The distance contract – can the customer always withdraw from the contract?

You run an online store and wonder if your client has the right to withdraw from the sales contract in every situation? What is the significance in this respect whether your client is an entrepreneur or a non-business person? These questions will be answered in today's article by attorney-at-law Sandra Mościcka-Wójciak, co-author of the blog www.legalniewbiznesie.pl.

Enjoy your reading!

Sales contracts concluded with an online store are so-called distance contracts. The rules and procedure of concluding such contracts with the consumer have been regulated in the Consumer Rights Act of May 30, 2014.

At the very beginning, one should answer the question of who the consumer is? The definition of the consumer can be found in art. 22(1) of the Civil Code. According to it, a consumer is a natural person who performs with an entrepreneur a legal act not related directly to its business or professional activity.

Examples are the best way to explain it. For example, if you run an online store with furniture and a natural person running a business orders furniture from you, which is part of their company's furnishing, then in such a transaction the person will not be a consumer. Thus, the provisions of the Consumer Rights Act are not applied to it. If, however, the same person purchases furniture in your shop, for their own use, e.g. for their apartment, while not asking for an invoice "for a company", then in such a situation they will be a consumer because they perform activities not directly related to their business. And the provisions of the Consumer Rights Act will apply to this transaction.

However, let's focus first of all on distance contracts with consumers. What is the possibility of withdrawing from a contract concluded by the consumer? What are the consequences of withdrawal from the contract? Is it always possible for a consumer to withdraw from such a contract?

When can a consumer withdraw from a distance or off-premises contract and in what period the right is due to him?

According to art. 27 of the Consumer Rights Act, a consumer who has concluded a contract at a distance or away from business premises, has the right to withdraw from such a contract within 14 days without giving a reason and at no cost, except for the costs specified in the Act.

When withdrawing from the contract, the consumer must submit a declaration of withdrawal to the entrepreneur. In order for the withdrawal period to be retained, it is enough to send the declaration to the entrepreneur before its expiry.

What is the initial date when the 14 days period starts? It depends on the contract that the consumer conсludes. If the object of the contract is a one-time delivery, e.g. computer equipment, the start of the 14 day period should be counted from the date of receipt of this equipment from the courier or postman. If, however, the consumer ordered a furniture set to be delivered in parts, the deadline for withdrawal from the contract is counted from the date of the last set part receipt. In the situation of regular delivery for a specified period of time, e.g. an annual subscription of a monthly magazine, this period starts from the delivery of the magazine’s first edition. In the case of other contracts, e.g. the provision of services, this period is counted from the date of contract conclusion.

It is also very important that the consumer is informed about the right to withdraw from the contract, the method and time limit for its performance. The entrepreneur is also obliged to provide the consumer with a withdrawal form template with the content specified in the Act.

What are the consequences of not informing the consumer about this right?

If the entrepreneur does not inform the consumer about the right to withdraw from the contract, this right expires after 12 months from the date of expiry of the deadline. If the entrepreneur forgets to inform the consumer about this right but would like to perform, then the deadline to withdraw from the contract expires after 14 days from providing the consumer with information about this right.

What are the consequences of withdrawing from a distance contract or a contract concluded away from the business premises?

In the event of withdrawal from a distance contract or a contract concluded outside the business premises, the contract shall be deemed not concluded. The entrepreneur is obliged to immediately (no later than within 14 days from the date of receipt of the consumer's declaration of withdrawal from the contract) return the consumer all payments made by him, including the cost of delivering the goods. On the other hand, the consumer is obliged to return the item he bought immediately, but not later than 14 days from the date on which he has withdrawn from the contract unless the entrepreneur suggested that he would pick up the item himself. To meet the deadline, it is enough to send back the items before its expiry.

Can the consumer always withdraw from a distance contract on such terms?

Among distance and off-premises contracts, there are contracts for which the right of withdrawal is not available. Article 38 of the Consumer Rights Act indicates 13 contracts, from which the consumer has no right to withdraw. Not all of them, of course, will apply to online stores, but it is worth pointing out all these exceptions.

They are:

1. contract for the provision of services, if the entrepreneur has performed the service fully with the explicit consent of the consumer who was informed before the service begins that after the entrepreneur has fulfilled the provision the consumer will lose the right to withdraw from the contract, for example, the text translation. The right to withdraw from this type of contract is not granted to the consumer only if the entrepreneur informs him about it, for example, on his website and receives from the consumer explicit consent to the performance before the end of the right to withdraw from the contract, for example by placing a checkbox with appropriate content under the order form;
2. contract in which the price or salary depends on the fluctuations on the financial market over which the entrepreneur has no control, and which may occur before the deadline to withdraw from the contract, e.g. currency purchase in an online currency exchange - for an entrepreneur running an online currency exchanger such a contract could be very disadvantageous, because due to exchange rate fluctuations, the amount that would have to be paid to the consumer could significantly differ from the price he paid for the currency in question;
3. contract in which the subject of the service is a non-prefabricated item, manufactured according to the consumer's specification or a servant to satisfy his individual needs, e.g. a tailor-made suit, furniture made according to dimensions and with materials selected by the customer, jewelry with engraving. Often internet sellers erroneously refuse consumers the right to withdraw from the contract if the subject of the contract is individually imported for the customer, e.g. from a warehouse, but it is not an above-standard product, manufactured according to the specific requirements of the customer. In this situation, the consumer has the right to withdraw from the contract on normal terms;
4. contract in which the object of the service is an item that is a subject to rapid deterioration or has a short shelf life, e.g. food products whose return due to short shelf-life would prevent the seller from selling it further, e.g. vegetables, fruits, dairy products;
5. contract in which the subject of the service is an item delivered in a sealed package, which cannot be returned after opening the packaging due to health protection or hygiene reasons, if the packaging has been opened after delivery, for example, medicines or cosmetics that prevent further resale for hygiene or health reasons;
6. contract in which the subject of the service are things that after delivery, due to their nature, are inseparably connected with other things, e.g. a fuel additive poured into the tank of a car;
7. contract in which the subject of the service are alcoholic beverages, the price of which was agreed at the conclusion of the contract of sale and which delivery may take place only after 30 days and which value depends on market fluctuations that the entrepreneur has no control over, e.g. whiskey or wine, in a situation where there is no possibility before the completion of the production process, to determine how the quality of a given lot or year will affect the price of the good;
8. contract in which the consumer explicitly demanded that the entrepreneur come to him for urgent repair or maintenance; if the entrepreneur provides additional services other than those required by the consumer, or supplies items other than spare parts necessary to perform the repair or maintenance, the right to withdraw from the contract is granted to the consumer in respect of additional services or items, e.g. repair of damaged entrance doors to the apartment. If the entrepreneur making the repair additionally sells other goods and, for example, sells a new intercom to the consumer, the right of withdrawal is already granted on the normal terms with respect to the contract for the sale of the intercom;
9. contract in which the subject of the service are sound or visual recordings or computer software delivered in a sealed package, if the packaging was opened after delivery, e.g. if the protective foil was removed from the computer game packaging - if the consumer had such a right, the seller would not have the guarantee that the consumer has not copied such a computer program before returning it;
10. contract for the supply of newspapers, periodicals or magazines, with the exception of a subscription contract. Like in the case of computer programs, the consumer could read or copy a magazine and return it. The legislator protects the sellers of this type of goods in this case because the most important value of such a product is its content;
11. contract concluded through a public auction, e.g. purchase of an image at the auction house. If the consumer had such a right, he could prevent other auction participants from submitting bids and then withdraw from the contract;
12. contract for the provision of accommodation services, other than for residential purposes, carriage of goods, car rental, catering, leisure services, entertainment, sports or cultural events, if the contract indicates the day or period of service, e.g. purchase of a ticket concert or an accommodation in a hotel room. The right to withdraw from this type of contract is not granted to consumers because after the purchase of such a service, the possibility of using it at the same time by another person, e.g. booking a specific hotel room, is blocked;
13. contract for the supply of digital content that is not recorded on a tangible medium, if the provision began with the consumer's explicit consent before the deadline to withdraw from the contract and after being informed by the entrepreneur about the loss of the right to withdraw from the contract - the possibility of downloading or receiving data streamed to a durable medium, e.g. paid access to an application or website. In order for the consumer not to be entitled to withdraw from this type of contract, it is necessary to inform him about his loss, e.g. on the seller's website and withdrawing from the consumer explicit consent to perform the service before the withdrawal period, e.g. by placing a checkbox under the order form content. If the seller fails to fulfill these obligations, the consumer will be able to withdraw from the contract on normal terms.

The entrepreneur is obliged to inform the consumer about the lack of the right to withdraw from the contract on the basis of art. 38 or circumstances in which the consumer loses the right to withdraw from the contract.

In order for the consumer not to withdraw from the contract, the entrepreneur is obliged to inform him before concluding the contract that he loses the right of withdrawal if he purchases the good or service. Otherwise, the exceptions laid down in the Act will not bind the consumer and he will have the right to withdraw from the contract under normal conditions, although the law generally does not grant him such a right.

In case of doubts whether this information obligation has been met, the entrepreneur must prove that the consumer obtained such information.

Can an entrepreneur withdraw from the contract on the same terms as the consumer?

As it was mentioned at the beginning, the Consumer Rights Act applies only to the consumer, and therefore a natural person who performs a legal transaction with the entrepreneur not directly related with their business or professional activity. Therefore, if a natural person running a business, shops in the online store for the needs of their company, they will not be a consumer and the Consumer Rights Act in such a situation cannot be applied. Which means that the entrepreneur will not be entitled to withdraw from the contract on the terms described above. Likewise, the exemption from the right to withdraw from the contract does not apply to him.

In that case, is there any other legal basis enabling the entrepreneur to withdraw from a distance contract?

Yes, these are the provisions of the Civil Code. An entrepreneur who has concluded a distance contract and wants to return the goods will be able to rely on the general provisions of the Civil Code, providing the seller with liability for defects (provisions of art. 556 – art. 576 of Civil Code) or a guarantee if such was granted.

But! The seller in the online store is responsible if the item sold has a physical or legal defect. This means that the customer-entrepreneur cannot withdraw from the contract without any reason. Only if the item that has been sold has a physical or legal defect, e.g. item does not have a property about which existence the seller assured the buyer, for example by presenting a sample or pattern, the customer-entrepreneur may, subject to certain conditions, terminate the contract. Such a law does not always entitle him right away. According to art. 560(1) of the Civil Code, the buyer may submit a declaration of a price reduction or withdrawal from the contract, unless the seller immediately and without excessive inconvenience to the buyer replace the defective product with a defect-free one or remove the defect. This limitation does not apply if the item has already been replaced or repaired by the seller or the seller has not satisfied the obligation to replace the item for one free from defects or to remove the defect.

In summary, customers of the online store have the option to withdraw from the contract in certain situations. It depends primarily on whether your client is an entrepreneur or a consumer. If your client is a consumer, he does not always have the right of withdrawal. The subject of the contract with the client is important. There are contracts for which the consumer loses his right of withdrawal.

Remember also about the information obligations that must be fulfilled before concluding the contract with the client. Failure to comply with these obligations may have negative consequences for your store, because the customer will, for example, be able to withdraw from the contract, in a situation where in general the law does not grant such a right.