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09 April 2019

Austria: What does "limited space" mean under the Act on Distance Contracts and Off-Premises Contracts?

Directive 2011/83/EU of 25 October 2011 on consumer rights (the "Directive") and the Fern- und Auswärtsgeschäfte-Gesetz (the "FAGG") impose many information obligations on traders before the consumer is bound by a distance or off-premises contract, or any corresponding offer.

Among other things, the trader must inform the consumer where the right of withdrawal exists, the conditions, time limit and procedures for exercising that right, including a model withdrawal form.

However, if the contract is concluded remotely in a manner only allowing for "limited space" or "limited time" to display the information, the trader must comply only with a limited set of information requirements, such as the main characteristics of the goods or services, the identity of the trader, the total price, the right of withdrawal, the duration of the contract and, if the contract is of indefinite duration, the conditions for terminating the contract. The trader shall provide the other information to the consumer in an appropriate way, for instance via a link to its webpage.

Neither the Directive nor FAGG define "limited space" or "limited time". In January 2019, the Court of Justice of the European Union ("CJEU") provided guidance on the meaning of "limited space" (C-430/17).

1. Background of the case

A German company (the "Company") distributed a six-page (each 19 x 23.7 cm) advertising leaflet inserted in various newspapers and magazines. The leaflet contained a purchase order in the form of a detachable mail order coupon. On the front and back of the mail order the Company printed the information on the right of withdrawal and its telephone number, fax number, internet address and postal address. However, the conditions, time limit and procedure for exercising the withdrawal right as well as the model withdrawal form could only be found on the website and not on the mail order coupon, and therefore an association in Germany, whose mission is to combat unfair trade practices, has filed a petition.

The Company defended itself by citing a regulation under which it was only obliged to provide the so-called minimum requirements because of limited space. According to the Directive, this was the "right of withdrawal" and not more. This case was brought before the Federal Court of Justice (Bundesgerichtshof), Germany's highest court, which decided to seek guidance from the CJEU on the exact meaning of "limited space" and on the scope of the obligation to provide information on the right of withdrawal within the Directive.

2. Outcome

The outcome is both good and bad news for traders:

  • The assessment of whether, in a specific case, the means of communication allows "limited space" or "limited time" to display the information must be determined on the specific means of distance communication and not on the choices made by the trader regarding the development and use of that space and time;
  • If the contract is concluded through a means of distance communication which allows limited space or time to display the information, the trader is still obliged to provide not only the right of withdrawal but also the conditions, time limit and procedure for exercising that right. However, the trader is not obliged to also provide the model withdrawal form.

The decision brings clarity to the extent that the CJEU has confirmed that the assessment of whether limited space or limited time is available to present the information is measured against objective criteria. In practice, companies must take into account that the trader must also inform the consumer in such cases about the conditions, time limit and procedures for exercising the right of withdrawal.

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Further reading:
Austria: New unified cancellation right for insurance contracts brings legal certainty