Background knowledge

What

means

Distance selling?

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E-Commerce

Online retail has been experiencing an unprecedented boom for years. Every day, millions of consumers shop online without meeting the seller in person or holding the goods in their hands beforehand. This type of trade is legally referred to as distance selling and is subject to special legal regulations that ensure consumer protection and clear obligations for retailers.

What is a distance contract?

A distance contract is a contract between an entrepreneur and a consumer that is concluded exclusively using means of distance communication. This can take place via a web store, an app, email, telephone or messenger, for example. The contract is concluded within a sales system organized for distance selling, such as a traditional online store, platforms or subscription channels. The decisive factor is that no personal contact is possible on site from the offer to the order. Everything takes place “at a distance”.

Typical examples of this are Purchase in the webshop, digital subscriptions, conclusion of a contract by telephone with subsequent e-mail confirmation. Click & collect remains distance selling if ordered online and only collected in-store.

There is no distance selling if the contract is not concluded within the framework of a system geared towards distance selling (e.g. a one-off e-mail exchange with a tradesman without an “online sales system”) or if the contract is not concluded exclusively using means of distance communication, but at least in part through personal contact.

Important exceptions to distance selling law

The law recognizes contracts to which the distance selling rules do not apply. These include, for example, certain financial and insurance services, notarial contracts or special delivery constellations. In practice, it is crucial to check whether the specific type of contract falls under the distance selling regulations.

Obligations of the retailer in e-commerce (distance selling)

Retailers must provide the consumer with comprehensive information before and when the contract is concluded online. This includes, among other things:

• Identity and contact details, key product features, total price including taxes and shipping costs, delivery and payment terms, delivery time, warranty, right of withdrawal including a sample withdrawal form and the costs of return in the event of withdrawal. This information must be provided clearly and comprehensibly – and confirmed to the consumer on a durable medium (e.g. email).
• Button solution: The final order button must clearly and legibly indicate the obligation to pay (e.g. “order with obligation to pay” or an equally clear formulation). If this information is missing, the contract with consumers is generally not effective.
• Order confirmation: After ordering, a confirmation with the mandatory information must be provided (e.g. by e-mail).
• Digital content & goods with digital elements: Additional information and update obligations apply to downloads/streams and “smart” products.

Right of withdrawal in distance selling: 14 days – and the most important consequences

Principle: Consumers can withdraw from a distance contract within 14 days – without giving reasons. In the case of goods, the period generally begins upon receipt of the goods (in the case of partial deliveries, upon receipt of the last goods); in the case of services/digital content, the period generally begins upon conclusion of the contract. If the customer is not properly informed, the possibility of withdrawal is extended to up to 12 months + 14 days.

Reversal after revocation:

• Refund of payment: Merchants must refund payments within 14 days; however, they may withhold the refund until receipt of the goods or proof of shipment.
• Return costs: In principle, the retailer can agree that the consumer bears the direct return costs – but only if this has been clearly communicated in advance. Otherwise, the retailer bears the costs. Return costs are always borne by the seller.
• Loss of value: Consumers must pay compensation for use that goes beyond testing the condition/function (typical: clear signs of use), provided that proper instructions have been given.

Digital content (downloads/streams): The right of withdrawal expires if the consumer expressly agrees that the trader begins execution before the expiry of the 14 days and confirms that he is aware of the loss of the right of withdrawal; the trader must provide this confirmation on a durable medium.

Exceptions to the right of withdrawal – the most important cases

In particular, there is no right of withdrawal for:

• Goods according to customer specifications or clearly personalized products;
• Perishable goods;
• Sealed hygiene or health articles if the seal has been removed;
• Time-based leisure services (e.g. event tickets for a specific date);
• Newspapers/magazines (with exceptions for subscriptions);

B2C vs. B2B: Does this also apply between companies?

A contract between two entrepreneurs is not a distance contract. Entrepreneurs therefore have no statutory right of withdrawal in distance selling.

Practical checklist for retailers (e-commerce)

• Product page & checkout: Mandatory information complete, transparent, easy to understand.
• Button solution: “Order with obligation to pay” or equivalent clear wording; no distracting additions.
• Cancellation policy incl. sample cancellation form and clarification on return costs.
• Digital content/updates: correct consent/information texts, update obligations at a glance.

Our team

on distance selling law

 

Clemens Pfitzer

 

Dr. Markus Wekwerth

 

Helene Klassen-Rock