The European Parliament adopted Directive 2011/83/EU, on consumer rights (hereinafter the “Directive”) on 25 October 2011. This Directive reinforces the rights of consumers, especially in relation to their right to information from entrepreneurs and the right to withdraw from a contract. These enhanced consumer rights give rise to new obligations for entrepreneurs (businesses).

The deadline for the transposition of the Directive (the adoption of the act which brings Czech legislation into line with the Directive) expired on 23 December 2013, whereby these laws must come into effect by no later than 13 June 2014. The Directive was transposed by Act No. 89/2012 Coll., the Civil Code (hereinafter “NCC”), which came into effect on 1 January 2014.

a)      Obligation to inform

The Directive, and by extension the NCC, introduce completely new obligations for entrepreneurs. Most often, these obligations relate to the scope of information entrepreneurs must provide consumers prior to the conclusion of a contract, when this contract is concluded by means of distance communication (internet, telephone, etc.) or off the entrepreneur’s business premises (door-to-door, street sales, on excursions, etc.). In particular, the entrepreneur must newly provide the consumer with the following information:

• The total price of the goods or service, or the manner of its calculation, inclusive of all taxes and fees; if the entrepreneur fails to inform the consumer of any taxes or fees prior to the conclusion of a contract, the consumer is not obliged to pay these costs
• The conditions, time limit and procedures for exercising the right to withdraw from the contract
• A form for withdrawing from the contract (although the consumer is not obliged to use this form)
• Information that, in case of withdrawal from the contract, the consumer will be liable to pay the costs of returning the goods (otherwise this is borne by the entrepreneur)
• Information on the existence, manner and conditions for out-of-court settlement of consumer complaints, including the option of contacting state supervisory authorities
• The costs of delivery, and where these costs cannot be determined in advance, the fact that such additional charges may be payable
• Information on rights arising from defective performance, rights under warranty and other conditions for exercising these rights

When concluding a contract by electronic means, the entrepreneur must also provide the consumer with the following information:

• Whether the concluded contract will be kept with the entrepreneur and whether the consumer will have access to the contract
• Information on the languages in which the contract can be concluded
• Information on individual technical steps leading to the conclusion of the contract
• Information on the detection and correction of errors made on entering data prior to submitting an order
• Information on codes of conduct that are binding for the entrepreneur or with which it complies voluntarily and their accessibility by electronic means 

Please note that the above list does not include all information entrepreneurs are required to provide by law, but is only an indicative list of the most important changes.

The actual contract concluded with the consumer must include all the information provided to the consumer prior to its conclusion, i.e. including, but not limited to, the information listed above. The entrepreneur is also obliged to provide the consumer with at least one copy of the contract and the wording of its general business terms and conditions (it will therefore no longer suffice to provide a hyperlink to these terms and conditions).

b)     Withdrawal from the contract 

Several important changes have also been made in provisions governing withdrawal from the contract. The consumer may still withdraw from a distance contract, without giving any reason, within 14 days of the receipt of goods. However, in cases where the entrepreneur does not inform the consumer of the ability to withdraw from the contract, this period is extended by one year. If the entrepreneur subsequently informs the consumer of the ability to withdraw from the contract during this extended period, the period for withdrawal from the contract is reduced to 14 days from the date of this subsequent notice.

The NCC also newly regulates the procedure for returning goods or the price paid for these goods. The consumer must send received goods back to the entrepreneur within 14 days of withdrawing from the contract.

The entrepreneur must return all money received to the consumer (including any transport costs) within 14 days of withdrawal from the contract. However, it is not obliged to return these funds prior to the return of goods by the consumer, or proof that the goods have already been sent.

c)      Conclusion

It is clear from the above that much greater demands on the provision of information are now placed on entrepreneurs than under previously effective regulations. What’s more, in case of doubt whether or not information was provided to the consumer, the burden of proof falls to the entrepreneur. It can therefore only be recommended that this information be provided in a clear and demonstrable manner that allows no doubt.

The price of goods, in particular, should always be shown inclusive of all taxes and fees, otherwise the entrepreneur faces the risk these costs will not be paid by the consumer and will have to be borne by the entrepreneur.

Furthermore, the entrepreneur should always ensure the consumer is duly informed of the ability to withdraw from the contract within 14 days, as in the opposite case, the consumer has the right to withdraw from the contract, without giving any reason, for a period of one year and 14 days, which gives rise to significant uncertainty in the contractual relationship between the consumer and the entrepreneur.

It is also essential to comply with set periods for the return of money paid, and to return this inclusive of any transport costs, otherwise the entrepreneur faces the risk associated with default.

For more information, please contact K&A partner, Mgr. Jiří Kučera, e-mail: jkucera@kuceralegal.cz; tel.: +420604242241.