Online Contracts Must Clearly Indicate Payment Obligation, CJEU says
The recent judgment by the Court of Justice of the European Union (CJEU) in Case C-400/22 has provided some assitional clarity on online shopping rules within the EU. This judgment clarifies the requirements for traders to inform consumers of their payment obligations before finalizing an order. This requirement applies even if the consumer’s obligation to pay is contingent on the trader meeting a specific condition specified in the contract.
The case involved a tenant who entered into an online contract with a debt collection agency. The agency was to enforce certain rights the tenant had against a landlord under German law. The tenant would only pay the agency’s fee if the agency successfully enforced the tenant’s rights or transmitted a letter of formal notice to the landlord. However, the button the tenant clicked to place the order did not expressly state that the tenant was committing to pay a fee.
According to the EU Consumer Rights Directive, any button or similar measure that invites a consumer to place an order must clearly mention the consumer’s obligation to pay for the service. If the button is not labeled with an unambiguous formulation indicating that placing the order entails an obligation to pay, the consumer is not bound by the contract. The German court requested the CJEU to consider whether this requirement applied in the Conny case, where the tenant’s obligation to pay was conditional.
The CJEU confirmed that the EU rule applies even when the obligation to pay is contingent on a condition being met. The court ruled that the contract does not bind the tenant if the button does not clearly indicate the obligation to pay. However, the tenant can later decide to make the contract binding upon receiving additional information about the payment obligation.