The new Consumer Contracts Act provides a number of strict information requirements in relation to the consumer's right of cancellation of 14 days. If the consumer is not provided with the relevant information, this may have serious effect on the agreement.
INSUFFICIENT INFORMATION ON THE RIGHT OF CANCELLATION MAY RESULT IN A 12-MONTHS' RIGHT
If a company concludes an agreement on the Internet with a consumer concerning goods, subscriptions (e.g magazines) or the like, the company must provide information on the right of cancellation:
- (i) prior to the conclusion of the agreement; and
- (ii) on a permanent medium, e.g. an e-mail, within reasonable time after the conclusion of the agreement.
If the company does not meet these requirements, the consumer will have a right of cancellation of 12 months (and not just 14 days).
INSUFFICIENT INFORMATION ON THE RIGHT OF CANCELLATION IS SUBJECT TO FINES
According to the new Act, the company will also be subject to a fine if providing insufficient information on the right of cancellation to the consumer.
This also applies to the delivery of digital content (e.g. VOD or SVOD), but in this connection, it is important to note that it is possible, according to some specific conditions, to waive the consumer's right to cancel such agreements.
CANCELLATION EVEN THOUGH THE GOODS HAVE BEEN USED
The new Act also stipulates a number of detailed conditions as to how the order process must be, and how the consumer is now entitled to cancel the purchase of goods that have already been used.
FAILURE TO OBSERVE PERIODS OF COMMITMENT AND TERMINATION IS SUBJECT TO FINES
Finally, the new Act carries on the rule that continuing subscriptions may only bind the consumer for five months, after which the consumer may terminate the subscription at one month's notice. An important change is that failure to observe the above will also result in fines.