Any order made by a consumer through a website is binding on the trader

Date 22 jun. 2010

The Danish Consumer Ombudsman has criticised the website GAD.dk, because GAD.dk had stated that the company reserved the right to cancel any submitted order in their terms and conditions.

 

In the case in question, GAD.dk had made use of the abovementioned reservation to partly cancel a purchase made by a consumer through GAD.dk.

 

The Consumer Ombudsman stated that any terms and conditions pursuant to which the trader, subsequently, may or may not decide to fulfil the agreement are unreasonable and, therefore, contrary to ethical marketing practice.

 

The case in brief

A consumer had ordered several items through GAD.dk. Subsequently, GAD.dk cancelled part of the purchase with reference to the general terms and conditions under which it was stated that GAD.dk reserved the right to cancel any order if, for instance, an incorrect price had been stated, or if a delivery of the items could not be made, or if any changes in price or fees occurred. The general terms and conditions also stated that the agreement had not been made until GAD.dk had made the withdrawal from the customer’s account.

 

The consumer filed a complaint to the Consumer Ombudsman about the partial cancellation of the order.

 

The legal foundation

The contract law principle for e-commerce is that the offers of items through any website are to be considered binding.

 

The contract law consequence of this is that once the consumer accepts the binding offer an agreement has been made. Where e-commerce is concerned, when the consumer has put an item into the shopping basket and confirmed the order, the consumer is considered to have accepted the trader’s offer.

 

Hereafter, neither one of the parties has, as a rule, the possibility of changing or cancelling the agreement, unless by a new agreement between the parties, or in the event of a faulty price specification which the consumer ought to have realised. In the latter of the two, the trader may demand to be released from the agreement according to the Danish Contracts Act, Section 32.

 

According to the Danish Marketing Practices Act, Section 1, the trader must display ethical marketing practice in consideration of the consumers, among others. The composition of terms and conditions are considered part of the trader’s marketing and, therefore, the terms and conditions will be assessed according to the Danish Marketing Practices Act, Section 1.  

 

It is commonly presumed that those partial terms and conditions which only serve in favour of the trader’s interests are contrary to the Danish Marketing Practices Act, Section 1, as the assessment of any given terms and conditions is based on the common contract legal regulation.

 

The Consumer Ombudsman’s remarks

The Consumer Ombudsman commented that it must be stated very clearly on the website if the offers on the website are merely an invitation to make an offer. Furthermore, the Consumer Ombudsman specified that it must be made extremely clear to the consumer if no binding agreement has been made until the trader accepts the customer’s offer.

 

In continuation hereof, the Consumer Ombudsman stated that it is not sufficient to simply state these conditions under the general terms and conditions.

 

With regards to the specific complaint about GAD.dk the Consumer Ombudsman declared that the terms and conditions according to which only the consumer is bound by the placing of the order, while the trader may decide for himself whether he wishes to fulfil the agreement, is clearly unreasonable and, therefore, contrary to ethical marketing practice.

 

Once the agreement has been made, both parties are bound by it, and the trader may not change the order, regardless of any delivery problems the trader might encounter.

 

Assessment

Any consumer who places an order through a website has the legitimate and protected expectation for an agreement to have been made, which the consumer may legally rely on.

 

This is due to the fact that the contract law principle implies that any offer on a website is binding on the trader. If the trader wishes to depart from the contract legal principle, the trader must clearly specify this departure to the consumer before the consumer acts in reliance on the common contract law regulation. 

 

In the event that the trader wishes to depart from the commonly valid contract legal principles, the trader must specify this clearly to the customers on the website before, during and after the placing of an order.

 

In light of the criticism from the Consumer Ombudsman, GAD.dk has changed the website and the terms and conditions. It now appears from the front page and during the use of the shopping basket function that the agreement has not been made until the customer receives a confirmation of the order.

 

 

If you have questions regarding the above or require additional information on the criticism from the Consumer Ombudsman, please contact attorney Dan Moalem (dmo@mwblaw.dk) or attorney Pernille Nørkær (pno@mwblaw.dk).

 

Neither of the above is legal counselling and Moalem Weitemeyer Bendtsen does not guarantee that the content is in fact correct. Moalem Weitemeyer Bendtsen does not assume any responsibility of any kind in the event that anyone who reads this might use it as a basis for any decisions or considerations.