Source: https://www.lawteacher.net/free-law-essays/commercial-law/the-distance-selling-directive-applies-to-any-consumer-distance-contract-commercial-law-essay.php
Timestamp: 2018-12-11 00:11:20
Document Index: 647362686

Matched Legal Cases: ['Art 5', 'Art 7', 'Art 7', 'Art7', 'Art 7', 'Art 2', 'Art. 1', 'Art. 5', 'Art. 5', 'Art 5', 'Art 6', 'Art 7', 'Art 7', 'Art7', 'Art 6', 'Art 17', 'Art 5', 'Art 11', 'Art. 6']

The distance selling directive applies to any consumer distance
John ordered a number of small items from the same online supplier for his child’s birthday. The items included a games console together with several games, a tricycle (his child had picked this toy when they visited a high street store), music CDs, an e-book (compatible with his e-book reader), an iPod engraved with his child's name and a selection box of chocolates. Some items arrived a month before his child's birthday. Other items did not arrive at all. John doesn't have a telephone number to contact the supplier about the undelivered items, and it is taking a few days to get a response to e-mails which he has sent demanding redress. Ignoring issues of jurisdiction and applicable law, does John have any protection available to consumers under existing rules, particularly those concerning distance contracts and/or the provision of information society services, remedies available to John under the existing Legal framework, and are there any proposals for this position to change in the future?
Recent advances in three areas — computer technology, telecommunications technology, and software and information technology — are changing lives in ways scarcely imagined less than two decades ago. These modern technologies are being combined, especially through the Internet, to link millions of people in every corner of the word, deals are struck, transactions completed, and decisions taken in a time-frame that would have seemed simply inconceivable a few years ago. [1]
Shopping has evolved with growth of technology which has made it possible for people to conclude on line rather in store and with this came the advent of electronic transactions (E-Contacts). Electronic commerce (EC or e-commerce) describes the process of buying, selling, transferring, or exchanging products, services, or information via computer networks, including the Internet [2] and a legal frame work that would regulate the buying and selling of goods at a distance has been created.
The Directive 1997/7/EC [3] (Distance Selling Directive) was put in place to address the growing trend and provides a number of fundamental legal rights for consumers in order to ensure a high level of consumer protection throughout the EU. The E-commerce Directive 2000/31/EC [4] was also adopted to provide a legal framework for the provision of Information Society Services [5] within the European Union.
In the words of the European Consumer Affairs Commissioner Meglena Kuneva [6] . "Consumers and retailers are beginning to embrace e-commerce at national level but internal market barriers still persist online. The potential of the online internal market to deliver
greater choice and lower price to consumers and new markets for retailers is considerable. We need to redouble our efforts to tackle the remaining borders."
The Distance Selling Directive applies to any consumer distance contract made under the law of an EU-Member State as well as the European Economic Area (EEA). [7] The directive ensuring the protection of consumers within the EU in respect of distance contract [8] using “means of distance communication" [9] has provided certain rights and obligations between a supplier and consumer.
Directive 97/7/EC applicable law consumer distance contracts within EU Member State as well as European Economic Area (EEA). The directive aims at ensuring a high level of protection for consumers within the EU by providing certain rights and obligations between a supplier and consumer when transacting at a distance using “means of distance communication." [10] It provides the following the rights:
The Consumer's right to cancel the contract within a minimum of 7 working days without giving any reason and without penalty, except the cost of returning the goods (right of withdrawal) is provided for by Article 6.
Article 12 The strength of every distance contract rest upon the prior information requirement as provided by Article 4 and must be complied with. In accordance with
the directive the following prior information shall be furnished by the supplier to the consumer in good time prior to the conclusion of any distance contract [11] stating:
(i) where appropriate, the minimum duration of the contract in the case of contracts for the supply of products or services to be performed permanently or recurrently." [12]
As regards John case it can be said that requirement of Article 4( 1) (a) (e) and (f), as stated above and that of ‘address’ ‘performance ‘ [13] and a ‘right of withdrawal’ was not complied with. And the provisions of Art 5(1) which provides that consumer must receive written confirmation or confirmation in another durable medium available and accessible to him of the information referred to in Article 4 (1) (a) to (f), in good time during the performance of the contract was not complied with.
Also taking a look at Art 7( 1)(97/7/EC) which states that “unless the parties have agreed otherwise, the supplier must execute the order within a maximum of 30 days from the day following that on which the consumer forwarded his order to the supplier; and also Art 7(2)(97/7/EC) Where a supplier fails to perform his side of the contract on the grounds that the goods or services ordered are unavailable, the consumer must be informed of this situation and must be able to obtain a refund of any sums he has paid as soon as possible and
in any case within 30 days; and lastly Art7(3)(97/7/EC) which further states that hat the supplier may provide the consumer with goods or services of equivalent quality and price provided that this possibility was provided for prior to the conclusion of the contract or in the contract. With regards to the goods that were not delivered It can be said that John was not of the above information stated in Art 7(2) of the directive or even an equivalent as provided in 7 (3)
3.0 THE E– COMMERCE DIRECTIVE 2000/31/EC
The E-Commerce Directive 2000/31/EC sets out principles and duties to reach a high standard of consumer protection. [14] The directive ensures “the free movement of “information society services" across the European Community and to encourage greater use of e-commerce by breaking down barriers across Europe and boost consumer confidence and trust by clarifying the rights and obligations of businesses and consumers" [15]
Remedies available to John under the provisions of this directive are going to be taken into considerations. Art 2(a) of the directive makes reference to the definition of "information society services": within the meaning of Article 1(2) of Directive 98/34/EC as amended by Directive 98/48/EC; which provides defines an ‘ISS’ as
‘‘any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storageof data, and at the individual request of a recipient of a service;’’(Art. 1(2)98/48/EC) [16]
(c) the details of the service provider, including his electronic mail address, which allow him to be contacted rapidly and communicated with in a direct and effective manner;"(Art. 5(1)(a – c )2000/31/EC) [17]
But considering the position of the court in the German case of Bundesverband der Verbraucherzentralen und Verbraucherverbände – Verbraucherzentrale Bundesverband eV V. deutsche internet versicherung AG [18] (‘’DIV Case’’) It was held by the courts that providing only an e – mail address as a sole means of contact does not comply with the provision of Art. 5(1) (c) of the directive stating categorically that
“…….in addition to its e - mail address other information which allows the service provider to be contacted rapidly….." [19] [Emphasis supplied]
the service, in addition to its electronic mail address, with other information in order to achieve the result intended by that provision" [20] That is the ISS provider is to provide details including its e – mail address to achieve the purpose of rapid communication in a direct and effective manner.
Borrowing the decision in the above case,the provision of Art 5(1) (c) is not fully satisfied by the on line supplier as ‘details of the service provider ’ which allow him to be contacted rapidly and communicated with in a direct and effective manner" is not provided, as this is evident in the fact it is taking a few days to get a response to e-mails which John has sent demanding redress.
The court in paragraph 20 of the Judgement further said that “Accordingly, the mention of the ‘electronic mail address’ in Article 5 (1)(c) of the Directive reflects the Community legislature’s wish to ensure that information giving access to an electronic communication is to be supplied by the service provider to the recipients of the service, but does not mean that it intended to dispense with other types of non-electronic communication which may be used in addition to it" [21]
(d) the languages offered for the conclusion of the contract." [22]
Article 11 further provides that except when otherwise agreed by parties who are not consumers, that in cases where the recipient of the service places his order through technological means, the following principles apply:“the service provider has to acknowledge the receipt of the recipient's order without undue delay and by electronic means; and the order and the acknowledgement of receipt are deemed to be received when the parties to whom
they are addressed are able to access them" [23] In this circumstance there is no indication that any statement was in fact provided regarding the different technical steps John would take to conclude the contract or access the service requested , as John would be better informed. Information on how to identify and resolve input errors nor was language requirements also provided.
for the provision of services if performance has begun, with the consumer's agreement, before the end of the seven working day period referred to in paragraph 1,
for the supply of goods or services the price of which is dependent on fluctuations in the financial market which cannot be controlled by the supplier,
for the supply of goods made to the consumer's specifications or clearly personalized or which, by reason of their nature, cannot be returned or are liable to deteriorate or expire rapidly,
for gaming and lottery services"
John can only exercise his right of withdrawal for the music CD’s and games, if the goods have not been ‘unsealed.’ The iPod engraved with his child's name also falls under the Art 6(3) because it is made to John’s specifications and personalized with engraving of his son’s name. The box of chocolate cannot be returned as it is liable to deteriorate or expire rapidly.
Pursuant to Art 7(1) of the directive “unless the parties have agreed otherwise, the supplier must execute the order within a maximum of 30 days from the day following that on which the consumer forwarded his order to the supplier" and since the goods have not been fully delivered and no refund of any sums he has paid as soon as possible and in any case within 30 days as stated in Art 7(2) and that the “supplier may provide the consumer with goods or services of equivalent quality and price provided that this possibility was provided for prior to the conclusion of the contract or in the contract... the cost of returning the goods following exercise of the right of withdrawal (by John)shall, in this case, be borne by the supplier"Art7(3)
By the provisions of Art 6(4) John can withdraw from the contract within a period of 3 months depending on the EU member state he is domiciled in and any credit agreement cancelled without penalty as there is no prior information providing for 7 days ‘cooling off period’ [24]
An effective means to deal with consumers' complaints in respect of distance selling shall also be established as provided for by Art 17
An action for a breach of duty under the E- Commerce directive (2000/31/EC) to provide information prior to contract can also be brought by the customer by the provisions of Art 5 as the supplier did not state the different technical means in concluding the contract or an acknowledgement of receipt of the information in when accessed or, hence the supplier is in breach of Art 11 [25] As the required information were not provided by the ISS prior to the conclusion of the contract. The requirements are important as provided in Articles. 5,10 & 11 of the EC directive.
Article 17 & 18 also provides for out of court settlement and court. Complaints can be lay by the consumer through a consumer advocacy bureau such as the European Consumer Centres Network (ECC-Net) [26]
to Article 15(1) (c) of the Brussels I Regulation (44/2001) [27] a consumer in Europe’s habitual domicile shall have Jurisdiction to entertain suit a filed against the trader who ‘directs his activities’ towards the consumers country or to several other countries including country and the contract falls within the scope of those activities, similarly the applicable law shall be that of the consumer’s habitual domicile if it can be found that the trader also ‘directs his activities’ towards that country or several other countries including that country as provided for in Art. 6 (1) (c) of the Rome I Regulation EC (593/2008). [28]
A 2007 report by the Organization for Economic Co-operation and Development found consistent reasons “retailers don’t export everything from fear of fraud, concerns over logistics and payments, import laws and language barriers. Indeed, discussions about doing business globally and accepting international payments online sometimes conjure images of nightmarish complications — increased risk of fraudulent transactions, complex political or regulatory issues, and customs or taxation problems" [29]
The European Commission in March 2009 published a detailed report on cross-border e-commerce .The report revealed that the gap between domestic and cross-border e-commerce was widening. From 2006 to 2008, the share of EU consumers shopping online grew from 27% to 33% while cross border e-commerce remained more or less at the same level (6% to 7%). [30]
The issue of redress is the major constraint of cross border e – Commerce in the EU because in most cases goods requested are not delivered by the e – merchants. According to the ECC - Net [31] ‘73 % of the complaints that was received in 2008 was for non delivery’ [32] of the goods
or services ordered, while 15 % of the complaints was for delayed delivery and 7% was for partial delivery [33] which is similar to the case of ‘John’ and e- toys4U.hk. This is due largely divergent consumer protection regimes in different Member states and non compliance of e – merchants with the directives.
For retailers in Europe, the fragmentation of consumer protection rules and other rules on VAT, recycling fees and levies are the main regulatory barriers to cross-border e-commerce. [34] The national implementation of these rules differs markedly from one Member State to another, giving rise to a business environment that is complex, costly and unpredictable. The adoption of proposals to tackle these obstacles is therefore central to changing the behaviour of retailers and, as a result, the opportunities for consumers. [35]
When trying to shop online consumers are faced with a number of problems in another country. Foreign online traders have severally refused to accept orders from consumers living in another country. As uncertainty about what to do or who to turn to should they experience a problem are experienced by consumers, especially if it comes to resolving a complaint with a foreign trader. [36]
The fragmentation in the existing legislative framework is believed by the European commission [37] not adequately protect consumers and creates internal market problems:
“The European Commission have cited the legal fragmentation of business-toconsumer rules as a barrier to the Internal Market and consumer confidence in crossborder shopping. Member States have different rules on distance and off-premises selling and these variations create unnecessary costs and disincentives for business when trading cross-border. In order to achieve a single set of European contract rules on consumer remedies, EU action is necessary to harmonise the legislative and regulatory framework across the 27 Member State" [38]
A higher level of consumer protection is ensured, establishing a real retail internal market, making it easier and less costly for traders to sell cross border and providing consumers with a larger choice and competitive prices. [39]
The proposed Directive, specifically Articles 4 and 5, would establish minimum requirements for consumer protection. [40] It would put in place EU wide rules covering:
PRE-CONTRACTUAL INFORMATION : A contract prior to conclusion , the Directive would require before concluding a contract the Directive would require key information such as, the main characteristics of the product, geographical address and identity of the trader, the price inclusive of taxes, all additional freight, delivery or postal charges etc to be provided by the trader to the consumer. As this would enable the consumer to make an informed choice. [41]
delivery of a good, a right to a refund as soon as possible and no later than 7 days from the date of delivery can be exercised by the consumer. [42]
COOLING OFF PERIODS (DISTANCE AND PRESSURE SALES): An EU wide cooling off period of 14 calendar days is introduced by the proposed directive, for items bought on line or during a visit from a trader to the consumer’s home, allowing time for the consumer to be able to change their mind, cancel the order, return the goods and get their money back. [43]
REPAIRS, REPLACEMENT, AND GUARANTEES: A particular standard set of remedies would be made available to consumers by the proposed directive in respect of a faulty product (i.e. repair or replacement in the first place, followed by the reduction of the price or the reimbursement of money). In the event that a good is defective, the consumer would have the right to have it replaced or repaired within two years from the purchase or their money back. [44]
UNFAIR CONTRACT TERMS: The proposed Directive would introduce a new list of unfair contract terms called the black list [45] to be prohibited across the EU. [46]
• Online auctions – Auctions (including e-auctions) would be required by the directive to meet standard information obligations [47] (new) – price, geographical address of trader, delivery costs etc - but exempting auctions from the right of withdrawal, due to the nature of the auction bidding process.
• Pressure Selling – A broader new definition of direct selling contracts and other steps to close loopholes would be imposed by the proposed Directive. [48] Due to the high number a high number of consumer complaints, the protection against pressure selling will be tightened up on several fronts. First, the definition of what is covered by consumer protection rules is made much wider. The definition of "off-premises contract" is broadened to avoid, as is the case at present, a large number of off- premises contracts falling outside the scope of the Doorstep Selling Directive. Pressure selling in the street, or at home parties, will now be covered. [49]
Most importantly, there would be an extension of consumer protection to cover solicited visits which consumers will benefit from, which had been causing a high number of complaints. Facilitation of online supermarket sales with home delivery, and solicited craftsmen services, by clearly exempting them from the right of withdrawal. Is intended by the new rules [50]
Consumer protection directives, definition of terms, legal regimes, differ in each countries, so does the protections vary. Big business responded by setting up shop in other member states while small and medium businesses remained within their National boundaries because of the high cost of complying with different national laws. With full harmonization in place, there is certainty for a consumer is in the UK that his rights are the same if he buys a product on – line at a distance from Germany or another member state. There is also greater certainty for the consumer and the trader across border. There would be a reduction in compliance cost [51]
All Answers ltd, 'The distance selling directive applies to any consumer distance' (Lawteacher.net, December 2018) <https://www.lawteacher.net/free-law-essays/commercial-law/the-distance-selling-directive-applies-to-any-consumer-distance-contract-commercial-law-essay.php?vref=1> accessed 11 December 2018
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