One of the key documents for any business is a good set of general terms and conditions of sale (general conditions) for your product or service. Here are 3 key things you should consider when drafting general conditions for your business in Europe.
1. Define how the contract is made.
Recommended Contracting process:
- The general conditions should carefully describe the steps on how a contract is formed. This is based on offer and acceptance. For e-commerce in Europe the mechanics of how a contract is formed online must be clearly explained in your website pursuant to the E-Commerce Directive of 2000.
- Your website should be set-up as an 'invitation to treat', this means it invites offers for your product or service.
- The customer should make offers based on your product description and pricing contained in your website or a referenced product documentation. You should ensure that the customer can only make an offer in accordance with your defined process to avoid the customer making counter-offers or introducing new terms.
- You as the seller should send the customer an order confirmation which describes what the customer has ordered, the pricing for it, and any other key terms including a clickable reference to your general conditions. This confirmation however is not an acceptance of the offer.
- The customer's offer should only be accepted (and the contract formed) when you dispatch the product, or the services are commenced, or if it is digital content when the digital content is made available to the customer.
- So, you as seller are not exposed to mistakes on your website where you have the wrong price, wrong quantity or wrong description.
- So, you can decide whether or not to accept the offer depending on how much stock you have or availability you have to provide the services
2. Make sure your general conditions are incorporated in the contract.
If you want to rely on your general terms you need to ensure that they are incorporated in your contract with the customer. To do this I recommend the following:
- Bring the general conditions clearly to the attention of the customer before they click accept or do anything to signify acceptance.
- If you are selling on a website have a link to the general conditions before the buy or order button.
- Make sure the link to your general conditions works on mobile and different browser versions.
- Enable the customer to easily get a copy of your general conditions and download them for future reference.
- Highlight any unusual terms in your general conditions and bring these to your customer's attention. This way you have a better chance that those 'unusual' terms will be enforceable.
3. Consider who is your end customer. Business or Consumer?
- Draft your general conditions with your end customer in mind. In particular adapt your general conditions depending on whether you are selling to businesses or consumers.
- If you are selling to a consumer then they are entitled to protection under European consumer laws. Consumers are considered not to have equal bargaining power with the businesses that sell to them, so consumer protection law attempts to even up the playing field.
- One of the most important protections is for the consumer to be able to return products purchased through an online sale from your website within 14 days of conclusion of the contract (often called a cooling off period) and get a full refund. However, if you have not provided the consumer with certain mandatory information (e.g. your business name and address and how to contact you), then this protection can be extended to 12 months from the conclusion of the contract. The right to return is not applicable for bespoke or made to measure products, or to products that deteriorate or spoil quickly, for example, food.
- Important things to consider when drafting your return policy in the general conditions are:
- Requiring that the product must be returned in its original packaging and in original condition.
- Stipulating that the refund may be delayed until you have evidence from the consumer that the product has been shipped back.
- Stipulating that the consumer bears the cost of returning the products to you (if you don't specify this in advance the seller must pay).
- Stipulating that you can make deductions for wear and tear to packaging.
- Specifying a process for consumers to follow to return goods, often known as 'returned merchandise authorization' or RMA for short.
- For services or digital content, specifying that the consumer can't get a refund if they have used or accessed the service or digital content during the 14 day cooling-off period.
Originally published May 8, 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.