Czech Republic: Top ten most common mistakes in terms & conditions for e-shops (not only) in the time of coronavirus

07 May 2020 | newsletters

Entrepreneurs that have so far sold only in bricks and mortar shops could find themselves in an unpleasant situation due to measures against the spread of COVID-19 introduced by the Czech government. Many of them have therefore started selling online. This option will certainly be advantageous for all entrepreneurs in the future. But many entrepreneurs, new or old, are committing the same mistakes when creating terms & conditions for the proper operation of the e-shop.

Necessary communication and instructions

The Civil Code lists what the entrepreneur ought to communicate to the consumer before concluding a contract. These include the conditions, time limit and procedures for exercising the right to withdraw from the contract within 14 days, i.e. the so-called "withdrawal clause". Entrepreneurs do not typically make mistakes here, even though there are still entrepreneurs that do not incorporate the information and instructions required by law into their terms & conditions.

In this connection, the consumer must also be provided with a standard withdrawal form listed in the annex to Government Decree No. 363/2013 Coll. However, in the absence of such instruction in the terms & conditions, the 14-day period will be extended by one year.

Withdrawal from the contract

The consumer can withdraw from the contract within 14 days of delivery of the goods. The consumer is obliged to return the goods to the entrepreneur no later than 14 days after the withdrawal from the contract. The period for returning goods in the context of withdrawal therefore commences from the moment when the withdrawal takes effect and not – as is sometimes wrongly stated in the terms & conditions – from the delivery of the goods.

Costs of returning the goods

Also, the right of withdrawal relates to the question of the costs of returning the goods. The entrepreneur must inform the consumer that if it withdraws from the contract, the entrepreneurs will bear the costs of returning the goods. If it fails to do so, the consumer will be entitled to a refund. In practice, an increasing number of entrepreneurs assume these costs and undertake to pay them on behalf of consumers, but this is not their legal obligation. However, if the entrepreneur undertakes to bear the costs associated with the return of the goods through the terms & conditions (or otherwise, for example by listing on the seller's website), this becomes its contractual obligation, which the consumer can enforce.

Returning the goods

In addition, the consumer is obliged to return the goods, but does not have to return the packaging. The right of withdrawal is intended to enable the consumer to assess the nature and characteristics of the goods to the same extent as is customary when concluding a contract directly in a bricks and mortar shop, i.e. without packaging. We often encounter terms & conditions which explicitly state that the consumer should return the goods in the original packaging, otherwise they will not be accepted. However, such provisions are incorrect and should not be taken into account. Of course, the situation is different if the packaging would also be part of the purchase contract or if without it the value of the goods would be reduced, for example in the case of gift packaging or collector's editions. Here it is necessary to return the goods with the packaging.

Returning the money

The entrepreneur will return the money to the consumer, including the delivery costs that it received from the consumer under the contract, in the same manner and without undue delay, at the latest within 14 days of the withdrawal. If the consumer has chosen a method other than the least expensive method of delivery of goods offered by the entrepreneur, the entrepreneur will reimburse the consumer the cost of delivering the goods in the amount corresponding to the least expensive delivery method offered. However, the entrepreneur is not obliged to return the money received before the consumer hands over the goods or proves that they have sent them. According to the results of inspections by the Czech Trade Inspection Authority, operators of some e-shops sometimes do not return the money to the consumer in time upon withdrawal from the contract.

What cannot be returned

The consumer's ability to return goods and services is not unlimited. There are several exceptions where the consumer cannot withdraw from the contract and thus return the goods and/or services. This is good to keep in mind when launching an e-shop, as it can be of benefit to many entrepreneurs. For example, a consumer cannot withdraw from a contract for goods that have been adapted according to their wishes, such as leather products engraved with a monogram, and it is therefore impossible for these goods to be sold to another customer.
Furthermore, a consumer cannot withdraw from a contract for delivery of a perishable good. This provision is aimed not only at food but also at medicines and flowers.
On the contrary, if the goods ordered from the existing offer on the e-shop have yet to be produced for the consumer, but the consumer does not interfere in its final form, but only chooses the colour, size, etc., the right to return the goods cannot be denied.

Gifts to goods

Sometimes entrepreneurs give consumers a gift together with the purchased goods. The consumer then exercises their right of withdrawal but retains the gift. To prevent this, we recommend that entrepreneurs conclude a so-called contract of donation with a resolutive condition (in the terms & conditions). In this case, the terms & conditions must state that if the consumer withdraws from the contract the contract of donation will expire and the consumer must return the gift together with the goods.

Complaint procedure

Terms & conditions often contain incorrect or incomplete information concerning the consumer's right to make a complaint in the event of defective performance, i.e. if defective goods are provided. Depending on the nature of the defect, the consumer is entitled to exchange the goods for new ones, to eliminate the defect (repair), to reduce the purchase price or to withdraw from the contract. This right must be distinguished from the right of withdrawal described in point 2 above. The consumer has the right to make a complaint only in the event of defective performance. The consumer always has the right to withdraw from the contract when purchasing goods through the e-shop within 14 days of delivery of the goods.

Alternative dispute resolution

Other frequent breaches by entrepreneurs include the absence of information in the terms & conditions about alternative dispute resolutions imposed by the Consumer Protection Act.
If a dispute arises between the buyer and the seller that could not be resolved by agreement, the buyer has the right to alternative dispute resolution through the Czech Trade Inspection Authority or another competent authority. The consumer can also initiate alternative dispute resolution through the ODR platform.

 Personal data processing

Common mistakes of entrepreneurs include superfluously requesting consent to personal data processing, failing to meet the conditions for obtaining valid consent or inconsistently performing information obligations. Other problems are correctly setting cookies and keeping documentation for personal data processing.v