Fundamental changes to consumer business

Austria has implemented the EU Directive on consumer rights (2011/83/EU) with its Law regarding Consumer Rights Directive Implementation (VRUG) on June 13, 2014. The implemented law brings fundamental changes to all consumer businesses. Essential parts of the changes are extensive information obligations and the creation of an – inter alia – time-extended right of withdrawal by the consumers. The implemented law also focuses on the introduction of regulations regarding consumer-related information about complaints on the one hand and regarding regulations to avoid costs of the consumers on the other hand. There are also regulations about so-called contract formations outside the office and via online shops or by telephone of importance. For this purpose Austria implemented another law with regard to special regulations (FAGG).

The key points of the law basically include regulations about the degree of information of the consumer. In connection with the formation of consumer contracts there are new pre-contractual information duties. In absence of the required information (such as contact details of the trader, performance and delivery, as well as information in relation to the essential characteristics of the contractual object) there is no contractual obligation of the consumer. In contrast, the contractor is bound by such a contract.

With regard to the online contract formations, especially using web shops, as well as the accepted payment methods, any restrictions of deliveries have to be part of the pre-contractual information. Regarding the contracts outside the office, the consumer has to be informed on paper about his basic consumer rights, so that the contractor fulfills his information obligations within the meaning of the FAGG. For a distance or an off-premises contract the exchange of information may for example also be made via e-mail. Besides the digital form, the consumer has to be provided with a copy or a confirmation of the printed form. To make e-commerce contracts more consumer-friendly, the payment obligation has to be confirmed by the consumer. For this purpose, may also serve a button on the web shop, which reminds about the fact that the consumer will be liable to pay after the ordering process.[1]

In addition to the provisions concerning the online contracts on the internet, also the contracts made via telephone are an issue. In this context, consumers are now only bound by the contract, if there is a confirmation of the contract registration on a durable medium, such as paper, e-mail or USB stick, and there is a written declaration of accepting the contract by the consumer, also provided on such a durable medium.

The new regulation of the right of withdrawal with regard to the online contracts, contracts by telephone or also the so-called contract formations outside the office is also worth mentioning. The existing right of withdrawal included a period of seven days. With the establishment of the new law, the right of withdrawal now extends to a period of fourteen days. If there is any failure of the contractor to notify the consumer of the right of withdrawal, the withdrawal period extends to one year plus fourteen days[2]. If the consumer takes advantage of his right of withdrawal, there are no particular formalities (even via SMS or e-mail). In case of returning the ordered goods, an additional endorsement stating the declared withdrawal is necessary. Assuming that the consumer has been provided with information about the costs, the costs for returning the ordered goods are to be borne by the consumer. There is no existence of any right of withdrawal for certain types of contracts (eg contracts for social and health services, credit and insurance services, etc), contract formations outside the office with a fee up to € 50,00 and there is also no right of withdrawal in regard to the nature of the ordered goods (for example manufactured goods according to consumer specification, perishable goods, etc).

There is also a serious change for service contracts: If the consumer requests the contractor to begin before the end of the withdrawal period with the execution of the contract, he may nevertheless withdraw the contract. The right of withdrawal is only omitted when the consumer is informed about the elimination of the right of withdrawal by the contractor and the service has been completed. Is the ordered service partly completed, the consumer has – if he has previously been properly informed about the right of withdrawal and the payment obligation – to pay a partial fee.

Apart from the mentioned innovations, there are also provisions relating to the delivery of ordered goods. Here, the contractor shall deliver the ordered goods without undue delay and has to comply with the maximum period of thirty days. This statutory maximum period could be limited if another period of delivery has been agreed on between entrepreneurs and consumers.

If businesses do not adapt to the new rules, they could expect far-reaching consequences. If and when the forms of contract – also regarding any orders – are not in conformity with the new provisions of the VRUG, both administrative as well as unfair competition law sanctions can arise. Serious consequences relate to vice of form, which can lead to invalid contracts or even benefits without entitlement to payment.

Inform yourself which obligations will arise from the future law and how to be best prepared as a company. For questions or further information please do not hesitate to contact us.