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The new law on distance contracts.

On next 13th June 2014, the new Italian law on consumer rights in off-premises contracts and distance contracts will come into force. Such new regulation has been introduced through Legislative Decree No. 21/2014 which adopted European Directive No. 83/2011/UE.

In this post, we will analyze in depth the regime concerning “distance contracts” that is to say, those contracts “concluded between the trader and the consumer under an organised distance sales or service-provision scheme without the simultaneous physical presence of the trader and the consumer, with the exclusive use of one or more means of distance communication up to and including the time at which the contract” (new article 45.1, lett. g) D.lgs 206/2005). As a result, all contracts concluded by phone or internet will be covered by such definition.

What are the consequences of such new law?

New information requirements

In particular, the following elements shall be specified:

  • the main characteristics of the goods or services;
  • the identity of the trader; the total price of the goods or services (or the manner in which the price is to be calculated) as well as the manner and costs for payment, delivery and performance;
  • the duration of the contract, and/or the conditions for terminating the contract;
  • with reference to digital content, the functionality, including applicable technical protection measures, of digital content as well as any relevant interoperability of such content with hardware and software which is known or expected to be known;
  • the conditions, time, limit and procedure for exercising the right of withdrawal (if applicable) as well as the model withdrawal form set out in the Annex to the Decree;
  • the costs of returning the goods in case the consumer will exercise the right of withdrawal;

 

New formal requirements for distance contracts

The agreement between trader and consumer shall be compliant with following requirements:

  • the compulsory information shall be made available to the consumer in a plain and intelligible language, “in a way appropriate to the means of distance communication used”;
  • if the distance contract to be concluded through electronic means will place the consumer under an obligation to pay, the consumer shall be made aware of compulsory information concerning the identity of the trader, the total price of goods and services, the existence of the right of withdrawal and the duration of the contract before the order is placed
  • with reference to the so-called “point and click” contracts, the button shall bear the label “order with obligation to pay” or a corresponding formulation with the same meaning. If trader breaches such provision, no payment is due by the consumer;
  • the consumer has the right to receive, on a durable medium, a confirmation of the terms and conditions applicable to the contract accepted by him, at least at the time of the delivery or before the performance of the service begins;

New rules for the exercise of the right of withdrawal

The Reform has introduced stricter rules (for trader) with reference to the consumer’s right of withdrawal as follows:

  • The term for exercising the right of withdrawal, without giving any reason, is now set in 14 days (instead of 10 days);
  • If trader has not provided the consumer with the information of the right of withdrawal, the withdrawal period shall expire 12 months after the initial withdrawal period of 14 days;
  • The consumer may exercise his right of withdrawal using the model withdrawal form or making any other unequivocal statement setting out his decision to withdraw from the contract. To this extent, the trader may give the option to the consumer to electronically fill in and submit either the model withdrawal form or the above-mentioned unequivocal statement on the trader’s website;
  • The consumer exercises effectively his right of withdrawal if the communication concerning such exercise is sent by him before the period is expired;
  • When consumer exercises such right of withdrawal, the trader has the obligation to reimburse all payments received by consumer within 14 days from the day on which he has been informed of the consumer’s exercise of the right of withdrawal. In any case, the trader may withhold the reimbursement until reception of the goods back or until the consumer has successfully supplied evidence he has sent back goods (whichever is the earliest)
  • In such cases, the consumer has the obligation to send back goods to the trader (or hand them to a person duly authorized by the trader) within 14 days from the communication of withdrawal;
  • The consumer, however, when exercises the right of withdrawal shall pay to the trader a reasonable amount which shall be in proportion to what has been provided until the time the trader has been informed of the exercise of such right of withdrawal;
  • The right of withdrawal shall be excluded in all cases set forth in article 59 (article 16 of European Directive) and, in particular, in case of: 1) service contracts after the service has been fully performed if the performance has begun with the consumer’s prior express consent, and with the acknowledgement that he will lose his right of withdrawal once the contract has been fully performed by the trader; and 2) the supply of digital content which is not supplied on a tangible medium if the performance has begun with the consumer’s prior express consent and his acknowledgment that he thereby loses his right of withdrawal;

Other consumers’ rights

With reference to distance contracts, in particular to internet contracts, we point out that:

  • If the trader accepts some means of payment (i.e. credit or debit card), he cannot charge the consumer fees that exceed the costs incurred in by the trader himself for the use such means;
  • With reference to additional services, the trader must obtain the express consent of the consumer for any extra payment. As a result, no default options may be used for payment of additional services and an express statement and/or choice of the consumer is required.

As a consequence, e-commerce sites’ Terms & Conditions shall be drafted more carefully, in order to assure that such website are compliant with the so-called new rules.

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This post is also available in: Italian

Roberto Alma

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