Rules Regarding Distance Selling Contracts

A distance contract is an agreement for the provision of goods and services made between a supplier on the one hand and a consumer on the other under an organized distance sales scheme. The supplier and consumer do not meet face to face under distance selling contracts before the contract is concluded, and therefore consumers cannot actually see the specific goods or services to be provided.

Under distance selling contracts, the supplier uses a means of distance communication such as via the internet at all stages in the formation of the contract. Other means of distance communications include e-mail, mail order, post and telephone sales.

The Distance Selling Directive binding on all European Union states, once incorporated into domestic legislation aims to protect consumers against the risks involved in distance and e-commerce selling. The terms of the Directive will not apply however, where the contract is concluded between seller and consumer face to face. The Directive will bind suppliers of goods and services who act in a professional or business capacity. Consumers are defined as persons acting outside their trade or business.

The Distance Selling Directive does not apply to certain contracts, such as financial services agreements, contracts for the sale of land, contracts involving perishable items and involving accommodation and transport.

The Directive states that before concluding a distance contract, the supplier must provide information details of his identity, address, the nature of the goods and services, their price and delivery costs, if applicable. The information must be given clearly to the consumer, or in the case of e-commerce contracts should be displayed on the supplier’s website. The supplier is also obliged to provide written confirmation of the above terms and information concerning the contract between the parties in good time. This can be effected through a confirmation e-mail sent by the supplier to the consumer.

The parties are free to agree the time period for performance of the distance contract, though if no date is specified, under the Directive the supplier must perform the contract within thirty days of the date of the order.

The Directive allows consumers the right to withdraw from a distance contract without giving a reason, and gives the consumer a right to be reimbursed within seven working days of making the contract. However, the right to cancel the agreement is lost once the supplier begins to perform the contract with the consumer’s consent.

The Directive prohibits the supply of unsolicited goods and services to consumers without them being ordered by the consumer. The Directive further legislates for unsolicited phone calling by businesses to consumers (known as cold calling), but only with the consumers consent, and subject to certain limitations.

The Distance Selling Directive has been successful in providing consumers with a level of protection in the area of internet and mail order selling, with the right to cancel contracts, and the standardisation of contract law across the European Union has resulted in uniformity and certainty in business dealings across states