days. This Article indicates
that it is the 30-day period provided for in the specific text, and not
the seven-day period prescribed in the general text, that applies.
On the other  hand, the instruments regulating non-life insurance do not
provide for   a cooling-off period. In principle, the general rule
applies and    the consumer is entitled to the cooling-off period
mentioned in  Article 10. Under paragraph 4 of that Article, however,
there is no   cool ing-off period if the contract has to be performed
 immediately.
Articles 16 and 17
The usual provisions on transposition.
 ---pagebreak---                                  - 22 -
The Recommendation consists of four sections and an annex
The first section contains a proposal that the minimum set of basic
rules represented by the Directive should be supplemented by codes of
practice. The Directive lays down general rules applying to all
products and services, and for all means of communication. These
general rules need to be adapted, in particular to the various means of
communication. This can be done by self-regulation in the form of codes
of practice. The text stipulates that codes should be drawn up by
"trade organisations". This will ensure a high degree of uniformity
and wide application of the codes.
The second section sets out the subjects which the Commission     thinks
should be covered by such codes.
 In the third section, the trade associations are asked to ensure proper
compliance with these codes by all their members, to reinforce the
credibility of this type of code.
 In the fourth section, the trade associations are asked to inform the
Commission of the existence and content of such codes. This does not
 imply that the Commission in any way endorses the various codes, but
provides the Commission with information on how its Recommendation is
being implemented. The Commission will afterward evaluate the impact of
this step and will present if necessary new initiatives.
 ---pagebreak---                                                - 23 -
                                                                                        ANNEX 1
                                                                                        TABLE 1
                                         PREVALENCE OF TECHNOLOGIES
1              1                 1                                                                I
| COUNTRY      | NUMBER OF       |                     I OF HOUSEHOLDS WITH                        |
|              | HOUSEHOLDS IN   |                ,                 1                1            1
|              | IN MILLIONS     |   TELEVISION    |   VIDEO        |  TELETEXT      j     CABLE   |
|      |                         |       |             CASSETTE    j   INTERACTIVE   j            j
|      |                         |       |             READER      j   OR NOT        j            j
j AUSTRIA      j     2.8         j       99       j      42         j     15         j       20   j
j BELGIUM      j     3.9         j       98       |      46         j     17         j       86   j
j DENMARK      j     2.3         j       96       j      43         j     30         |       36   j
| FINLAND       j     1.9         j      95        j      52        j      26         j       35   j
j FRANCE       j    21.1         j       96       j      47         |     19         |         2  j
j GERMANY      j    32.8         |       96       |       47        j      14        j       31   j
j GREECE       j      3.2        j       94       j       38        j                j         -  j
j IRELAND      j      1.03       j       95        j      53        j       6        j       35   j
j ITALY        |    19.1         j       97        j      25        j      15        |         -   j
j LUXEMBOURG   j      0.14       j       98        j      59        |       9        |       71    j
j NETHERLANDS j       5.8        j       97        j      49        j      32        j       81    j
j NORWAY       |      1.9        j       95        j      57        j      37         j      26    |
j PORTUGAL     j      3.1         j      94        j      31        j                 I        -  I
| SPAIN         j    11.0         j       98       j       45        j      5         |         -  j
j SWEDEN        |     3.9         j      97        j      68        j      39         j      38    |
 | SWITZERLAND j       2.5        |       94        j      51        j     25         j       65    j
 | U.K.         j    22.1         j       97       j       67        j     32         j         2   j
(-: none or less than 0.5%).
Source: CIT Research 199) (1991 figures)
reproduced frou SPECTRUM, revle* of the "Independant Television CowHsslon".    Autuan 1991
 ---pagebreak---                                                   - 24 -
                                                                                          ANNEX 1
                                                                                          TABLE 2
                                SUBSIDIARIES OF THE FOUR LARGEST EUROPEAN GROUPS
1               1                         1                         i                  I                    l
|   Country     |      N° 1 In Europe    |      N° 2 In Europe          N* 3 In Europe |     N° 4 In Europe |
                     OTTO VERSAND (FRG)        LA REDOUTE (FR)          QUELLE (FRG)           GUS (GB)     j
| Austria         Karsten n° 3                                        Quelle n° 2           Gus n° 1        |
                  Ohler n° 6
                  3 Pagen
                  Moden
                  Muller n° 1
| Belgium         3 Suisse n° 1             Redoute Benelux n° 5      Quelle n° 3
                  Unlgro n° 4
| France          3 Suisse n° 2             La Redoute n° 1           Quelle n° 5
                  Blanche Porte n° 4        Duscon n° 7
                  Becquet n° 10             Malson de Valerie n° 8
                  VItrine Magique n° 15     Vert Baudet n° 12
                                            Cyrlllus n° 25
| Germany         Otto n° 2                                           Quelle n° 1
                  Schwab n° 6                                         SchbpftIn n° 7
                  Heine n° 9                                          Peter Holm n° 2
                  3 Pagen n° 15
j Italy           CIA n° 5
                  Uno Nova
                  Helvetica n° 3
| Portugal                                 | La Redoute n° 1
| Spain            Nenta
                  Catalogo n° 1
j United         | Rainbow Home            j Empire Stores n° 2                         |   Gus n° 1         |
| Kingdom        | Shopping
                J_
Source: Libre Service ActualIte, 7 June 1990.
The table is to be read as follows:
Rows - the various countries with the rankings;
Columns - subsidiaries of the four largest groups.
Example: Ohler N° 6 on the Austrian market Is a subsidiary of     OTTO-VERSAND.
 ---pagebreak---                                                                                              ANNEX 1
                                                                                             TABLE 3
                                        COOLING-OFF PERIOD
                       NATURE
                                         LENGTH                         BASIS
               Mandatory      Voluntary
Belgium                                 7 working   Law of 14.7.1991 (Moniteur beige, 29.8.1991)
                                        days        Art. 79 9 2
Denmark                                 7 days      Law n* 886, 23.12.1987 - Art. 11 9 2
France             M                    7 days      Law 88.21, 6.1.1988 - Art. 1
Germany                                 14 days
                                                                                                     to
Greece             M                    7 working   Law 1961/91, 3.9.1991 - Art. 31 (7 days from
                                        days        confirmation of order or delivery)
 re I and
Italy
Luxembourg         M                    15 days     Law of 25.8.1983 - Art. 7
Netherlands                             8 days
Portuga            M                    7 working   Decree-Law n' 272/87, 3.7.1987 - Art. 11
                                        days
Spain                                               specific provisions in certain regions
United Kingdom                          14 days
 ---pagebreak---                                  - 26 -
                                                              ANNEX 2
THE SITUATION IN THE MEMBER STATES
Belgium
A "Law on trade practices and on consumer information and protection"
was published in the Moniteur Beige of 29 August 1991. The text
consists of 124 Articles and will enter into force on 29 Feburary 1992.
Articles 77 to 83 form Section 9 under the heading "Distance selling".
Article 77 starts by defining distance selling :
     "...Distance selling is selling which occurs without the seller and
     the consumer    being physically   in each other's presence and
     following an offer of sale made as part of a sales system employing
     a means of communication at a distance".
This definition is very general, covering both     products and services
and all means of communication at a distance.     Nonetheless, the rules
laid down In Articles 78 to 82 relate only        to sales of products.
Provision is made for a Royal Decree on services   :
     "Article 83 (1) - The king may :
     ...3) Determine the services or categories of service to be subject
     to this sect ion".
The extent of which the provisions are to apply to services is thus
 left to the discretion of the government. Since the law is very recent,
no implementing decree has yet been enacted in this area.
Article 78 institutes a cooling-off period of seven working days from
the time of delivery and stipulates that the contract is not complete
until this period has expired. Seven days must therefore elapse after
delivery before the contract is concluded. This is perhaps the most
distinctive feature of Belgian law, since it gives the consumer a great
deal of latitude: as long as the contract has not been concluded, the
consumer can cancel the purchase at any time.
 ---pagebreak---                                  - 27 -
Similarly, since the contract has not been concluded, no deposit or
payment of any kind may be demanded of the consumer. This point was
discussed at length during the preparatory work, since the initial text
prohibited the accepting of advance payments. This prohibition has been
relaxed to the extent that payments may be collected by the postman on
delivery. Under Belgian law, the trader thus cannot require advance
payment or even the payment of a deposit. The consumer is not obliged
to pay until seven days after receipt of the goods.
Article 79 (1) deals with the content of the "distance selling offer".
Paragraph 2 lists the information to be contained in the document
supplied to the consumer at the time of delivery. There are special
provisions for the withdrawal clause, which must be printed:
     "In bold characters in a box separate from the text on the front of
     the first page".
 If this clause is not complied with, the case is regarded as one in
which the goods or services are unsolicited, i.e. a case of "inertia
selling". The consumer is "not obliged to pay for the product supplied,
nor to return it".
Article 80 states that the burden of proof in disputes is to be borne
by the seller, and such proof may not consist of presumptive evidence.
Article 81 seeks to regulate a number of practical problems :
     If the seller cannot supply the product within the agreed period he
     must inform the consumer in writing before the period has expired.
     Products are always sent at the seller's risk.
     If the consumer withdraws from the contract, no costs or
     compensation may be demanded except for any costs of collection or
     return. However,    In certain cases (late delivery,       lack of
     information, product not in conformity with the description), such
     costs may have to be borne by the seller.
 ---pagebreak---                                   - 28 -
Article 76 of the same law on trade practices deals        with "inertia
selling". The wording of the text is as follows :
                                 Sect ion 8
                             Inertia selIing
                                Article 76
     "It is forbidden to supply any product to a person without prior
     request and to ask him to purchase this product against payment of
     its price or alternatively to return it to the sender, even free of
     charge.
     "It is also forbidden to render any service to a person without
     prior request and to ask him to accept this service against payment
     of its price.
     "The Minister may grant exemptions from these prohibitions for
     offers   made   for  charitable     purposes. The  number   of  the
     authorisation granted and a statement to the effect that "The
     recipient is under no obligation either to pay for the goods or to
     return them" must be legibly, conspicuously and unambiguously
     marked on the documents relating to the offer.
     "In no event shall the addressee be obliged to pay for the service
     rendered or the product sent nor to return the product sent, even
      if it has been stated that tacit acceptance of the service or
     purchase will be assumed."
There are no rules for canvassing by telephone, fax or other means. It
should merely be mentioned that the law on doorstep canvassing applies
even if the caller has obtained the consumer's agreement in advance by
an "offer to call made by telephone".
The question of television selling has been investigated and the
Conseil national de la Consommation has rendered an opinion. Under
Article 83 of the section on distance selling in the trade practices
 law, the public authorities can, if they so wish, issue a decree
 regulating this type of sale.
 ---pagebreak---                                  - 29 -
Denmark
The regulations relating to distance selling in Denmark are laid down
in the amended Consumer Contract Act, which Is published as the
Lovbekendtgtfrelse n' 886 dated 23 December 1987, and which deals with
the regulation of doorstep selling, distance selling and the continuous
provision of services, and Bekendtgtfrelse n* 887, concerning the
provision of information on the right to cancel contracts concluded
away from business premises. Neither of these instruments is available
 in an authorised translation. The translations made for the purposes
of this review thus have no official standing.
Fundamental principle of the Danish Act
The Danish legislation is based on the fundamental principle that a
trader may not, without prior request, contact a consumer in person or
by telephone at his residence, place of work, or other place not
accessible to the general public, for the purpose of obtaining,
 immediately or at a later date, an offer or acceptance with a view to
the conclusion of a contract, see § 2, subsection 1.
The effect of breaching the principle is that the consumer  is not bound
by the contract, §3.
Effective protection against receiving unsolicited goods is provided by
§ 4, which stipulates that where a supplier sends or delivers a product
to a consumer without his prior request and where this is not due to an
error, the consumer may keep the product free of charge.
There are some exceptions in subsection 2 to the principle laid down in
§ 2, subsection 1. There is no prohibition on the making of unsolicited
offers in person or by telephone regarding the ordering of books,
subscriptions to newspapers, magazines and periodicals and the taking
out of an insurance policy or subscriptions to rescue or ambulance
services. It is also permitted to peddle certain natural products.
The Consumer Contract Act was amended for the purpose of implementing
Council Directive 85/577/EEC, and Chapter 4 of the Act, which related
 to the right to cancel mail-order contracts, was also amended. This
 amendment was proposed by certain opposition parties. The amendment
which was included under this Chapter of the Act refers to offers made
and contracts concluded by means of electronic media devices. The
 regulations were also expanded to cover orders made as a result of
 lawful contacts by telephone. With this background in mind, the term
 "mail-order selling" was changed to "distance selling". In the well
 respected Danish Law Commentary : Karnovs Lovsamling, 12th edition,
p 3754, note n" 102, relating to the term "distance selling" states
 that "electronic media data" should be taken to include tele-tv,
 teledata and cable services etc.
 ---pagebreak---                                  - 30 -
The right of cancellation in relation to distance selling contracts
Chapter 4, § 10, subsection 1, sentence 1, of the Consumer Contract Act
regulates a consumer's right to renounce a contract for goods ordered
on the basis of a catalogue or an advertisement, in circumstances where
the supplier has offered to deliver the goods which were ordered by the
consumer by telephone, letter or other method in writing.
The provisions relating to distance selling also apply if the supplier
has, without previous request, contacted the consumer by telephone and
the consumer has, during or as a result of this call, ordered goods, or
taken out a subscription or insurance policy, see § 10, subsection 1,
sentence 2.
The scope of the regulations is restricted to the above situations.
Subsection 2 provides that the consumer has the right to renounce the
contract in accordance with the specific regulations in §§ 11-13.
Exceptions to the right to cancel
According to §10, subsection 3, the right to cancel does not apply to
the purchase of
1. goods which are manufactured or tailored to the individual needs of
     the purchaser, and
2. foodstuffs or other goods for consumption in the household.
Execution of the right to cancel
 In § 11, first subsection, it is stated when, how and against whom the
purchaser of goods may invoke this right to cancel the contract. The
general rule is that the purchaser may within one week of receipt of
the goods, or the first batch of the goods, cancel the contract by
returning the goods to the supplier. § 11, subsection 1, also provides
for some exceptions to this general rule, see also § 17.
Subsection 2 lays down certain conditions relating to the condition and
quantity of the goods at the time they are returned to the supplier,
which must be complied with by the purchaser in order for him to
maintain    his  right  of  cancellation.   Subsection   3  relates   to
circumstances where the seller is obliged to return payment, if any, to
the purchaser once the latter has cancelled the contract. Subsection 4
states that costs relating to the return of the goods lie with the
purchaser.
 ---pagebreak---                                  - 31 -
§ 12 states when, how and to whom the purchaser must notify a
cancellation of a contract in circumstances where the supplier has
accepted responsibility for collecting the goods. It is provided that
special regulations (some of them stemming from Chapter 3 of the Act
relating to contracts concluded away from a trader's business premises)
apply to these situations.
§ 12(a) stipulates when the consumer is entitled to cancel         in a
situation where he takes out a subscription or an insurance policy, see
§ 10, subsection 1, sentence 2. The general rule is that the consumer
may, within one week from receipt of the conditions of insurance, the
subscription contract or the first delivery, cancel the contract, see
also § 17. It is also provided that special regulations (stemming from
Chapter 3 of the Act relating to contracts concluded away from a
trader's business Dremises) apply to these situations.
Obligation of the trader to provide information regarding the r jcjh t Jto
cance I
§ 13, first subsection, provides that the supplier must, at the time of
the delivery of the goods to the purchaser, give clear information in
writing on the right to cancel the contract. Subsection 2 provides in
relation to the taking out of a subscription or an insurance policy
that within three days at the latest after receiving an order by
telephone, the supplier must send written confirmation of the contract
to the purchaser which must include clear information on the right of
canceI I at ion.
Subsection 3 provides that if the abovementioned items of information
are not given in accordance with subsections 1 and 2 the consumer is
not bound by the contract. Subsection 4 empowers the Minister of
Justice to make regulations relating to the form and content of the
 information. This power has been exercised by the issuing of the
aforementioned BekendtgdreIse n" 887, which lays down the technical
aspects of when and how the information relating to the cancellation of
the contract should be given by the supplier to the consumer. § 1 , §§
4-9 and Annexes 3-6 (prescribing the texts to be used by the supplier
 in different types of distance selling contracts) are particularly
relevant in this regard.
§ 16 of the Act states that the foregoing rules cannot be deviated from
 in a manner which would be detrimental to the consumer's interests.
§ 9 of the BekendtgcJre Ise should also be referred to in this regard.
 (Note : this paragraph contains a typographical error resulting in the
omission of § 6 of the BekendtgdreIse as the text mentions only § 1-5.)
 ---pagebreak---                                    - 32 -
Federal Republic of Germany
Distance selling does not yet form a legal category under German     law
and the term thus has no particular meaning.
In practice four areas are of major concern to consumers:
          The mail-order business
          Unsolicited sending of goods and advertising
          BiIdschirmtext (BTX) and
          Teleshopping
The mail-order business is well established.       It is built into the
civil law system and benefits from consumer protection rules on the
clauses of consumer credit contracts. A voluntary right to return the
products within 14 days compensates for the lack of a mandatory
cooling-off period.
Advertising law:
UnsoIi c i ted send i ng of goods and advertising is an endless source of
consumer      complaints   and   litigation. Here    questions  on   the
applicability of the German advertising law arise. Criminal law may
come into play in cases where the firms operate outside Germany,
although usually in vain.
No special rules in this area are laid down in German law, so solutions
have to be found in civil law rules and rules on unfair marketing
practices. The sending of unsolicited goods is unlawful in principle.
There is an exception only if two prerequisites are fulfilled. The
first is that the addressee is informed that he has no duty to send the
goods back, and secondly, that the goods only have an insignificant
value.
With regard to direct mail advertising, the Jurisprudence is based on
the general clauses of the act prohibiting unfair competition (UWG).
By virtue of this, the courts are in a position to deal with social
changes without the intervention of the legislator.
 ---pagebreak---                                   - 33 -
There are two general clauses enacted in the UWG:
         s.1: the "major"     general  clause,  which  prohibits   unfair
         pract ices and,
         s.3: the "minor"     general  clauses,  prohibiting   misleading
         advert ising.
However, the UWG can only be invoked by the firms and organisations
concerned.    In 1965, the scope was extended to consumer organisations
and businesses which have the right to seek injunctions.
As mentioned above, the application of the UWG means the application of
the case law based on the general clauses of the UWG.
 In one case concerning direct mail advertising, the Bundesgerichtshof
 (Federal High Court) made a decision in which it took a very critical
approach with regard to mailbox advertising. Mailbox advertising is
unlawful when a person fixes a label to his letterbox which reads that
he wishes to receive no advertisements or leaflets, and that those
 failing to respect his wishes will be prosecuted.
The BGH gave the claimant in this case the right to seek an injunction
against a firm whose distributors had engaged         in direct mailbox
advertising despite a label on the mailbox to the contrary. Whilst it
was, however, considered that such case law would not be applicable to
 the distribution of mass advertising by the postal service, the
 situation has also changed in this respect since 1 July 1991. The new
 "General conditions of supply of service" of Deutsche Bundespost,
 adopted under an act amending the Poststrukturgesetz, provide that the
 postal   service   will  henceforth   respect  "opting-out   labels" on
maiI boxes.
 According to the Federal High Court (BGH) in the Telefonwerbung cases
 l-lll (Telefonwerbung I, BGH 19/6/1970 NJW 1970, 1738/Telefonwerbung
 II, BGH 8/6/1989 NJW 19899, 2820/Telefonwerbung III, 8/4/1989 NJW 1990,
 359) it is quite clear that advertising by telephone is unlawful,
 because it is considered to be unfair competition if it is made without
 the prior consent of the recipient of the telephone call.
 The decision was based on the general right to privacy. The stricter
 approach taken for telephone advertising rather than for mailbox
 advertising is Justified by the fact that printed matter can be thrown
 away without being read, whereas a telephone advertisement must at
  least be partially heard, before the person called is able to decide
 whether he wishes to continue the telephone call or not. This is the
 basis of the decisions: the freedom to make one's own decision and not
 the extent to which one takes note of a particular advertisement.
 ---pagebreak---                                       - 34 -
BiIdschirmtext      (BTX):
The most important new technique of distance selling in Germany is BTX,
because it permits direct communication between the contracting parties
in contrast      with    teleshopping, where     the consumer   must   use  the
telephone or write a letter.
In the field of BTX, a new piece of legislation has been enacted, the
Staatsvertrag fur BiIdschirmtext (18 March 1983, revised version 1 9 9 1 ) .
With regard to the applicability of the Staatsvertrag a distinction
must be made between mass communication and individual communication.
Mass communication is mainly subject to the Staatsvertrag.           Individual
communication is subject to the rules of German civil law. So long as
an individual supplier and an individual consumer have not entered into
contractual negotiations, all the rules of the BTX-Staatsvertrag apply,
which means that the supplier is obliged to indicate his name and
address on the screen, to show whether               he   is merely   supplying
 information or advertising, and to clearly state at which point in time
the consumer is entering into individual communication for which he
must pay (Article 5 ) .
The Staatsvertrag obliges suppliers from outside Germany to indicate in
their title the name and the address of a BTX-agent. This BTX-agent
must however be domiciled in the Federal Republic of Germany.               The
Staatsvertrag therefore puts the BTX-agent on an equal footing with the
supplier. This is an approach which could place the BTX-agent in a
difficult situation if he is held responsible for a service which the
supplier has provided from abroad.
This obligation to be domiciled in the Federal Republic does however
create difficulties under EC law, because under EC law, a supplier is
given a right to choose whether he wants to make use of his right of
establishment and settle in another Member State, or whether he relies
on his freedom to provide services, and supplies his service from
outside the Federal Republic (Article 59 EEC T r e a t y ) .
The German      Staatsvertrag     regulates   the conditions under which a
supplier    of     services   has   access   to   television  facilities.   The
Staatsvertrag is of importance for distance selling because it lays
down rules on the admissibility of advertising which must be observed
by the suppliers. The principle of separation between broadcasting and
advertising is laid down in section 8 of the Staatsvertrag.          It is also
part of the federal         law on unfair competition (case law based on
section 1 U W G ) .
 ---pagebreak---                                  - 35 -
In one case concerning BTX, it arose that a provision              in the
Staatsvertrag, under which advertising had to be labelled "W" did not
apply to the electronic mailbox.
A user had to actually see the advertisement on the screen, before he
was able to decide whether he wished to take note of i t or not. This
situation has since changed. An advertisement can now be deleted,
without first being seen on the screen. Under these circumstances it
is doubtful whether advertising in a BTX system still constitutes
unfair competition. To use the "delete" button of a computer is the
the technical equivalent of throwing away paper.
Therefore in principle, the filling of an electronic mailbox with
advertising may be lawful where the user         is able to block his
electronic mailbox from advertising (the equivalent of a label on a
maiI box).
Teleshopp ing
Similar problems with regard to access to television facilities for BTX
arose when teleshopping was introduced as a method of distance selling.
A decision had to be made as to whether the television set could be and
should be used as a marketing instrument.
Teleshopping is not yet subject to new legislation.   It is regulated by
the existing telecommunications law, thereby widening the meaning of
 the term "broadcasting" in the context of Article 5 of the German Basic
Law.
Article 5 covers the information element of broadcasting but does not
cover teleshopping. Similarly, information reports have the benefit of
constitutional protection whereas advertising does not.     In practice,
the constitution has been interpreted in a manner which adapts Article
5 to the needs of the broadcasting stations.
With regard to limits on the freedom to broadcast, the question arises
whether    teleshopping  can  be   regarded  as   a permitted    form  of
broadcasting. Advertising and information broadcasting must be kept
separate.
Teleshopping should therefore bear a label which      makes   it  easy  to
distinguish it from other broadcasting services.
 ---pagebreak---                                    - 36 -
The LSnder have not pursued this path. They treat teleshopping as a
permitted    programme  form   and   place  It within   the   concept   of
advertising. The limits on the extent of permitted shopping are taken
from   the    relevant Lander    legislation,  the  Federal    legislation
(section 1 UWG), the Staatsvertrag and the EEC Directive.
The following rules apply: "Advertising must be kept separate from the
rest of the programme and must be identified by way of an acoustical
signal and an optic label. Advertising must not exert influence on the
rest of the programme, only block advertising is allowed and it may
constitute no more than 20% of the daily broadcasting time".
Exceptions to the rules are provided for where particular broadcasting
services are sponsored.    In practice, however, labelling has not proved
to be very efficient (a solution could be to devote a specific channel
to teleshopping in order to exclude any overlapping with permitted
broadcast ing).
However, as currently practised, teleshopping creates problems because
 it violates the principles of separation by mixing editorial and
advertising elements.
Legal aspects of distance selling
The crucial element to be noted with regard to new communication
techniques using the television screen as a medium between a seller and
a purchaser lies in its transformation as a marketing instrument.
The consumer has to rely on the statements presented to him by the
supplier to advertise the product. However, the presentation of the
product is generally interpreted as an "invitatio ad offerendum" i.e.
an invitation to treat which does not bind the supplier.
With regard to the conclusion of the contract, different problems arise
where both parties are not present at the same time. The moment of
receipt    is important because from that moment the offer becomes
effective and it also defines the deadline in respect of which the
consumer may be entitled to withdraw his offer. Therefore, as long as
the offer has not reached the supplier, the consumer has an opportunity
to withdraw.
 ---pagebreak---                                 - 37 -
The Landgerlcht Bielefeld in 1990 insisted that the supplier of
standard contract terms is under a legal obligation to inform the
consumer of the costs of the product or service he wishes to order.
This decision has given rise to the criticism that it was excessive to
require a supplier to give full information on the costs in his
standard contract terms. A recent amendment of the Staatsvertrag
follows the interpretation made by the Landgerlcht.
A further question of liability arises where a consumer telephones the
number on the screen and engages in direct telephone contact with the
broadcasting station which is working on behalf of the supplier. If
such a person leads the consumer to believe that he is authorised to
give competent information concerning the product but in fact is not,
the supplier will be bound to the consumer on the basis of what has
been negotiated between the consumer and the broadcasting station.
Another delicate question is whether the broadcasting station can be
held liable in the case of the supplier being declared bankrupt or
such I ike.
German law contains the right to withdraw from doorstep selling
contracts. There has been some discussion on the applicability of this
 law to the new techniques of communication. An extension of the
doorstep selling law in this respect was rejected in a parliamentary
debate, because the law was deemed to regard legal transactions
concluded by phone as less dangerous for consumers.
Mail-order firms and the teleshopping industry have conferred on
consumers a voluntary 14 days' right to withdraw from contracts.
However, this has been found not to work very well in practice. The
situation could only be clarified by a statutory obligation, as in
Austria, where a seven-day cooling-off period is under considation.
 ---pagebreak---                                   - 38 -
Greece
The principal form of distance selling currently practised in Greece is
mail-order   by   advertisement   and  direct  marketing. No    form  of
teleshopping exists in Greece as yet, but a public videotex system will
shortly commence operating.
Greece   transposed   the   Community  Directive   concerning  contracts
negotiated away from business premises into domestic law by Ministerial
Decision F159 of 16 July 1990, which included some provisions on
distance selling, and which has now been repealed and replaced by Law
No 1961/91 dated 2 September 1991. This law is of horizontal effect,
providing for the general protection of consumers' interests, and
represents the first legislative attempt to provide such general
protection in Greece.
The text of the Ministerial Decision concerning contracts negotiated
away from business premises and contracts negotiated at a distance has
been repeated in the new Law of 1S91 in an amended form. Chapter 6 of
the Law deals with such agreements concludec "outside the trading
place" specifically in Article 31:
    "in the case that a contract has been concluded from a distance (by
    correspondence, telephone, telegram or in another way) the supplier
     is aiso obliged to compile the documents provided for in Article 29
    and send them together with the contract renunciation form to the
    consumer. The renunciation time-limit provided for in Article 30
    runs from the time the consumer has received the document".
The documents referred to in Article 29 are as follows:
a)  a copy of the contract, which must contain the full name, trading
    name and address of the supplier (a box number is insufficient);
    the date and place of contracting; a description of the goods;
    delivery and payment terms; the rate of real interest and maximum
     interest (where applicable); the tax registration number of the
    suppIier, and
b)  a specimen contract renunciation form.
 ---pagebreak---                                        - 39 -
   In addition, Article 29 provides that any such contract which fails to
   inform the consumer of his right to renounce a contract is rendered
   invalid.
   The text also provides that the provisions of the Chapter do not apply
   to a contract the price of which does not exceed 12 000 drachmas
   (53 ecus), nor to contracts relating to property, the supply of food or
   other goods for current domestic consumption which are frequently or
   regularly supplied.
   Article 30 reinforces the right to renounce the contract within the
   coollng-off period and provides that such right may be exercised by
   sending notice to the supplier within 10 working days from receipt of
   the contract unless a longer period is provided for.
    It may be observed that the new Law does not make any provision with
   regard to the sending of unsolicited goods, although there had been an
    implicit provision in the previous Ministerial Decision to the effect
   that if the goods were sent to the consumer without previous request,
   the contract would be "declared in favour of the consumer", indicating
   that he need not pay the price. There are also no provisions in the
    law regarding the sending of unsolicited mail and the right of refusal,
   nor for a mail-order bonding scheme. There are no mailing or telephone
   preference services operating in Greece at present.
   Spain
   Since the Constitution was adopted in 1978, the division of legislative
   powers between the State and the Autonomous Regions has given rise to a
   great deal of discussion and case law.
    In the field of consumer protection in respect of distance selling, the
   situation is roughly as follows.
        When a region has enacted legislation, that legislation applies to
        the extent that     it is in conformity with the national        legal
        provisions.
        When a region   has   no  specific  legislation, national  legislation
        applies.
    It is therefore necessary    to study both the regional  and the national
    legislat ion.
3)
 ---pagebreak---                                  - 40 -
Spain consists of 17 regions (15 mainland regions plus the Canary and
Balearic Islands).
-   Six regions have specific legislation for consumer protection, and
    of these four use the expression "distance selling".
The definitions given in these four laws are of   interest:
                                  Aragon
Article 31 of the Law of 5 October 1989 regulating commercial     activity
(Law No 9/1989) gives the following definition:
     "Distance selling transactions are those in which the offer is made
    by the seller to the buyer using any means of communication, the
    buyer being asked to place his order at a distance, using the same
    or another means of communication, and in general terms all types
    of sale which do not involve the presence of the buyer and seller."
Article 32 - Among the provisions for distance selling             is the
requirement that offers must be clear and complete, containing at least
-    information  making  it possible  to identify  the  firm  making  the
    offer;
-    a description of the product or service offered;
     the prices and terms of payment;
     the guarantees, time limits for dispatch, and any costs to be borne
     by the consumer.
                                Catalonia
Article 11 of the preliminary draft law regulating        domestic  trade,
published in July 1991, is worded as follows:
     "Distance selling means all sorts of commercial retail selling
     accomplished by an order initally conveyed between two persons by
     any means of communication without their being physically in each
    other's presence, or by any means of social communication and
     electronic transmission which indicates how consumers should place
     their orders".
 ---pagebreak---                                     - 41 -
Article 12 - All distance selling offers must         contain   the   following
information in a clear and unambiguous form.
b)   The product or service offered must be described in quantitative
     and qualitative terms, as must the mode of use, so that it can be
     easily ident if led.
c)   The total price to be paid must be in conformity with Article 8 of
     this law, the expenditure must be shown separately from the costs
     of carriage, if these are borne by the consumer, and the refund
     arrangements must be indicated.
d)   The cooling-off period within which the consumer may return the
     product and recover the deposit he has paid must not be less than
     seven days.
Art icle 13
13.2 - The sale of a product or the rendering of a service which has
not been previously requested by the consumer or user is prohibited in
all cIrcumstances.
                                    GaI icia
Article 32 of the Law of 20 July 1988 regulating commercial activities
 (Law No 10/88) defines distance selling as follows:
     "Distance selling means all forms of retail selling in which the
     trader offers consumers an opportunity to place orders by mail,
     telephone    or    any  other    means  of   graphic    or    audiovisual
     communication     for  products offered    for   sale    in catalogues,
     magazines,      periodicals,    newspapers    or    other      means    of
     commun icat ion."
                                   Va lencia
Distance selling is defined by Article 23(1) of the Law of 29 December
 1986 regulating trade and commercial establishments:
     "For the purposes of this Law, distance selling means the system of
     distribution consisting in offering products for sale by mail and
     asking the consumer to order by mail, telephone or another means of
     communIcat ion."
 ---pagebreak---                                       - 42 -
Section 4 of the same Article states that:
     "Products or samples may not be sent for commercial purposes to the
     home of any person who is not a trader without proof of a request
     by that person.     If items are so sent, the recipient shall be under
     no obligation to pay for, keep or return them."
At national      level,  there   is   a  business ethics code  for distance
selIing.
It includes the following provisions:
             Chapter  IV: arrangements for performance of orders
      "In order to ensure maximum customer satisfaction with the manner
      in which their orders are fulfilled, firms must comply with the
      following rules:
 '4.5     Return and refund
"Conditions for the return of the ordered items for exchange or refund
must be stated in the offer and in the delivery order showing the
standard terms of sale or by all other means convenient to the firm."
France
The concept of a "contract negotiated at a distance" entered French law
by virtue of a Ministerial Order of 3 December               1987 on price
 information for the consumer.
Article 14 of this text is worded as follows:
                                    Art icle 14
      "The price of any product or service proposed to the consumer using
      a means of communication at a distance must be precisely indicated
      to the consumer, by any means admissible as proof, before the
      contract is concluded.
      "Means of communication at a distance within the meaning of this
      Order are all means enabling the consumer to order a product or
      request a service while at a place other than those in which
      customers are normally received.
      "Means of communication at a distance include, in particular,
      electronic data transmission, telephone, video transmission, mail
      and the distribution of printed matter."
Distance selling is regulated by Law No 88-21 of 6 January 1988. This
 text was originally concerned with television selling but also contains
general provisions applying to all distance selling.
 ---pagebreak---                                    - 43 -
The trade association of mail-order and distance selling traders
(SVPCD) has drawn up a "code of practice" setting out the main ethical
rules by which firms engaging in this type of distributive trade are
expected to be guided.
I    Contract formation
The concept of distance is difficult to define. The distance referred
to in the Law of 6 January 1988 is geographical distance, and telephone
selling is thus included.
1.   The catalogue
     The catalogue must be written in French even if it relates only to
     foreign products (Article 1 of the Law of 31 December 1975 on the
     use of the French language).
 It must contain a description of the product and a definition of the
nature of the contract. The price must be stated before the contract is
concluded    (Order of 3 December      1987 on the provision of price
 information to the consumer). If the firm offers a discount, both
prices must be indicated. For credit sales, the offer must comply with
Law No 78-22 of 10 January 1978.
The catalogue must also state what stocks are available.
2.   Inert ia selIing
     Inertia selling is prohibited. The consumer must keep the object
     with a view to returning it, but is not obliged to send it back
     (Article R 40-12 of the Penal Code).
     The text is worded as follows.-
                                Art icle R.40
          "The following shall be punished by imprisonment for a period
         of ten days to one month and a fine of FF 1 200 to FF 3 000 or
         by one of these penalties only:
          "        12 (Decree No 61-138 of 9 February 1961, Article 1)
          'Persons who, without any prior request from the addressee,
         have sent him any object accompanied by an intimation that he
         may accept it on payment of a stipulated price or return it to
          the sender, even if the object can be returned without cost to
          the addressee'".
 ---pagebreak---                                   - 44
   Telephone canvassing
   Telephone canvassing is regulated by Article 1-11 of the Law of
   23 June 1989. It is incorporated as Article 2 bis into Law No 72-
   1137 of 22 December 1972 (on consumer protection in respect of
   canvassing and doorstep selling).
   This article is worded as follows.
                              Art icle 2 bis
              (Law No 89-421 of 23 June 1989, Article 1-11)
        "Following an approach by telephone or by any comparable
        technical means, the trader must provide the consumer with
        confirmation of the offer made. The consumer shall not be bound
        except by his signature. He then benefits from Articles 1 and
        3, paragraph I, of Law No 88-21 of 6 January 1988 on the
        operations consisting of television advertising with an offer
        of sale and known as 'teleshopping'".
   Any firm using this technique must send the consumer     confirmation
   of the offer it has made him.
4. Mail
   There is no legislation regulating the distribution of advertising
   material via letterboxes. The consumer may use the "Stop publicite"
   system: to do so, he need only write to the trade association of
   mail-order and distance selling traders. He can also ask the post
   and telecommunications service to remove his name from the lists
   derived from the telephone directories which are marketed by France
   Telecom. He will then be placed on a suppression list - the "orange
    I ist".
5. Advert is ing by fax
   The same type of list exists for fax and is known as the "saffron
    list". This list is provided for by Article 10 of Law No 89-1008 of
   31 December 1989.
   This text contains the following provisions:
                                Art icle 10
        "Natural or legal persons may indicate that they do not wish to
        be canvassed by telex or fax by having their names placed on a
        public register of persons who are unwilling to receive such
        communications. Inscription in this register shall be free of
        charge.
 ---pagebreak---                                   - 45 -
    "Arrangements for the organisation and operation of the register
    mentioned in the preceding paragraph and for the penalties for
    failure to comply with this Article shall be laid down by decree".
6.  Teleshopping (television selling)
     In French law, the expression    "teleshopping" (teleachat) is used
    for selling by television.
    France is the only Community country to have a special law in this
    area: Law No 88-21 of 6 January 1988. Article 2 of this Law relates
    specifically to teleshopping and stipulates:
         "In the month following enactment of this Law, the Conseil
         Superieur de I'Audiovisuel shall make rules for the scheduling,
         by the radio and television broadcasting services authorised
         under the terms of Law No 86-1067 of 30 September 1986 on
         freedom of communication, of broadcasts wholly or partly
         devoted to the presentation or promotion of objects, products
         or services offered directly for sale."
    The scheduling rules were therefore laid down by a decision of the
     independent audiovisual media authority on 4 February 1988. These
    rules apply to television broadcast by radio waves. Although
    broadcast by radio waves, the channel CANAL + is not covered by
     these regulations but is covered by the Law. Programmes of this
     type are prohibited on the two public channels (A2 and FR3).
The minimum length of such a programme is 15 minutes, the maximum
duration being 90 minutes per week. The programmes must be broadcast
within specified times (between 8.30 and 11.30 a.m. and at night, once
the channel's other programmes have ended).
                                Art icle 2
         "Teleshopping programmes on television services distributed by
         terrestrial broadcasting or satellite shall last not less than
         15 minutes and in total shall not exceed 90 minutes per week.
         They may be broadcast only between 8.30 and 11.30 a.m. or at
         night after the end of the other programmes of the channel, and
         may not be broadcast on Sundays."
     The programme presentation and content are also regulated   (special
     announcement, no interruption by advertising spots).
 ---pagebreak---                                - 46 -
                             Art icle 4
     "Teleshopping programmes shall be clearly announced as such
     and, on television, shall be programmed in dedicated screens,
     without any possibility of interruption, in particular by
     advertising screens. They shall be so presented that they
     cannot be confused with other programmes and may not be the
     subject of trailers or preparatory programmes."
Teleshopping practice differs from catalogue selling in that the
make and name of the manufacturer may not be mentioned on the air.
At most, they may be indicated on the contract.
                             Article 7
     "The make, the name of the manufacturer or distributor of an
     object or product and the name of the party rendering a service
     offered for sale shall not be shown, mentioned or indicated on
     the airwaves or be advertised or published in connection with
     the programme by any other means. The make, if appropriate,
     shall be stated at the time of the order, as must the name of
     the manufacturer or the distributor providing the guarantee."
 Infringement of any of these rules is punished by a fine of between
FF 6 000 and FF 500 000.
               Article 3-11 (Law of 6 January 1988)
     "II. Any de Jure or de facto manager of a radio or television
     service as defined in Article 2 of this Law who schedules a
     programme infringing the rules made pursuant to this same
     Article and has it broadcast or distributed shall incur a fine
     of FF 6 000 to FF 500 000."
Automatic calling machines
New    regulations  for   this   means  of communication  are  under
considerat ion.
The working party of the Conseil National de la Consommation has
delivered an opinion and made recommendations on automatic calling
machines (on 15 March 1990). The recommendations are as follows.
 ---pagebreak---                                     - 47 -
                                "Conclusion
       "The Working Party, being aware of
            the need to follow closely the development of these
            systems;
            the immediate European environment and the discrepancies in
            the regulations applying within it;
            the limitations of self-regulatory measures, which cannot
            be'applied to potential 'cowboys',
       recommends    that    the Government       should   devise   regulatory
       measures in this area with the aim of:
            giving the consumer a right of refusal;
            imposing a strict framework on the use of such techniques:
            content of the messages, identification, liability etc.;
            encouraging    self-regulatory measures        to fill    out   the
            details of this framework.
   "It also urges the Government           to  promote   discussion  of   these
   matters at Community level."
   The texts were submitted for opinion to the members of the CNC at
   its plenary meeting on 3 July 1990 and were unanimously approved by
   both sections.
8. SelIing by Minitel
   Selling by Minitel       is covered by Article 43 of the Law of
   30 September 1986, which instituted a system of prior announcement.
                                  Article 43
       "The    requirement    for    prior    announcement   applies   to   the
       following:
        ... Advertising material distributed by the services mentioned
        in this Article must be presented as such.
        "The service supplier is required to make known to the users:
       1.   The items mentioned in Article 37 of this Law
       2.   The rates applying if there a charge for the service
 ---pagebreak---                                    - 48
    Section V.2 of the Circular of 17 February 1988 (implementing
    Article 43 of the Law) regulates Minitel sales advertising:
          "Under the terms of Article 43 of the Law of 30 September 1986,
          advertising material shall be presented as such, i.e. announced
          by a visual or audible signal.
          "It shall comply with the laws, regulations and trade practices
          applying."
    Apart from this text, there is no specific regulation of selling by
    Minitel.
11   Performance of the contract
A distinction must be made between the order and the obligations of the
part ies.
A    The order
     The order pertains both to contract formation and to contract
     performance. The contract is formed on the date of the order.
     If the order is sent by post, the relevant date is that on which
     the consumer posts it.
     If the order      is placed by telephone or by electronic data
     transmission, the sale is concluded at the moment of the call.
     If the customer hands in the order at a catalogue station, the
     relevant date is the date on which he does so.
     The order form must contain certain information, especially with
     regard to price. It must indicate whether or not the delivery costs
     are included in the price.
      If the consumer   is a minor, the order  form must  be signed by his
      legal guardian.
     Once the    sale   has  been concluded,  obligations   arise  for the
     part ies.
     Obiigat ions
     1.   Seller's obligations
     The seller must deliver an object which corresponds to that ordered
     by the customer. If the object does not correspond to the order,
     the consumer may demand a new delivery, an exchange or cancellation
     of the order and the refund of any moneys paid.
     The seller must deliver the object ordered within a reasonable
     period. If delivery does not take place in good time, the buyer may
     avail himself of Article 1610 of the Civil Code:
 ---pagebreak---                               - 49 -
                           Article 1610
     "If the seller fails to deliver within the time agreed between
     the parties, the purchaser may, at his own discretion, apply
     for rescission of the sale or an order for possession, if the
     delay is caused solely by the seller."
A court ruling of 13 December 1973 introduced the concept of a
"reasonable period" within which delivery must take place (civ 3e,
10 avril: Bull III, n 274, p. 198).
In the event of non-delivery, the seller must reimburse the buyer
if stocks are exhausted. If the package was dispatched but not
delivered, he must provide proof that this is the case and send a
second package if he cannot provide such proof.
The seller must respect the buyer's right to return the goods.
Article 1 of the Law of 6 January 1988 grants the buyer the right
to return goods within seven clear days.
                             Article 1
     "In all distance selling transactions, the buyer of a product
     shall have a period of seven clear days from delivery of the
     order within which he may return the product to the seller for
     exchange or reimbursement, without incurring any penalty other
     than the cost of return."
Any seller who refuses a buyer this right incurs a fine, which is
 laid down in Article 1 of Decree No 88-539 of 5 May 1988.
Buyer's obligations
The buyer must take delivery of the item and pay for it. Payment
may be made at different times. The buyer has a choice of various
modes of payment.
The two modes which give rise to problems are payment "cash on
delivery" (he may be obliged to pay for the entire order when he
has received only part) and payment by credit or debit card (risk
of theft, use of the number without the owner's consent, in which
 case the seller must reimburse the customer).
The customer may also pay by cheque or charge card, in which case
 he does not benefit from the seven-day period prescribed by the
 instrument on consumer credit.
The place of contract formation     is regulated by Article 46 of the
Civil Procedures Code.
 It is either    the  place  of  delivery   or  the buyer's  place of
 residence.
 ---pagebreak---                                   - 50 -
Ireland
The practice of distance selling operates in Ireland on a significantly
lesser scale than in the United Kingdom and there are no methods of
distance selling existing in Ireland which do not exist in the United
Kingdom. There is also a great deal of similarity between Irish and
British law, particularly in the area of contract law, which is the
area most central to distance selling. Little legislation has been
enacted on contract law and the rules and principles which comprise and
shape contract law in Ireland do not in the main radically differ from
those developed by the English Judiciary at Common Law. There are the
same Judge-made requirements as to formation of contract, notice and
other such rules on interpretation of ambiguous clauses as exist in the
 law of the United Kingdom, together with the acceptance of the doctrine
of fundamental breach.
Substantive rules as a means of protecting consumers are now contained
 in three pieces of legislation, the Consumer Information Act 1978, Sale
of Goods Act 1980 and the Data Protection Act 1988, each of which
mirrors similar legislative provisions in the United Kingdom.
The 1980 Act contains the only provision in Irish law which relates
specifically to distance selling. Section 47 of Part VI of the Act
deals with the subject of the sending of unsolicited goods, or "inertia
selling", and essentially states that a person who receives such goods
may keep them without payment in the following circumstances :
a)   at  the end of     six months, provided     the consumer   has not
     unreasonably prevented the supplier from collecting them (during
     this period the consumer should not use the goods and should take
     reasonable care of them); or
b)   30 days after the consumer gives written notice to the sender of
     the fact that goods are unsolicited, the name and address of the
     consumer and the place where the goods can be collected.
 It may be an offence to demand payment for unsolicited goods in such a
way as to imply that the sender has a right to payment.    It is also an
offence to threaten legal action or other dire consequences without
 reasonable cause.
The 1980 Act also lays down certain mandatory provisions relating to
consumer transactions and defines the fairness and reasonableness of
contract terms by reference to certain criteria in the Act's schedule.
 ---pagebreak---                                  - 51 -
The Consumer Information Act 1978 provides protection for consumers
against deceptive sales practices and renders it an offence of strict
liability to apply a false trade description to any goods. The Act
also contains a general clause prohibiting advertisements in relation
to the supply or provision of goods, services or facilities in the
course of or for the purposes of a trade, profession or business if it
Is likely to mislead and thereby cause loss, damage or injury to
members of the public to a material degree.
The 1978 Act also established the Office of Director of Consumer
Affairs, who has certain supervisory, informative and enforcement
responsibilities in respect of both the 1978 Act and the 1980 Act. The
Director may take action by way of prosecution or otherwise in respect
of contracts which infringe the legislative rules. Consumers will now
have a more effective means of enforcing their legislative rights under
a new small claims courts system recently established by the Courts
Acts 1991 on the lines of that operating in the United Kingdom, albeit
on a pilot scheme basis for the time being.
The Data Protection Act 1988, giving effect to the Council of Europe
Data Protection Convention, is very similar in scheme to that of the
1984 UK legislation. The Act gives a right to every           individual
 irrespective of nationality or residence to establish the existence of
personal data, to have access to any such data relating to him and to
ensure that the data kept are collected fairly, are accurate and up-to-
date, are kept for lawful purposes and are not used or disclosed in any
manner incompatible with those purposes.
The Act also requires both data controllers and processors to protect
 the data they keep, and imposes on them a special duty of care in
 relation to the data subjects. For the purposes of the Act, the word
 data means information    in a form    in which  it can be processed
 automatically, and applies to data regarding an individual only and not
 a corporation. The Act does not extend to personal information kept on
manual files but does apply to information kept on every kind of
 computer.
The Act establishes the office of Data Protection Commissioner, who is
 appointed by the Government and whose essential        function   is to
 supervise and monitor the working of the Act. The Irish Act opts for a
 system of selective registration under which only certain selected
 categories of persons have to register. The particulars to be included
 in the register include the purposes for which the personal data is
 kept or used, description of the data and the persons to whom the data
 may be disclosed.
 ---pagebreak---                                   - 52 -
As regards specific provisions in the legislation relating to distance
selling, the following points should be noted:
1)       In the definitions, direct marketing    is defined as including
         direct maiIing.
2)       In relation to subject rights, an individual has the right to
         have his details removed on written request from a direct
         marketing list within 40 days.
         There is no mailing preference service available in Ireland as
         yet, but such a service is being actively considered by the
         industry.
3)       In relation to registration, those whose business consists
         wholly or mainly of direct marketing are among those who have
         to register their particulars in the public register described
         above.
The Irish Act envisages self-regulation through the development of
sectoral codes of practice and there Is provision in the Act for such
codes to be given the force of law. No such codes have yet been
adopted but the Data Protection Commissioner has selected direct
marketing as one of two sectors for initial attention in this regard
and has had a number of preliminary meetings with the Irish Direct
Marketing Association to discuss the possibility of their adopting such
a code of practice in their sector.
 Italy
The Law of 29 December ("Community Law 1990"), passed by the Parliament
 in order to clear "the backlog in the implementation of Community law"
 from which Italy still suffers, provided for powers to be delegated to
 the government to implement a large number of Directives within a year
by means of "decreti delegati" (ministerial orders).
 In the field of consumer protection, Article 41 is concerned with
 implementation of Directive 84/450/EEC (misleading advertising) and
Article 42 provides for an order         implementing Council  Directive
85/577/EEC, stipulating that this order        is to regulate not only
contracts negotiated away from business premises but also certain forms
of distance selling      ("selling by television or other means of
 audiovisual communication").
With a view to exercising these delegated powers, the government has
prepared a preliminary draft order, which was discussed at a meeting
with the trade and consumer organisations on 13 June 1991. The purpose
of this preliminary draft, as formulated in Article 1, is to regulate
 contracts negotiated away from business premises and mail-order sales,
 but Article 8 provides that:
 ---pagebreak---                                  - 53 -
    "The right of withdrawal shall also apply to sales by television or
    by other means of audiovisual communication, including sales by
    means of data processing and electronic data transmission systems".
    (Doorstep selling and certain forms of distance selling are thus
    dealt with together in the same text.) This right obtains for a
    period of seven days (Article 5 ) .
The concern of the Italian Parliament and government is all the more
understandable since there has been an upsurge in selling by television
in Italy, which is unmatched in any other European country. There are
several hundred commercial television stations, most of which are small
stations with a local audience, operating entirely without supervision.
(This "Wild West" was not brought under control and a full inventory
ordered until Law No 233 - the "MAMMI         Law" - was enacted on
9 August 1990. The Inventory should be complete by the end of 1991, but
the rules do not include any provisions for television selling.)
There has so far been no follow-up to the Government's preliminary
draft: there is thus no specific regulation at present for distance
selling. The provisions applying are therefore those of the Civil Code
and case law. They may be outlined as follows.
1.  Def ini t ions
The Civil Code does not refer to the "consumer" but only to the
"buyer". However, the difference between a purchase made in the course
of an occupational activity and a purchase made for a use unconnected
with such activity may be very important in court rulings when the
point at issue is the application of the rules of good faith in the
negotiation (Article 1337), the interpretation (Article 1336) and the
performance (Article 1375) of contracts.
The "contract negotiated at a distance" is also undefined, even though
distance may be important as a source (or contributory cause) of
factual error, thereby rendering the contract void under certain
conditions (Articles 1427 et seq.).
 ---pagebreak---                                   - 54 -
2.   Solicitation
With regard to soliciting for the sale of securities, Law No 216 of
7 June 1974 (which set up the National Stock Exchange Supervisory
Commission - CONSOB) and Law No 77 of 23 March 1983 (which introduced
 investment trusts to Italy) provided for rules governing all "public
solicitation for saving" (including advertising).
All contract solicitation Is covered by Article 1337 of the Civil Code,
which is worded as follows:
     "During   the negotiation and formation of       the contract,    the
     contracting    parties must   act   in good   faith".   (This   "pre-
     contractual" responsibility may give rise to liability for damages
     and interest.)
On the other hand, there are no rules in the Civil Code to safeguard
the consumer's privacy against solicitation by telephone or by means of
data transmission systems, and Article 660 of the Penal Code, which
creates an offence of "Molestie Telefoniche" (creating a nuisance by
 telephone) could apply only in extreme cases.
3.   Right of withdrawal
With regard to the sale of securities, Article 18 of Law No 216/1974
 stipulates that:
          "The validity of contracts signed as a result of canvassing is
          suspended for a period of five days. During this period, the
          consumer, without   incurring any penalty, may      intimate by
          telegram that he is withdrawing from the contract."
     For any other sale, there is the possibility of "annullamento" or
      "risoluzione" (voidance or rescission), but there is no right of
      "ripensamento" (withdrawal). Under Article 1427 of the Civil Code,
      the buyer may ask for a contract which has already been concluded
      to be declared void if there has been an "essential" error:
     according to Article 1428 (sections 2 and 3) errors are "essential"
      if they concern the quality of the object to which the contract
      relates or the identity or status of the seller          (these are
      conditions which may well be satisfied in distance selling). It
      should be emphasised that, in this connection, Article 1431 refers
      to contract "circumstances" and to the "status of the contracting
      parties" as a basis for establishing whether the seller could be
      "aware of    the error". Court    rulings may   thus attach great
      importance to the (non-occupational) "status" of the buyer/consumer
      and to the place where the contract was concluded          (distance
      selling) in order to establish that the error was an essential one
      and that the seller could be aware of it.
 ---pagebreak---                                   - 55 -
It should also be mentioned that, given the lack of legislative rules,
certain trade bodies have established voluntary supervision systems.
    The AIDIM (Italian Direct Marketing Association) has established a
     "Code" for telemarketing.
    The ANVED (Italian Distance Selling Association) has drawn up a
     "Code of business ethics for distance and mail-order selling",
     infringement of which may in theory lead to expulsion (following a
    decision by a disciplinary b o a r d ) . This Code also provides for a
     right of withdrawal, within a period of seven days from receipt of
     the product.
     The IAP (Self-Regulatory Advertising Standards Institute) includes
     in its "Self-regulating code for the advertising industry" specific
     rules requiring fuller information (Article 18) for advertising in
     connection with mail-order selling and prohibits all advertising in
     connection with the sending of unsolicited goods (Article 1 9 ) . The
     "Codes"   and  supervisory  procedures of        the   trade   bodies are
     obviously binding in civil law on their members only.
Luxembourg
Luxembourg law contains one legislative provision concerning distance
selling. This is Article 7 of the Law of 25 August 1983 on legal
protection of the consumer, and is worded as follows:
     "Article 7 - In contracts concluded by correspondence between a
     supplier who is a trader and a final consumer who is a private
      individual, the latter may, within seven days of the order or the
     commitment to purchase and within fifteen days of receipt of the
     goods, withdraw from the contract by means of a registered letter
     with a form for advice of receipt. Any clause in the contract by
     virtue of which the customer renounces his right of withdrawal
     shall be null and void.
     "in the event of any dispute with regard to the date of order or
     commitment to purchase or of the date of receipt of the goods, the
     burden of proof shall be borne by the supplier/trader".
The    distinctive   feature  of   the     Luxembourg     legislation   is the
 institution of two periods for withdrawal from the contract:
     7 days from the order or commitment     to purchase;
     15 days from receipt of the goods.
 ---pagebreak---                                   - 56 -
This withdrawal must be notified in writing by means of a registered
letter with a form for advice of receipt. Under Luxembourg law, the
contract is formed when the consumer returns the order form, but the
sale is finalised when the second cooling-off period has expired.
The text also states that any contract      clause which would have     the
effect of     invalidating  the right    to withdrawal, even with       the
consumer's consent, is null.
Finally, the text reverses the burden         of proof    in ail matters
concerning the dates of the order, the        commitment   to purchase or
receipt of the goods.
When this bill was under discussion, the government was considering a
system of administrative authorisation of traders seeking orders by
correspondence. This proposal has been dropped.
Canvassing by telephone is prohibited, but the manner in which this
prohibition is imposed is somewhat indirect. Article 8 of the Law of
5 March 1970 on hawking states that:
     "It is prohibited to solicit retail       or  wholesale   orders  from
     persons who do not trade in goods ...".
Solicitation by telephone, and apparently       also  the  use  of  fax  to
approach consumers, are not permitted.
     "Article 14-1 - Contracts concluded in contravention of this Law
     are null. However, only a final consumer who            is a private
     individual may avail himself of this provision."
 It may thus be deduced that a contract concluded as a result of a
 telephone call (solicitation) from the trader may be rendered void if
 the consumer so requests.
Article 16 nonetheless lays down penal sanctions for infringement of
Article 8 (one to seven days' imprisonment and a fine of Lfrs 2 000 to
 Lfrs 30 000).
The Law of 25 August 1983 does not define the terms "contracts
 concluded by correspondence" (Article 7) and "contracts concluded by
 home canvassing" (Article 8 ) . It may be deduced that a contract
 concluded by a call made on the trader's initiative is covered by
 Article 8 and a contract concluded by a call made at the consumer's
 initiative is covered by Article 7.
 Luxembourg  law has no provisions for inertia selling.
 The Law of 27 November 1986 "regulating certain trade practices and
 penalties for unfair competition" includes provisions which make it
 possible to bring actions against unfair advertising and render all
 intermediaries involved in its dissemination responsible. Article 18
 reads as follows:
 ---pagebreak---                                  - 57 -
    "Article 18 - Al I commercial advertising promoting an act which is
    to be regarded as an act of unfair competition within the meaning
    of this Law is prohibited.
    "Only the advertiser may be held responsible for this infringement.
    "However, if the latter is not domiciled in the Grand Duchy, the
    injunction proceedings may also be brought against the publisher,
    printer or distributor of the disputed material and against any
    person who contributes to its effects."
Luxembourg also has detailed regulations on videotex (Grand-Ducal
Regulation of 29 October 1986 on the public videotex service) dating
from 8 November 1986. This text also covers electronic mailboxes. In
this context, it is possible to establish "closed groups of users"
(Article 5.3). Article 5.3.32 states that "before including a user in
his closed group or groups, the supplier must, however, have obtained
that user's explicit consent".
The Netherlands
I    Selling by telephone (telemarketing)
There are no specific legal provisions with regard to distance selling
by telephone in the Netherlands.
The    Industry  itself, however, has adopted a code concerning
telemarketing, the so-called "Telemarketing Code". This code contains
rules regarding the use of telephones, protecting consumers against
misleading information provided over the telephone. For example:
     "The person who initiates the phonecall must introduce himself and
    say on whose behalf he is calling. He must also mention the reason
     for the conversation.
     "When the call is not convenient for the consumer at           that
    particular time, the conversation must be ended immediately.
 ---pagebreak---                                  - 58 -
     "Information about the goods and services offered by phone has to
     be clear and exact and the consumer has to be informed of his
     rights and obligations.
     "The agreement made over the telephone has to be confirmed in
     writing and the consumer has the right to cancel the transaction
     within seven days after the receipt of the confirmation."
Companies which belong to the Dutch "Postorderbond" are   bound by their
membership to the rules of the "Telemarketing Code".
Telemarketing is a "booming business" in the Netherlands. Last year
(1990) total sales in telemarketing reached a level of 2.2 billion
Dutch guiIders.
Selling by telefax is not yet practised on a large scale. Selling
between business and consumer is rare, mainly because most consumers do
not own a telefax. In business to business communication the use of
telefax is growing. However, there have been complaints about the
misuse of the telefax, especially concerning unsolicited junkmail.
 I I   Selling by videotex (videoshopping)
 In the Netherlands there have been some experiments      with videotex.
Since 1980 it has been possible to shop from home.
The best-known system is Videotex Nederland (Videotex N L ) . It was
established in 1988. It is the first large-scale open videotex system
which is operational all over the Netherlands.   It has been established
to function as an umbrella organization for all videotex systems in the
future and is therefore partly financed by the Dutch Department of
Economic Affairs. In March 1991 the total number of consultations was
411 000, four times as many as in March 1990.
There is also no specific legislation concerning videoshopping in the
Netherlands, probably because it has so far not taken place on a very
 large scale, and in practice there has therefore been no demand for
 legislat ion as yet.
The Dutch "Postorderbond", however, has developed a code concerning
advertising by way of videotex. This code contains a rule which
guarantees that the consumer has the right to return the goods within
seven days after the transaction without any further obligations.
 ---pagebreak---                                     59 -
I I I   Selling by television
The "Mediawet    1987" is the law concerning radio and        television
programmes. Some of its rules concern advertisement on TV (Dutch
advertising code). For example: "The advertisements may not take
longer than 5% of the total transmission time. Commercials must be
recognisable and separated from the other programmes. They may not
interrupt a programme and are prohibited on Sundays".
The national broadcasters are not allowed to send out commercials, only
the "Stichting Etherreclame", a separate legal person, has this right.
Cable suppliers are not allowed to send out commercials which do not
comply with the above-mentioned conditions, unless the messages are not
specifically meant for the Dutch public.
Neither the "Stichting Etherreclame" nor the cable suppliers can      be
held responsible for delivery or guality of the products.
The "Direct Marketing Institute" in the Netherlands expects television
selling to become an important selling tool over the next years.
 IV   SelIing by ma iI
Nowadays consumers can use all kinds of new media to order goods from a
mail-order company, for example telephone, personal computer, etc., but
also by way of direct response advertising by mail, which means that
the advertisement is published in the paper and the consumer can call a
telephone number or send back a coupon. Another form is "direct mail",
 i.e. all mail that tries to attract the attention of the addressees.
 in Holland there are about 350 mail-order houses. Most of them still
use the catalogue but a few houses have introduced new ordering systems
such as automatic voice-response computers or videotex services. Most
distance selling transactions concern non-food sales, however at
present about 15 000 to 20 000 households in the Netherlands buy
 foodstuffs at a distance and this figure is expected to rise quickly in
 the coming years as well as the volume of direct response advertising
by mail and direct mail.
 ---pagebreak---                                   - 60 -
V    Legal aspects and distance selling in summary
At present, no specific legal provisions are available with regard to
distance selling in the Netherlands. In principle, the existing rules
for legal transactions and sales contracts based on the more classical
form of sale are applicable to distance selling methods.
Rules of Dutch contract law are laid down in Books 3 and 6, Title 5 of
the New Civil Code, which will replace the old books of the Civil Code
on 1 January 1992.
Consensus between the contracting parties is essential for a contract,
which has to be declared in a written, verbal or electronic way. The
contract is concluded once the offerer acknowledges the acceptance, or
could reasonably have acknowledged the acceptance.
Legal conditions for the establishment of a valid contract under Dutch
 law are:
     -    having the capacity to conclude a contract
          a defined subject
          a lawful case
     -    consensus between the contracting parties.
When dealing with distance selling it is not always easy to determine
whether these conditions are fulfilled.
Selling by telephone, television, videotex or mail-order means that an
 agreement is made between seller and consumer to deliver goods or to
 render a service.
The distinctive features of most distance selling methods are that the
 transaction is paperless and that the parties are not physically
 present during the process of concluding the contract. Nevertheless,
 the contract can be agreed upon and legally exists, according to the
 rules of contracting law, without parties being physically in each
other's presence.
The consumer, having less knowledge of a product or service, is
entitled to be correctly informed about the contents of the product or
 service.
 The new section of the New Civil Code seeks to protect the consumer,
 as the weaker party in the process of contracting. The provisions
 cover matters such as delivery, price, risk and time and place of
 delivery.   In consumer sales, the risk will transfer from the seller to
 the consumer at the moment of delivery "de facto".
 ---pagebreak---                                  - 61 -
Article 26 of the New Civil Code contains a provision about payment in
advance. Normally the payment has to be made at the time and place of
delivery. In consumer transactions there can be a request for payment
in advance. This however can never be more than 50% of the total price
of any goods. The Netherlands is the only Member State which has such
a provision in its Civil Code.
A derogation in standard terms which is disadvantageous for the
consumer is regarded as unfair and can be annulled. There is also a
 list of standard terms which are definitely regarded as unfair to the
consumer (black list) and a list of terms presumed to be unfair (grey
 Iist).
Another form of protection of the consumer concerns unsolicited goods.
A consumer who receives these goods has the right to keep them or to
return the goods at the expense of the seller.
 It is very difficult for a consumer to prove that, for example, the
wrong quantity of goods has been delivered. Similarly, the problem of
proving that the product has not been delivered is not an easy one to
solve.
To determine who bears the burden of proof, Dutch law applies the
principle: "The party who asserts a fact has to prove it" (Article 177
of the Code of Civil Procedure [RV]). This provision, however, also
allows the Judge the option of disregarding this rule.    If its effects
are unfair, parties are in principle free to stipulate who bears the
burden of proof. For the consumer who uses distance selling methods,
 it means that he will have the burden of proof when he disputes a
delivery which was not ordered, unless the supplier and the consumer
 have agreed otherwise, which will not often be the case.
The fact that the consumer as contracting party has no influence at all
on the outcome of the electronic transaction makes it even more
 difficult to provide evidence. He may actually be right, but since he
 bears the burden of proof, he may be unable to produce the required
 evidence and may therefore fail in his legal action.
 In January 1992, rules on consumer sales (Section 7.5 of the New Civil
 Code) and general conditions laid down in the NCC will give the
 consumer some means of protection. Articles 6: 236-238 (black and grey
 list) are only applicable to contracts with the consumer as contracting
 party. These provisions were specifically drawn up to give the
 consumer more protection. In some cases the Supreme Court has already
 pre-empted these articles by applying Section 6.5.3.
 ---pagebreak---                                  - 62 -
General rules on misleading advertising are set out in the New Civil
Code, which is adjusted to the restrictions and prohibitions laid down
in the minimum EEC Directive on misleading advertising, which gives a
minimum standard of protection. Member States are entitled to have a
higher standard of consumer protection in their national legislation.
Selling by telephone is not regulated under Dutch law.      In order to
protect the consumer against aggressive sales methods the law on door-
to-door sales came into force in 1975. On 3 July 1989 this law was
changed due to the obligations laid down in the EEC Directive on
contracts negotiated away from business premises. One of the essential
elements of this law is the fact that the agreement concluded between
both parties has to be in writing and that each party has to receive a
copy.   If this condition is not fulfilled, the contract will not be
vaI id.
The consumer is also entitled to a cooling-off period of eight days in
which he can decide whether or not to undo the bargain.
During the adjustments to the directive, selling by telephone was not
 included in the rules. The legislator thought that the pressure put on
the consumer to buy goods or services in the case of selling by
telephone was less than for door-to-door sales. The telemarketing
 industry, however, has developed a code of conduct for telephone
contracts.
 In order to control the use of personal data and its registration,
movement and storage, the Privacy Act (Wet Persoons Registratie) came
 into being in the Netherlands in 1990. It gives the individual the
right to inspect and correct the data registered about him and the
right to know to which persons or organisations data are given.    It is
forbidden to make use of this data for purposes other than that for
which they were registered. Control of the proper implementation of
the Act    is the responsibility of an      independent  institute, the
 "Registratiekamer" (Registration Chamber).
Portugal
Portugal appears to have been the first Member State of the Community
 to introduce general regulations for all forms of distance selling. The
basic text on protection of Portuguese consumers is Law No 29/81 of
 22 August 1981.
An instrument    implementing this text has been enacted: Decree-Law
No 272/87 of 3 July 1987 on doorstep selling (Chapter I), mail-order
 selling (Chapter II) and inertia selling (Chapter 111).
 ---pagebreak---                                      - 63 -
I.  Mai 1-order selIIno
Chapter II of the Decree covers not only mail-order          selling but  also
all forms of distance selling.
This Chapter consists of five articles with the following content.
1)  Definition
    Article 8 of the Decree seeks both to define distance selling and
     to delimit the scope of the instrument.
    The first paragraph of the text is worth reproducing in full.
                                   Article 8
                            Definition and scope
     "1. For the purposes of this text, mail-order selling means the
         mode of retail distribution in which the consumer is offered
         the facility of placing an order by post, telephone or any
         other means of communication for goods or services presented in
         catalogues, magazines, newspapers, printed matter or via any
         other graphic or audiovisual media."
2)   Content of the offer
Article 9 emphasises the need for the offer to be clear and to contain
certain items.
 It contains a list of items which it is mandatory to include in the
offer made to the consumer.
                                   Article 9
                             Content of the offer
         Offers for mail-order sales shall be clear, complete and so
         worded    that  there can be no doubt          as    to the nature,
         characteristics and price of the goods or services or about the
         terms of payment.
          In accordance   with   the   foregoing paragraph,   the offer  shall
          include:
         a)   a description of the goods or services, indicating those
              characteristics which are necessary to enable them to be
              fully identified;
         b)   the price of the goods or services and the mode and terms
              of payment;
         c)   any other charge to be borne by the consumer;
         d)   the period within which the goods will be dispatched or
              performance of the service begun, from the date of receipt
              by the seller of the consumer's request;
         e)   the guarantee    and   after-sales  service  arrangements,  when
              Justified by the nature of the goods;
 ---pagebreak---                                      - 64 -
         f)    the name, address and details permitting identification of
               the selling firm and an indication of the place to which
               the   consumer   may    address   orders   or   requests    for
               information; indication of a post-office box alone or any
               other indication which does not allow the seller or his
               representatives to be immediately located is not permitted.
     "3. For     the   purposes  of   the   foregoing   paragraphs,   general
          advertising which does not include any specific proposal for
          the purchase of goods or the rendering of a service is not
          regarded as an offer of sale."
3)   Form and content of the contract
Article 10 requires the seller to give the consumer a document
containing the items mentioned in Article 9 (section 1 ) .
This document is not required when the order form is an integral part
of the medium used for the sales offer (section 2 ) .
The contract must be in writing when the sum to be paid is Esc 9 000 or
more (section 3 ) . This figure was increased to Esc 20 000 (i.e. 115
ecus) by an Order of 20 June 1991.
                                   Article 10
                    Form, content and value of the contract
     "1. Once the consumer has notified the seller of his acceptance of
          the offer, the latter shall, either before or at the time of
          dispatch of the goods or rendering of the service, provide him
          with a document containing the items mentioned in the foregoing
          Article. These items must correspond with the terms of the
           initial offer.
     "2. The document mentioned        in the preceding paragraph      is not
          required when the order form is an integral part of the medium
          used for the sales offer.
     "3. In mailorder sales, contracts in the sum of Esc 20 000 or more
          shall always be made in writing."
4)   Withdrawal from the contract and obligation to provide       information
This right and obligation are regulated in Articles 11 and 12.         Article
11 gives the consumer the right to withdraw from the contract          subject
 to certain conditions.
                                   Article 11
                      Right to withdraw from the contract
                     and obligation to provide information
       1. The consumer may withdraw from the contract           within   seven
          working days following receipt of the goods.
 ---pagebreak---                                    - 65 -
    "2. Before conclusion of the contract, the consumer must be
         informed in writing by the other contracting party of the right
        mentioned in the preceding paragraph.
    "3. The time limit mentioned in paragraph       1 may   be   extended  by
         agreement between the parties.
    "4. Mail-order sales are subject to the provisions of      Article 4 (4)
         to the effect that the right to withdraw from          the contract
         cannot be renounced and that the exercise of this     right may not
         give rise to penalties, and to the provisions         of Article 6
         stating   that  advance    payment may    not   be   demanded    and
         stipulating the nature of any such payment."
                                 Art icle 4
    "4. Clauses by which the right stipulated            in the preceding
         paragraph are renounced shall be void, as shall              clauses
         providing for indemnities or penalties of whatever nature in
         the event of the consumer's exercising his rights."
         Article 4 (4) makes it virtually     impossible  for   the buyer  to
         renounce this right.
                                 Article 6
                              Advance payment
    "1. No payment may be demanded from the consumer before receipt of
         the goods or performance of the service.
    "2. Any sum paid by the consumer before expiry of the periods
         mentioned in Article 4 is regarded as proof of the contract and
         as an instalment on the agreed price."
                                 Article 12
                   Mode of withdrawal from the contract
    "Subject to agreement between the parties as to the mode and
    consequences of exercising the right to withdraw from the contract,
    the provisions of Article 5 apply, mutatis mutandis, to mail-order
    sales."
11. Inert ia selIing
Two articles of the Decree regulate this type of practice.
1)  Article 14 defines and prohibits inertia selling.
                                 Article 14
               Definition and prohibition of inertia selling
     "1. Trade practices in which a consumer's failure to reply to an
         offer or proposal made to him are considered as tacit
          acceptance may not be used to promote retail distribution of
         goods or services.
 ---pagebreak---                                    - 66 -
     "2. The consumer shall in no case incur any obligation as a result
         of the practices mentioned in the preceding paragraph even if
         the offers or proposals expressly stated that failure to
         respond within a certain time would be regarded as tacit
         acceptance."
2)  Article 15 is concerned with non-solicited goods. A consumer who
     receives a product which he has not ordered or requested may keep
     it free of charge.
     If he returns it, he is entitled to reimbursement of the costs of
     doing so.
                                 Article 15
                             Unsolicited goods
     "1. Without prejudice to Article 62 of Decree-Law No 28/84 of
         20 January 1984, the addressee receiving a product which has
         not been requested or ordered or which does not represent the
         performance of some valid contract is not required to return it
         or pay for it but may keep it free of charge.
     "2. If, notwithstanding the provisions of the preceding paragraph,
          the   addressee  returns   the  product,  he   is entitled   to
          reimbursement of the return costs within 30 working days of his
         do i ng so."
United Kingdom
Current distance selling practices in the United Kingdom reflect an
 increasingly large proportion of sales of goods and services taking
place at a distance. Whilst traditional distance selling techniques
such as mail-order remain popular, the industry is taking advantage of
modern technology to develop new selling methods, and the use of
videotex and teleshopping is becoming more prevalent. It is of interest
to note that the turnover of the catalogue mail-order trade constitutes
more than 3 X of the total retail trade in the UK. It is also relevant
to note that the growth of distance selling transactions has .been
encouraged by the increased availability of credit cards and debit
cards.
Legal regulation of distance selling transactions in the UK consists in
the main of the basic principles of English contract law at common law.
Consumer transactions are also generally subject to legislative rules
particularly in the area of consumer credit and financial services, but
the notable feature of the current regulation of distance selling is
the amount of "soft" law in the form of self-regulatory codes of
practice which dominate this field. The matter is further complicated
by the large number of organisations involved in the self-regulatory
process.
 ---pagebreak---                                  - 67 -
An important point to note in respect of these codes of practice is
that some are issued subject to specific statutory authority and have
the force of law, although most of them are non-binding, but may well
be referred to by the courts as representing good practice. Many of the
codes have been introduced in co-operation with the Director-General
for Fair Trading, who has a duty under the Fair Trading Act 1973 to
encourage trade associations to prepare and disseminate codes of
practice. Part 3 of the 1973 Act gives the Director-General of Fair
Trading a general power to act against any person carrying on business
who persists in conduct detrimental to the interests of, or is unfair
to, consumers. The Director-General has powers of investigation, and
may seek assurances from businesses that they will refrain from the
conduct giving rise to the complaints, and he may ultimately bring
proceedings in the restrictive practices court or in the county court,
as may be required. The traders' associations operating codes of
practice which where drawn up in consultation with the Office of Fair
Trading will generally report to the Director-General on an annual
basis on the operation and effectiveness of the codes.
Consumer distance selling contracts at common law require for their
validity the basic components of offer, acceptance, consideration and
 intention of the parties to contract. Advertisements by distant sellers
are in fact classified as invitations to treat, which invite offers.
When a consumer places an order, he is making an offer to the supplier
who, in the context of distance selling techniques, usually accepts the
offer by the act of dispatching the goods. The terms of the contract
are normally agreed between the parties but there are some terms
 implied by Statute. The Sale of Goods Act 1979 implies conditions into
consumer contracts that the seller has the right to sell the goods;
that the goods must, if they are sold by description, correspond with
that description; that the goods are merchantable and fit for the
purpose as is reasonable to expect having regard to their description
and circumstances of the case; that the goods must be reasonably fit
for a required purpose which had been made known to the seller; and
that where goods are sold by sample, they must correspond with that
sample.
Goods can only be rejected by the consumer after delivery if any of the
aforementioned conditions have been broken or if there is an express
right to do so in the contract. The Code of Practice of the Mail-order
Traders' Association recommends its members to supply goods on approval
 for 14 days, and in general, consumers are given the benefit of this
 recommendation subject to their returning the goods undamaged.
 ---pagebreak---                                   - 68 -
The Consumer Credit Act 1974 provides for a five-day cooling-off period
in respect of consumer credit agreements and the Consumer Protection
(cancellation of contracts concluded away from business premises)
Regulations 1987 provides for a seven-day cooling-off period for other
contracts   but   only  where   the   contract   was  preceded   by  oral
representations made in the debtor's presence, thus not applying to
"pure" distance sales.
The Unfair Contract Terms Act 1977 restricts the effectiveness of
contract terms which seek to exclude or limit liability for breach of
contract or negligence. Liability for personal injury or death caused
by negligence can never be excluded and liability for other loss
similarly caused can only be excluded     if it is reasonable to do so. A
supplier who deals under standard written contract terms is not
entitled to restrict or exclude liability for breach of terms, for
example, by changing the mode of performance of the contract in a
distance sales transaction.
Advertising as an important feature of distance selling is regulated
both by legislation and codes of practice. The Trade Descriptions Act
 1968 renders it an offence of strict liability in the course of a trade
or business to apply a materially false trade description to goods. The
Consumer Protection Act.1987 prohibits misleading price indications in
advertisements and requires consumers to be provided with the aggregate
sum required to be paid by them including ail ancillary charges.
Codes of Practice in this area such as the British Code of Advertising
Practice 1988 contain a general rule that advertisements should be
 legal, decent, honest and truthful as well as non-exploitative of
consumers' lack of knowledge and experience. The British Code of Sales
Promotion Practice 1990 applies the same rule to promotional goods.
The consumer    is required to be given accurate details of price,
 quality, and terms of business, as well as facilities to enquire and
 inspect goods.
Direct marketing by mail and telephone are two particularly common
methods of distance selling in the UK. The Unsolicited Goods & Services
Acts 1971 and 1975 provide that a person who receives unsolicited goods
 can treat them as an unconditional gift at the expiration of six months
 from their receipt when the seller has made no attempt to retrieve
 them, or when a period of 30 days has expired from the date on which
 the consumer notified the supplier that they are unsolicited goods. It
 is a criminal offence to demand payment for such goods. The relevant
 codes of practice require mailing lists to be accurate, up-to-date, and
 ---pagebreak---                                  - 69 -
confidential. A mailing preference service exists whereby members of
the public can submit personal applications indicating their wish to be
included or excluded from current mailing lists. This "MPS Consumer
File" is maintained and applied by members of the service to all
consumer lists. Those persons who wish to have their names excluded are
placed on a suppression list as opposed to having their names deleted
ent irely.
There is little provision in UK law regulating the marketing of goods
and services through unsolicited telephone calls except in the area of
the financial services industry. Under § 56 Financial Services Act
1986, there are restrictions amounting in effect to a ban on cold
calling whether by telephone or personal visit. Investment agreements
made as a result of such solicitations are rendered unenforceable, but
there are exceptions to the rule. The Branch Systems General Licence
Condit ions under which private telephone systems operate in the UK
provide that a subscriber must comply with a written request from a
person who wishes not to receive further marketing calls.
No telephone preference service as yet exists but it is being actively
considered by the industry at present. The direct marketing industry's
codes of practice have provisions regarding telephone marketing to the
effect that calls should be honestly made and within reasonable hours,
that no high pressure sales tactics should be used nor should
solicitation occur under the guise of a survey or research. The
 identity of the caller and purpose of the call should be made clear and
a seven-day cooling-off period should apply to oral contracts formed in
this manner. The recipient of the call should be entitled to terminate
 the call at any point.
The issue of payments in distance sales transactions has also been the
subject of self-regulatory control. In the UK, there has been a
considerable increase in the use of credit cards and direct debit
payment cards. The Mail-Order Protection Scheme Code of Practice
prohibits "forward trading", that is, the use of prepayments to finance
other orders received. The scheme may require from advertisers an
 indemnity in the form of a stakeholders account until the goods are
dispatched, or a bank guarantee. The scheme also offers an indemnity to
consumers who lose their money through the insolvency of the seller and
where the advertisement required payment in advance. In relation to
payment by credit card, such method of payment creates a three-way
 contract   between  consumer, supplier   and card    issuer: under  575
 Consumer Credit Act 1974. a consumer can equally claim against the card
 issuer in the event of a breach of contract, which is particularly
 useful in the case of the suppliers' insolvency. However, liability in
 such a case is limited to cases where each single item exceeds £ 100.
 ---pagebreak---                                 - 70 -
The general rule at common law regarding delivery of goods is that
unless a time is agreed upon in the contract, there is an implied term
that delivery should take place within a reasonable time. The Mail
Order Protection Scheme requires advertisers to state the delivery
period, which should not exceed 28 days, and that in the case of undue
delay, the consumer should be notified of this fact and be given the
right to cancel the contract. Risk of damage or loss of goods should
usually rest on the seller according to the Mail Order Traders'
Association Code of Practice.
Various mechanisms exist for the handling of complaints by consumers
relating to distance selling. Formal litigation is possible immediately
but the contracts may provide that settlement by arbitration or
otherwise must first be attempted. The Consumer Arbitration Agreements
Act 1988 provides that an arbitration agreement is enforceable only If
the consumer agrees to submit to arbitration after the dispute has
arisen. Usually disputes are adjudicated in the County Courts. Claims
with a value of less than £ 1 000 fall within the Jurisdiction of the
Small Claims Court, which operates informal procedures.
Generally, the industry's codes of practice contain provisions for the
 independent  investigation of complaints of breaches of codes of
practice. The advertiser will usually be asked to amend, or withdraw
the offending advertisement. Formal reprimands may be issued and,
ultimately, a member expelled.
 ---pagebreak---                                        - 71 -
                                  Proposal for a
                                COUNCIL DIRECTIVE
          on the protection of consumers in respect of contracts
                 negotiated at a distance (distance selling)
THE COUNCIL OF THE EUROPEAN COMMUNITIES,
Having    regard    to  the   Treaty    establishing     the    European   Economic
Community, and in particular Article 100a thereof,
Having regard to the proposal from the Commission 1 ,
In cooperation with the European Parliament 2 ,
Having regard to the opinion of the Economic and Social Committee 3 ,
1. Whereas measures must be taken for the gradual establishment of the
 internal market by 31 December 1992; whereas the internal market              is to
be an area without     internal frontiers within which the free movement of
goods, persons, services and capital         is assured;
2. Whereas cross-frontier distance selling could be               one of   the main
tangible    results    of   the   completion    of   the    internal    market   for
consumers, as noted inter alia in the Communication from the Commission
entitled "Towards a single market         in distribution" 4 ;
3.   Whereas    the  development    of   new  technologies     is multiplying    the
means available to consumers to have knowledge of the offers being made
everywhere    in the Community and for placing orders-, whereas there           is a
need   to  introduce a minimum      set of common    rules, before each       Member
State takes different or diverging measures to protect consumers, with
negative repercussions on competition between businesses              in the single
market;
1
2
3
4    COM(91) 41, 11.3.1991
 ---pagebreak---                                      - 72 -
4.   Whereas paragraphs 18 and 19 of the Annex to the Council Resolution
of 14 April 1975 on a preliminary programme of the European Economic
Community for a consumer protection and information policy5 point to
the need to protect the purchasers of goods or services against demands
for payment    for unsolicited goods and against        high-pressure selling
methods;
5.   Whereas   the   Communication    from   the  Commission   to the  Council
entitled "A new impetus for consumer protection policy" and approved by
the Council Resolution of 23 June 19866 states           in paragraph 33 that
the    Commission   will   present   proposals   regarding    the use  of   new
 information    technologies   enabling    consumers   to  place  orders   with
suppliers from their homes;
6.   Whereas    the   Council   Resolution    of  9 November 1989   on   future
priorities for relaunching consumer protection policy7 calls upon the
Commission to give priority to the areas referred to in the Annex to
 the   Resolution;    whereas   that   Annex   refers   to   "new technologies
 involving teleshopping"; whereas the Commission has responded to this
 Resolution by adopting a three-year action plan for consumer protection
 policy in the EEC (1990-92)8; and whereas that plan provides for the
 adoption of a Directive;
 7.  Whereas contracts negotiated at a distance involve the use of one
 or more means of communication at a distance and whereas the ongoing
 evolution of these means of communication does not allow an exhaustive
 list to be compiled but requires the definition of principles valid
 even for those that are still little used; whereas it is necessary to
 establish clearly the difference between advertising and solicitation;
 whereas there is solicitation from the time the consumer possesses the
 elements necessary to contract;
 5    OJ No C  92, 25.4.1975, p. 1.
 6    OJ No C  167, 5.7.1986, p. 1.
 7    0J No C  294, 22.11.1989, p. 1.
 8    COM(90)  98, 3.5.1990.
 ---pagebreak---                                        - 73 -
8.   Whereas the principles set out in Articles 8 and 10 of the European
Convention for the Protection of Human Rights and Fundamental                   Freedoms
of   4 November 1950     apply;     whereas    all     matters     relating      to   the
collection, storage and processing of personal data fall under Council
Directives No ... and No ... of                               [on the protection of
 individuals   in relation     to  the   processing     of   personal    data    and   the
                          9
protection of privacy] ; whereas          the consumer's right to freedom from
 intrusion   should   be    recognized     and   provision       made    for    possible
restrictions    on  the   use   of   certain   means     of   communication       and   in
particular restrictions deriving from the above Directives;
9.   Whereas the consumer's custom         is solicited via a variety of means
of communication; whereas such solicitations must be clearly                  identified
as commercial    propositions; whereas this          information must comply with
the    other     relevant     Community      rules,       in    particular        Council
Directive 84/450/EEC of 10 September 1984 relating to the approximation
of  the  laws, regulations and administrative provisions of                  the Member
                                                 10
States concerning misleading advertising ;
10. Whereas the use of such technologies must not                lead to a reduction
 in the  information provided      to the consumer; whereas           It   is therefore
necessary to determine the information that              is required to be sent to
the consumer whatever the means of communication used;
11. Whereas    the   promotional      technique     involving     the   sending     of   a
product or    the provision of a service         to the consumer         in return for
payment   may   not  be  permitted     without    a   prior    request    from    or   the
explicit agreement of the consumer;
Whereas   it  is necessary    to prescribe a time         limit for performance         if
 this is not specified at the time of ordering;
9
10   OJ No L 250, 19.9.1984, p. 17.
 ---pagebreak---                                    - 74 -
12. Whereas information disseminated by certain electronic technologies
often has an ephemeral character      insofar as it is not received on a
permanent medium; whereas the consumer must therefore receive written
notice of the content of the contract and of all Information necessary
to its proper performance, not later than at the time of the delivery
of the good or the supply of the service;
13. Whereas the consumer is not able to see in concreto the product or
ascertain   the service   provided   at   the moment when  his   custom  is
solicited; whereas the consumer       should be permitted  to cancel    the
contract after receiving the product or service; whereas, if this right
 is to be more than formal, the costs borne by the consumer when making
use of it must be limited to the charges for return; whereas Council
Directive 85/577/EEC of 20 December      1985 to protect the consumer    in
                                                               11
respect of contracts negotiated away from business premises        is to be
amended later to ensure harmonization, in particular of the method for
calculating the period during which the contract may be cancelled;
 14. Whereas this Directive should not prejudice the free movement of
 radio and television broadcasts, as guaranteed by Articles 59 and 60,
 third paragraph, of the EEC Treaty, nor the application of the rules
of Council Directive 89/552/EEC of 3 October 1989 on the coordination
of certain provisions laid down by law, regulation or administrative
 action in Member States, concerning the pursuit of television
 broadcasting activities 12 ;
 15. Whereas non-compliance with this Directive may harm not .only
 numerous consumers but also competitors; whereas there is therefore a
 need for provisions permitting trade and consumer organizations to
monitor its application in transborder transactions; whereas to the
extent authorized by the legislation of the Member States concerned,
 these organizations should also be allowed to act in the State from
where the conflict originates,
 11 0J No L 372, 31.12.1985, p. 31.
12 0J No L 298, 17.10.1989, p. 23.
 ---pagebreak---                                    - 75 -
HAS ADOPTED THIS DIRECTIVE
                                 Article 1
                                   Object
The object of this Directive is to approximate the laws, regulations
and administrative provisions of the Member States concerning contracts
negotiated   at  a distance between     consumers   and  suppliers  and  the
soliciting   of  custom  and   preparatory    acts  with   a  view  to  such
contracts.
                                 Art icle 2
                                Def ini t ions
For the purposes of this Directive:
     "Contract negotiated at a distance" means any contract concerning a
    product or service concluded after solicitation of custom by the
    supplier:
         without  the supplier    and  the consumer    being  simultaneously
         present and
         using a means of communication at a distance to convey the
         contract solicitation and the order.
    This concept does not include arrangements, orders, agreements or
     individual  acts of   performance within     an overall   contract, in
    particular   a contract   to be performed     by a series of separate
    operations over a period of time.
 ---pagebreak---                                 - 76 -
"Consumer" means a natural person who,       in transactions covered by
this Directive,     is acting  for purposes which     can be regarded    as
outside his trade or profession.
"SUPDIier" means a natural or legal person who, for the transaction
in question, acts     in his commercial   or professional    capacity, and
anyone acting in the name or on behalf of a supplier.
"Means of communication at a distance" means any method permitting
the exchange of the      information required   for  the negotiation and
conclusion of a contract between a consumer and a supplier not in
the presence of one another; a non-exhaustive          list of    the means
covered by this Directive is contained      in Annex 1.
"Operator of a means of communication" means any public or private
natural or    legal person making the various means of communication
at a distance available to suppliers and/or consumers.
"Contract    solicitation"   means   any  communication    at   a  distance
 including  all   the necessary   elements  to enable    the  recipient  to
enter   directly   into a contractual    commitment,   simple   advertising
being excluded.
"Order" means the expression by the consumer         of his   intention to
enter  into a contractual    commitment.
 ---pagebreak---                                      - 77 -
                                  Article 3
                                  Exempt ions
This Directive shall not apply to:
          automatic vending machines,
          automated commercial premises,
     -    made-to-measure products,
          services with reservation (a list of the services         in question
          is attached as Annex 2 ) ,
          contracts for the supply of:
               foodstuffs, beverages or other goods      intended   for current
               consumption in the household;
               services for current consumption;
                                   Article 4
                   Restrictions on the use of certain means
                        of communication at a distance
Member States shall take the necessary measures to ensure that means of
communication at a distance are used to solicit custom from consumers
only under conditions of fair competition and with due regard for the
 consumer's privacy, particularly      pursuant   to Article   17 of   Directive
 ../../... [concerning the protection of individuals        in relation to the
 processing of personal data and privacy        in the context of the public
 digital telecommunications networks].
                                   Article 5
                                 Presentation
 (1) Member States shall take the necessary measures to ensure that all
      contract   solicitations shall be designed and presented         in such a
      way as to comply with the principles of good faith          in commercial
      transactions, and those for the protection of minors.
 ---pagebreak---                                      - 78 -
(2) All   contract    solicitations   shall    make  their   commercial    purpose
     clear.
(3) Where the cost of using a means of communication at a distance to
     place   the  order   or  perform    the  service   must   be  borne   by  the
     consumer, he shall be informed of this fact if it is not evident.
                                    Art icle 6
                       Content of contract solicitations
At   the  time   when   his  custom   is   solicited,   the   consumer   shall  be
provided with clear and unambiguous         information  in any way appropriate
to the means of communication, comprising in particular:
     the identity of the supplier;
     the main characteristics of the product or service;
     the price and quantity of any transport charges if not          included;
     the payment, delivery and performance arrangements;
     the period for which the solicitation remains valid.
                                    Art icle 7
                      Contract solicitation by television
 In the case of solicitation by television:
     the presentation within the meaning of Article 5 of this Directive
     must exclusively observe the provisions relating to the protection
     of minors in Article 22 of Directive 89/552/EEC;
      the supplier must ensure that the information set out          in Article 6
      is conveyed in writing no later than the moment when direct contact
      is made between the supplier and the consumer.
 ---pagebreak---                                      - 79 -
                                   Art icle 8
                                Inert ia selIing
(1) Member States shall take appropriate steps to ensure that consumers
    are not supplied with products or services which they have not
    ordered beforehand and asked either to purchase them or to return
    them, even at no cost.
(2) These steps shall at least include a provision to the effect that
     if products or services have been so supplied the consumer shall
    have the right to do as he pleases with them unless there has been
    an obvious mistake, in which case he shall merely hold them at the
    disposal   of   the supplier    for a reasonable     period   and  provided
    their nature so permits.
(3) Failure to reply shall not constitute consent.
(4) This   Article    shall   not  apply   to  the   sending   of   samples  or
    promotional    gifts    provided    it  is  made   clear  that    they  are
    completely free of charge with no obligation for the consumer.
                                   Art icle 9
                                  Performance
 If no   time   limit   for  performance    is stipulated    in   the  contract
solicitation, the order shall be performed not more than thirty days
after it is received by the supplier.
                                   Article 10
                 Information on the content of the contract
(1) Not later than at the time of delivery, the consumer shall receive
     the following information in writing and in the language used in
     the contract solicitation:
 ---pagebreak---                                       - 80 -
        the  identity    of  the supplier     and   the address of       one   of  his
        places of business;
        main features of the product or service;
        price and quantity;
        payment    arrangements,     including    credit   terms,    or    terms    for
        payment by instalments;
        right of withdrawal within the meaning of Article 11;
        arrangements for exercising this right.
    Where a contract     is open-ended, and       in particular    if   it   is to be
    performed  by means     of   repeated   operations,    the  conditions       under
    which it can be terminated must be indicated.
(2) Paragraph   1   shall   not   apply   to   services   supplied      directly     by
    telematic means, precisely the performance of which             is effected by
    the use of    means of     communication    at   a distance, when        they   are
    supplied  only    on one occasion.       Nevertheless,    the operator        of  a
    technique   of   communication     shall  be   obliged   to   indicate     to   the
    consumer, on demand, the location of the supplier.
                                    Article 11
                              Right of withdrawal
(1) For any contract negotiated at a distance, the consumer shall have
    a period of not     less than seven days starting from the receipt of
    the product or service in which he may cancel the contract without
    penalty.   The    only   costs    payable    shall   be   the   direct      return
    charges, if appropriate.
    For  services, this period shall begin when            the consumer       receives
    documentation expressing the explicit agreement of the supplier.
 ---pagebreak---                                        - 81
 (2) The  consumer   must   be able    to provide    a document   as evidence    of
     return.
 (3) Where a product     or service     is purchased on credit, Member       States
     shall provide for cancellation of credit agreements concluded with
     the supplier when the right of return          is exercised;    if the credit
     has  not   been  provided    directly    by  the  supplier,   Article   11  of
                                       13
     Council Directive 87/102/EEC          on consumer credit shall apply.
 (4) The present Article shall not apply to:
         services,    if   an  essential     part  of  performance    is  begun  or
         should have begun before the end of the seven day period;
          transactions     concerning     securities    and  other    products   or
          services the price of which is dependent on fluctuations in the
          financial market which cannot be controlled by the supplier;
          contracts concluded in the form of an authenticated document;
          unless otherwise stipulated, to products:
               which can be immediately reproduced;
               for personal hygiene;
               which by reason of their nature cannot be returned.
                                     Article 12
                                  Payment by card
 If the owner of a payment card questions the validity of any operation
 in which the number of the card has been recorded without presentation
 or  electronic   identification of       the means of    payment,  the  operation
 shall thereby be cancelled.       The supplier's bank account shall then be
 debited   and  the   owner's account       shall  be recredited    as quickly   as
 possible, without prejudice to any claim for damages in the event of an
 operation's being disputed      improperly.
13  OJ No L 42, 12.2.1987, p. 48
 ---pagebreak---                                        - 82 -
                                    Article 13
                     Judicial or administrative redress
(1) Member States shall ensure that adequate and effective means exist
    to   enforce   compliance    with   this   Directive   in  the    interests    of
    consumers and competitors.
(2) To this end, Member States shall make provision, among others, for
    trade   and   consumer    organizations    which  can,   according    to   their
    national    legislation,     demonstrate    a  legitimate    interest    in   the
    matter, to be entitled, if it is recognized by the Member State of
    the conflict, to take legal action and/or bring complaints before a
    competent administrative body.
(3) Member   States    shall,    as  necessary,    empower    the    courts   and/or
    administrative authorities, in the event of           litigation, to require
    the supplier to provide proof, in particular of the content of the
    solicitation,     the   existence    of  a  prior   request,    the  consumer's
    consent and compliance with time limits.
(4) This    Directive     shall    not    exclude   voluntary     supervision      of
    compliance     with   its   provisions     by  self-regulatory      bodies    and
    recourse to such bodies by the persons or organizations referred to
     in  paragraph    2,   if  procedures     involving   such  bodies    exist    in
    addition to the court or administrative procedures referred                \f> in
    this Art icle.
                                    Article 14
                                  Binding nature
The   consumer   may   not   waive   the    rights  conferred    on   him   by   this
Direct ive.
 ---pagebreak---                                     - 83 -
                                  Article 15
                               Community rules
Nothing   in this Directive shall preclude the application of provisions
specific    to techniques,   products   or  services   under  other   Community
instruments.
                                  Article 16
                                Implementat ion
Member   States   shall  bring    into   force  the   laws,   regulations    and
administrative provisions necessary to comply with this Directive not
later than 31 December 1994.
When   Member   States  adopt   these    measures,   these   shall   contain   a
reference to this Directive or shall be accompanied by such            reference
on the occasion of their official publication.         The procedure for such
reference shall be laid down by Member States.
Member   States  shall  communicate    to  the  Commission   the   text  of  the
provisions of national     law which they adopt     in the field governed by
this Direct ive.
                                  Article 17
This Directive is addressed to the Member States
Done at Brussels,                           For the Council
                                            The President
 ---pagebreak---                                    - 84 -
                                  ANNEX 1
Examples   of  means  of  communication  at  a   distance  covered  by  this
Direct ive:
    unaddressed printed matter
    addressed printed matter
    standard letter
    press advertising with order form
    catalogue
     telephone with human intervention
     telephone  without  human  intervention   (automatic  calling  machine,
    audiotext)
     radio
     videophone (telephone with screen)
     videotex   (microcomputer  and  television   screen, with  keyboard  or
     touch screen)
    electronic ma iI
     fax (facsimile machine)
     television (teleshopping)
 ---pagebreak---                                  - 85 -
                                ANNEX 2
Services with reservation within the meaning of Article 3
transport;
accommodat ion;
cater ing-,
entertainment.
 ---pagebreak---                                    - 86 -
                           IMPACT ASSFFfMEwr TTBM
                  THE IMPACT OF THE PROPOSAL ON BUSINESS
             with special reference to small and medium-sized
                             enterprises (SMEs)
Title of proposal:     Protection of consumers     In respect of contracts
                       negotiated at a distance (distance selling)
Reference number:      SPC/171/91 Rev. 4
The proposal
1.  Taking account of the principle of subsidiarity, why is Community
    legislation necessary in this area and what are its main alms?
    Traditional mail-order selling involves the use of a catalogue to
    present the products and a letter to order them.       The proliferation
    of    new   technologies    (telephone,    television,   computer)    has
    completely    transformed    this   activity,  which   will   in   future
     increasingly   be   conducted   on   a  cross-frontier   basis.   It  is
    necessary to establish a minimum      Community base before each Member
    State    adopts   its   own   legislation,   which   might   hinder   the
    functioning of the internal market.
    The Communication     "Towards a single market      in distribution has
    already stated (p.17):
    "Because of the multinational character of the market the principle
    of subsidiarity may lead to the conclusion that         if some sort of
    regulatory framework is needed, then it should from the outset be
    at Community level."
 ---pagebreak---                                        - 87 -
    In this communication , the Commission advocates the development of
    self-regulatory systems provided they are accepted by all                parties
    concerned.    Consequently,       the    proposal     for    a   directive     is
    accompanied    by   a   Recommendation    which    is specifically     aimed   at
    establishing codes of practice.
    The main aims are to ensure         legal safeguards for the consumer and
    his right of choice in contracts negotiated at a distance.
The impact on business
2.  Who will be affected by the proposal?
    Firms    which    market     products     and   services      using   means    of
    communication     at   a distance    and   the operators     of  such  means of
    commun i cat ion.
    Traditional mail-order selling         is carried out by a fairly         limited
    number of firms.       New technologies could give rise to the creation
    of    new   firms     specialised     in    certain    of    these    techniques
     (television, Minitel) or       enable    small   producers    to market    their
    products directly (particularly by home delivery).
3.  What will businesses have to do to comply with the proposal?
     Six Member States already have general           laws covering all forms of
     distance  selling     (Portugal, Greece, Denmark, Belgium,           Luxembourg
     and France).
     In the other Member       States, there are provisions          giving  partial
     coverage.
     The provisions of the present text mirror provisions contained                 in
     national  laws.     In certain Member States, some of these provisions
     or similar   provisions are found        in the codes of conduct of        trade
     associations.     These    codes   apply    only   to   the   members   of   the
     associat ions.
 ---pagebreak---                                    - 88 -
   The   directive    fixes  certain   minimum   conditions    regarding    the
   presentation,     the  content  of   a  solicitation    and    the   written
   information on the contract which must follow.        The directive fixes
   the period for delivery at 30 days, unless otherwise agreed, and
   provides for a period of at least 7 days within which the right of
   withdrawal    may   be exercised.   The directive     also provides     that
   professional and consumer organisations will, if it is allowed by
   the Member State of the conflict be able to take legal action to
   ensure the correct implementation of the directive, and that the
   reversal of the burden of proof will be possible            in appropriate
   cases.
4. What economic effects is the proposal likely to have?
   -    on employment
   -    on investment and creation of new businesses
   -    on the competitive position of businesses
   The text establishes Community rules which will have particular
   effects on the use of new technologies in distance selling.             This
   may lead to these techniques being used more often by consumers in
    the   internal   market  and  consequently    may  have   the    effect  of
    increasing   employment   and   investment   in these    activities.    The
    transborder      possibilities    may     lead    to    an      intensified
   competitiveness in retail business.
5. Does the proposal contain measures to take account of the specific
    situation of small and medium-sized firms (reduced or different
    requirements etc.)?
    There is no differentiation according to the size of the business.
    However, some activities which are excluded from the scope of the
    directives'    application, particularly     the  supply    of   day-to-day
    household   goods and services, are usually engaged           in by small
    businesses.
 ---pagebreak---                                      - 89 -
Consultation
6.  List the organisations which were consulted about the proposal and
    outline their main views.
    In April 1991 a discussion document was drawn up under the title
    "Discussion paper for a Directive on distance selling".        This text
    was disseminated by two channels :
         to the trade, via the Committee on Commerce and Distribution, a
         consultative body which advises DG XXIII;
         to consumers, via the Consumers' Consultative Council, which
         advises the Consumer Policy Service.
     In the  light of all the comments received, a preliminary draft
    proposal was drawn up in July 1991.        This text was disseminated
    through the same channels.
     In its opinion of 13 September 1991 on the discussion paper, the
    Committee of Commerce and Distribution argued that the text should
    be either a recommendation or a :
     "(limited) framework Directive leaving sufficient room for traders
    and their professional       associations to work out self-regulatory
    provisions".
    The CCD    in it's opinion of 16 January 1992 based on the draft
    proposal for a directive of July 1991, criticised several articles
    and stated clearly that :
     "   the  CCD is   not    convinced  about the    need  for such  an   ail
         embracing   directive       ...  and  rejects     the    Commission's
         arguments".
 ---pagebreak---                                          90 -
Several     professional       associations,       including   CECD/FEWITA/GEDIS,
Eurochambres,      European Association of Mail order             and   the Liaison
Committee of Retail Trade Associations expressed themselves as not
being    in   favour   of    the   proposed    directive,    based   on    the   texts
presented      during    the    second    half   of   1991.  This    was    also     the
opinion of the other professional associations                in the trade sector
and   of    individual     trade    firms,    particularly     those    In   distance
selling,     who maintained        that   the  provisions    of   the  text     should
simply be contained        in codes of practice.
The SPC received about 50 opinions on the two documents (Discussion
Document and Draft Directive, 1991 versions).                 These opinions came
from   consumer     associations, professional          associations other         than
those involved in distance selling, different operators of means of
communication (televisions, newspapers, etc.), the banks and firms
 in the tourism sector.
The   large majority of         those opinions      recognised   the necessity of
community      action     in   the   matter    of   contracts    negotiated       at   a
distance and were not totally opposed to the draft directive.                        The
principle      criticism      rested    on   the   financial    safeguard     systems
 (guarantee     funds),     a   subject    which    is  now   dealt   with     by    the
recommendat ion.
Taking    account     of    the   discussions     and   comments,    following       the
distribution of the first draft of July 1991, the Commission also
presents the text of a recommendation, which is intended to promote
codes of practice         in the matter of distance selling and              indicate
the points which can be dealt with by these codes.
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                      ISSN 0254-1475
                                                               COM (92) 11 final
                                                      DOCUMENTS
EN                                                                              io
                                Catalogue number: CB-CO-92-238-EN-C
                                                             ISBN 92-77-44593-9
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