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Online trading as a way out of the Covid-19-crisis

Date: 
Sunday, 15 March 2020

Overview

Questions and answers:

What companies have to consider when doing e-commerce

As the experiences from China already show, one of the biggest winners of the crisis is e-commerce. Also companies that have not used this sales channel so far may use this opportunity to minimize losses caused by business shut-down: While "customer contact in business premises of the trade and service sectors" will be ceased as of today, 16 March 2020 with a few exceptions, delivery services will continue to be permitted for the time being. Postal services are also explicitly excluded from the restrictions and continue to operate. Companies can therefore remain competitive by digitalising their business processes and switching to mail order. It is well understood that in times of crisis setting up a professional web shop may be difficult to manage. However, it is also possible to enable online trading through temporary infrastructure such as e-mail or telephone orders. Still, the following essential points must be observed in order to avoid legal issues:   

  • In the retail sector, orders can be placed via e-mail, telephone or webshop. As an alternative to the usual delivery of goods to the customer, click & collect models without customer contact could also be considered.
  • In the service sector, many services can be provided via hotlines, chatbots or video calls. Some sectors however, such as hairdressers, require physical contact. Since the restrictions only concern customer traffic "in business premises", it is still unclear to what extent home visits are permitted.

When shifting stationary trade to distance selling, however, entrepreneurs must observe the strict, mandatory consumer protection regulations:

Applicability of the FAGG and rights of withdrawal

In case individual contracts are concluded via web shops, telephone and e-mail concluded in a structured and not merely individual cases, the FAGG dealing with long distance selling agreements is applicable. Accordingly, companies are subject to pre-contractual information obligations and must grant consumers a 14-day right of withdrawal which may be exercised without giving any reasons. Different exceptions to the scope of application and right of withdrawal do apply. This is in particular the case for current demand for the supply of food and goods of daily use:

For example, the FAGG does not apply to regularly recurring home deliveries (eg weekly delivery of a box of fruits). Thus, entrepreneurs do not have any additional obligations under the FAGG. The occasional delivery of meals is covered by the FAGG, but is excluded from the right of withdrawal in the case of scheduled delivery, eg via standard delivery apps. Furthermore, the right of withdrawal is excluded for perishable goods and products that are not suitable for return for reasons of hygiene after an affixed seal is removed. In these cases, despite the exclusion of the right of withdrawal, consumers must still be comprehensively informed about the potential right.

Anyone wishing to be active in e-commerce must adapt its sales model and general terms and conditions and comply with the legal information obligations to provide consumers with all relevant details in a transparent manner. Anyone who allows orders to be accepted by telephone or e-mail will quickly be confronted with the application of the FAGG. Especially the right of withdrawal and its extension in case of violation of information duties can be a setback after initial euphoria. In view of the serious consequences, distribution concepts and the contractual documents should therefore be legally checked before initiating mail order business.

What can companies regulate in their contract and what obligations do they have towards consumers in case of Covid supply difficulties?

Unlike in the B2B sector, force majeure clauses are regularly non-transparent and therefore invalid towards customers. Thus, entrepreneurs cannot simply pass on the consequences of Covid-19 to consumers. Rather, the statutory provisions apply:

In the event of any delays in production or delivery, the statutory consequences of default are applicable. Consumers may either insist on performance of the contract or withdraw from it by setting a reasonable grace period. If the entrepreneur is at fault, he will also be liable for damages. Companies can avoid the consequences of delay by providing realistic information on the availability of goods in webshops and delivery times. In doing so, vague or excessively long periods of time should be avoided due to their lack of transparency causing gross disadvantage.

Furthermore, official closures of business premises and public assembly bans also have a massive impact on the service sector. This applies in particular to all services booked and scheduled in advance, such as hotels, flights, concerts and other events. If a permanent obstacle - Covid-19 - prevents the provision of services at a specific point in time, it becomes legally impossible. The contract is, thus, terminated and any deposits already paid must be refunded to the consumer affected. To prevent loss of customers, many companies proactively offer alternative dates and additional services.

Your contact persons:

Axel Anderl
Head of the IP/IT and Data Protection Practice Group as well as the Digital Industries Group
T +43-1-533 4795-23
axel.anderl@dorda.at

Alexandra Ciarnau
Expert IP/IT and Datenschutz as well as the Digital Industries Group
T +43-1-533 4795-23
alexandra.ciarnau@dorda.at



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