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Why is it important to check your terms and conditions carefully?
Theterms and conditions are a document that every e-shop must have readily available on its website. They do not constitute the actual purchase contract – this is concluded in the e-shop by ordering the goods and then confirming receipt of the order. In order for the purchase contract to be valid, it is sufficient to identify the parties, the goods and to set the price. For the sake of brevity, it is necessary to supplement it with general terms and conditions.
These fulfil a number of information obligations that businesses have by law towards their customers (consumers) and may also cover other important aspects:
- how individual contracts are concluded,
- payment terms and the way prices are set,
- delivery times,
- liability for damage, warranty, liability for defects,
- quality and workmanship of goods,
- right of withdrawal,
- complaints procedure,
- protection of personal data
- and other mandatory information provided for by law. The law also stipulates that all information in the terms and conditions must be 100% true and unambiguous.
All the above mentioned points will vary with respect to the specifics and diversity of your business. For this reason alone, it is clear that the model terms and conditions will not be sufficient for an e-shop. But unfortunately, they are the most common mistake we encounter in practice.
Mistake number 1: Using model terms and conditions and copying
The aim of general terms and conditions for an e-shop should be to ensure that they provide the best possible legal position for you, as the seller, while maintaining statutory consumer protection. It is logical that each business will have different specific requirements that you will not find in the model terms and conditions. In practice, we have seen that many anonymous model terms and conditions also contain unlawful provisions and do not take into account all the mandatory requirements of the amended laws.
Many start-up e-shops or companies choose the strategy of copying terms and conditions from their competitor. However, they neglect the fact that the terms and conditions are not suited to their case, which may differ in detail. This often leads to mistakes. In addition, the competitor who wrote the terms and conditions may challenge their use and thus harm the start-up e-shop marketing-wise.
Mistake number 2: Terms and conditions contain provisions that are contrary to consumer protection
It is not an exception that e-shops often add invalid or prohibited information to their terms and conditions that curtail consumers’ rights. For example, if you made it difficult to withdraw from a contract by means of a penalty in the terms and conditions, this would be a breach of the law and the provision would not apply even if the customer agreed to the terms and conditions. In addition, you could easily get into considerable trouble with the Czech Trade Inspection Authority.
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Mistake number 3: Uncertainty about withdrawal
The fact that consumers have the right to withdraw from an off-premises (i.e. most often online) contract within 14 days without giving a reason is a well-known fact that perhaps does not need to be repeated. However, you should also beware here – if you do not inform the consumer of this right in the general terms and conditions , the deadline is extended by one year.
The withdrawal period generally starts from the date of conclusion of the contract, but in the case of sales contracts it is only from the date of receipt of the goods. In cases where there are several types of goods or the delivery of several parts, then the 2 weeks for withdrawal starts from the receipt of the last delivery. The situation is different when the consumer is sent repeated deliveries of goods (for example, cosmetics). There, we date the possibility of withdrawal from the delivery of the first delivery.
Tip: The 14-day deadline applies to the sending of the withdrawal, not the delivery.
Consumers must be provided with a withdrawal form, but they are not obliged to use it, nor can they be required to do so in the terms and conditions.
Mistake number 4: Differences in terms and conditions regarding the return of goods
Here, the consumer is obliged to send the goods back no later than 14 days after withdrawal. Let’s debunk the myths we often encounter about returning goods in terms and conditions:
- The consumer cannot be required to return the packaging in which the goods were packed. Exceptions are situations where the packaging was part of the contract of sale or would have diminished in value without it – for example, collector’s editions or gift wrapping.
- The consumer cannot be required to pay the costs of repackaging the goods for resale.
- The return of goods cannot be conditional on non-use, as the 14-day period is intended to allow the consumer to familiarise himself with the nature, characteristics and functionality of the goods.
- The consumer may only be required to pay compensation for the diminished value of the goods if he has treated the goods without regard to their characteristics and nature. However, if, for example, the shirt was worn and washed as instructed, compensation for diminution in value cannot be claimed.
Tip: If you manufacture or sell customised goods, be sure to mention the impossibility of returns in the terms and conditions.
Be sure to include the specific terms of withdrawal in the terms and conditions, and be sure to add that the costs of returning the goods are the responsibility of the consumer. Otherwise, he has the right to demand them from you. All monies (including the cost of delivering the goods to the customer) must be returned to the consumer within 14 days of the date of withdrawal. The money must be returned in the same way it was received.
What goods cannot be returned
There are a few exceptions where the consumer cannot withdraw from the contract. This is also something to bear in mind when drawing up general terms and conditions. The consumer cannot return goods that have been made to order (for example, monogramming on clothing) or that are perishable (medicines, flowers, food). It is a different matter if the consumer chooses from an existing range of goods that are yet to be manufactured but do not interfere with the final design or undergo any customisation – such goods can be returned.
Mistake number 5: What about returns in e-commerce terms and conditions?
In the general terms and conditions for e-shops, you must inform your customers about the possibilities and methods of claiming goods – i.e. include a complaints procedure. Consumers have the right to make a claim if the defect occurs within 24 months of receipt. Customers can make a claim by phone, email, in writing or by sending a claim form. What they can claim depends on the type of defect:
- removable defect – free repair, delivery of a new item without defects, discount,
- irremediable defect – delivery of a new item without defects, discount, right to withdraw from the contract.
What is important to remember about claims in the terms and conditions?
- It is up to the customer to decide how to resolve the complaint, but the solution must be appropriate to the type of defect and the situation.
- You must inform the customer of the acceptance of the claim within a maximum of 3 working days.
- You must deal with the complaint (for example, including repair) within 30 days of the complaint.
- If you need more time, you must agree with the customer. This is most often the case, for example, when sending goods to suppliers for assessment. The customer should always agree to a longer period of time for dealing with the claim.
In practice, however, it is a good idea to deal with the matter in a tailored way and perhaps find ways to avoid complicated rules from the point of view of the business.
Mistake number 6: Insufficient information about the goods
This point will particularly concern those selling alcohol or tobacco products, for example. In the case of tobacco products, which also include electronic cigarettes, vaporisers and other smoking aids, it is necessary to equip the e-shop with a system that electronically verifies the age of the consumer. For e-shops selling alcohol, an age verification system is not necessary, but the sale of alcohol to persons under 18 must still be excluded.
Tip: Don’t forget that you must also inform people under the age of 18 about the prohibition on selling alcohol in the GTC.
In practice, we have encountered that an e-shop offered alcohol as part of a promotion even though it did not have a business license to do so. This is also considered as a major misconduct, which can be fined by the CTIA in the amount of hundreds of thousands.
Error number 7: Omission of out-of-court dispute resolution in the GTC
In practice, we often see that businesses lack information in their terms and conditions regarding out-of-court dispute resolution, which is required by the Consumer Protection Act. Make sure that you inform the customer clearly and comprehensibly about the consumer dispute resolution body that is materially competent for the type of product or service.
Remember that the terms and conditions should also include the internet address of this body.
For example, the CTIA recommends the following wording
In the event that a consumer dispute arises between us and the consumer under a contract of sale or a contract for the provision of services, which cannot be resolved by mutual agreement, the consumer may submit a proposal for out-of-court settlement of such a dispute to the designated body for the out-of-court settlement of consumer disputes, which is:
Czech Trade Inspection Authority
Central Inspectorate – ADR Department
Štěpánská 15, Prague 2, 120 00
Error number 8: Insufficient information about GDPR in the GTC
In any case,be sure to inform your customers about how you process their personal data. However, after the introduction of the so-called GDPR regulation, it is better to deal with this part outside the terms and conditions, i.e. to dedicate a separate place on the e-shop or website. We have discussed the most important requirements of the regulation on the protection of personal data of natural persons in a separate article.
Mistake number 9: Making changes to the general terms and conditions for e-shops
If you are going to change the general terms and conditions, we recommend that you inform your customers at least a few weeks in advance. The way you do this should be stated directly in the terms and conditions (for example, by putting it in the news section of the website). Be sure to put the date from which they apply at the end of the terms and conditions to avoid any unpleasant situations with customers or the Czech Trade Inspection Authority.
Tip: Keep in mind that if the change is made, the customer has the option to opt out of the new rules and cancel the contract.
Summary at the end – learn from the mistakes in the terms and conditions
- Don’t download someone else’s terms and conditions that don’t fit your situation. With poorly drafted or missing terms and conditions, you run the risk of your actions being seen as unfair practice and deliberately misleading the consumer, resulting in hefty fines.
- In any event, terms and conditions should be clear to consumers.
- Make sure that the GTC do not lack information about the operator, the possibility of withdrawing from the contract, the time limit, the conditions and procedures for exercising the right of withdrawal, the terms of complaint, information on the costs associated with the return of goods and the out-of-court settlement of complaints.