Who is a consumer and what is a consumer good?

In this article, we provide guidance on how to safely distinguish between when you are buying as a consumer and when you are buying as a business, and why it matters for complaints and cancellations. Understand the differences between goods, services and digital content. You’ll also learn when and how to use out-of-court dispute resolution with the CTIA.

Consumer vs. entrepreneur:

A consumer is a person who enters into a contract outside the scope of his or her business or profession. This definition is simple but very effective in practice: it is an ordinary buyer who does not go “shopping for work”.

By contrast, an entrepreneur is one who, independently, on his own account and responsibility, consistently carries on an occupation for profit. In addition, the law specifically says that for consumer protection purposes, an entrepreneur is also someone who enters into contracts in connection with his or her business or profession – typically when you are shopping “on an I.T.O.” or purchasing an item for the exercise of a profession.

Why is the difference important? Because the consumer has special protections vis-à-vis the entrepreneur – for example, protection against unfair commercial practices and a range of information rights. There are also significant differences in the scope and regime of legal liability for defects.

Consumer goods vs. services vs. digital content

The term “consumer goods” is not explicitly defined in the law – rather, the law asks whether they are goods sold to consumers and then determines the rules accordingly. For consumer protection purposes, a good is any movable item, including an item that contains a digital element (e.g. a phone with firmware, a smart TV, a robotic vacuum cleaner).

Digital content is data in digital form (apps, computer programs, e-books, music files), and a digital service is a service that enables the creation, processing or storage of data (for example, a cloud or stream). This categorisation is important because we assess conformity to contract differently for goods than for digital content and services, where, in addition, issues such as regularity of delivery and updates are addressed.

Practical examples: food, electronics, cosmetics, licensed software

When you buy groceries in a supermarket, they are goods. The general rules for the sale of goods to consumers apply, but taking into account the nature of the item (food usually has a short shelf life, which affects realistic expectations of durability and performance).

Smart electronics (e.g. phone, laptop, TV) are classic examples of goods with digital elements. In this case, the seller has a duty to ensure that the item is in conformity with the contract and that necessary updates (including security updates) are provided for a reasonable period of time or for the agreed delivery period – otherwise there may be a non-conformity and you may exercise rights under the defective performance (repair, replacement, discount, withdrawal, depending on the nature of the defect).

Licensed software is an example of digital content (e.g. an application or program), even if it is delivered on a carrier – it is legally important that the subject matter is licensed for use and that functionality and updates are expected. In the case of web services or cloud services, it will typically be digital services.

What consumer protection rights do you have

The most well-known privilege is the right to withdraw within 14 days without giving a reason if you are buying remotely (typically in an e-shop) or off-premises (for example, door-to-door sales). The time limit usually runs from receipt of the goods, but exceptions apply (for example, goods in sealed packaging for hygiene reasons after unpacking, or audio/video/software on media after breaking the original seal).

You also have the right to have the goods (or digital content/service) conform to the contract. This means that the item has the agreed characteristics, is fit for its usual purpose and performs as expected. In addition, for digital content/services, it is a matter of whether updates have been provided.

In the case of services (typically repair, installation, cleaning, transportation, but also streaming services, cloud services), it is the performance of the contract that is assessed – i.e. whether the service was provided on time, properly and to the specified quality. In addition, for digital services (stream, cloud) we look at regular access to content and availability of features. If the service drops out or is significantly not as described, you can ask for a correction and only then for a discount or cancellation depending on the nature of the breach.

Czech law also has wider expectations in the form of warranties in the sense of declarations by traders or manufacturers(quality guarantee), which are voluntary but must not narrow your legal rights from defects. Therefore, always distinguish between legal liability for defects (which follows automatically from the Civil Code) and a guarantee as a marketing obligation of the manufacturer.

If you cannot reach an agreement with the trader, contact the Czech Trade Inspection Authority (CTIA). Out-of-court dispute resolution is quicker and less formal than court; the aim is to reach an amicable settlement. You can file a claim online or offline. The CTIA will assess jurisdiction and invite the trader to cooperate. If another authority is competent (e.g. energy, finance, telecommunications), the CTIA will direct you. The deadline for filing an ADR claim is usually within one year from the time you first filed your claim with the trader. ADR is not a substitute for a court, but in many cases it can help you find an agreement or at least clarify your legal position.

When you are not a consumer: buying on an ID number

If you are buying for your business (for example, a laptop for your office or tools for your workshop) you are not a consumer. The law is based on purpose, not on whether you are otherwise an ordinary person: when the purpose of the contract is business, you move into the position of a business. We often see customers mistakenly fill in billing details with an ID number, even if they are buying for the home.

Consequences of poor qualification

If you mistakenly buy with an ID number, the trader may claim that you are not a consumer and refuse to give you, for example, a 14-day cancellation on an e-shop. You may also lose some information that is only obligatory for consumers, and it will be harder for you to seek out-of-court redress from the CTI, as this is specifically for consumer disputes. In practice, this means less bargaining power and a more difficult path to redress. Therefore, it is always more practical to have it clearly stated in the order, contract and communication that it is a personal (non-business) purchase.

Poor qualification can also affect the rules of evidence. In the consumer contract regime, courts often interpret ambiguities in favour of the consumer and more strictly supervise the trader’s information obligations. The rules provide that the consumer must be given key information before entering into a contract. Failure to do so has specific consequences (including an extension of the withdrawal period).

Summary

A consumer is someone who makes purchases outside the course of his business; a trader is someone acting in the course of his business. The rules of protection differ according to the subject matter: goods (movable items including smart devices) vs. digital content (data, software) and digital services (cloud, stream). In particular, as a consumer, you have the right to withdraw within 14 days for distance purchases and the right to conformity of performance with the contract, including necessary updates; for services, the timeliness, regularity and quality of performance are assessed.

Beware of misregistering your business – buying on an ID may result in the loss of the 14-day withdrawal and other consumer protections and make out-of-court resolution more difficult. If you can’t reach an agreement with the trader, use ADR with the Czech Trade Inspection Authority (CTIA) to help settle disputes or clarify legal positions quickly and informally. Distinguish between legal liability for defects and voluntary quality guarantees – a marketing guarantee must not narrow your legal rights.