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Contracts and withdrawal from a contract

 

Contract

A consumer contract is a transaction between a consumer and a trader / service provider, which establishes rights and obligations for both the consumer and the trader / service provider. The contract should specify the rights and obligations of the parties.

As a consumer, you are most likely to be a party to various sales contracts in the course of your daily activities. You need to enter into sales contracts with service providers in order to use various services (e.g., utility and communication services, insurance). However, you also enter into a sales contract with a trader every time you buy something (e.g., groceries).

There are several types of contracts associated with consumers, such as insurance, financial services and utility services contracts as well as contracts relating to travelling, sports club membership, etc. There are some ground rules to keep in mind before entry into any contract.

Before entering into a contract

Before entering into a contract 

  • Check the background of the trader or service provider by consulting your friends/acquaintances and internet, as well as the blacklist of the Consumer Protection Board;

  • Find out whether the product or service is offered by a natural or legal person (e.g., whether the payment has to be transferred to a private or a company account);

  • Keep in mind that the consumer protection rules do not apply if you buy a product or service from a natural person, which means that you do not have the right to submit complaints and in case of problems you can only seek help from a court;

  • In case of a service, request quotations from at least two or three companies and compare them, paying attention to contract conditions and prices;

  • Take your time to review all terms and conditions of the contract and ask specifying questions if necessary;

  • Read the contract to be clear about your rights and obligations and make sure that there is a balance of rights and obligations between you and the trader / service provider;

    Make sure you know whether and how you can terminate a service contract;

  • Keep in mind that, depending on terms and conditions of contract, early termination of a contract for a fixed term may be subject to a contractual penalty;

  • Make sure you are familiar with the deadlines for invoice payment and the consequences of a late payment;

  • In case of a service contract, find out how the company would notify you in case of a service disruption and how you can notify the company if you experience problems with the service;

  • Familiarise yourself with the procedure and contact persons for submitting complaints about the product or service.

Please remember!
  • Even though the law does not usually require contracts to be made in writing, it is advisable to draw up contracts in writing, especially in case of more valuable purchases. In case of oral contracts, it would be more difficult – or even impossible – for you to prove that a trader or service provider has breached contractual obligations.
  • Performance of a contract is mandatory for the parties.
  • In case of a telephone sales call, you have the right to demand a written copy of the contract conditions before agreeing to the contract.

Withdrawal from a contract

Your rights as a consumer, especially the right of withdrawal, depend on the manner of entry into the contract: online, by telephone, at a company’s office, during an event, in a shopping centre or with a door-to-door salesman.

  • If you enter into a contract via means of distance communication (i.e., by internet or telephone, a catalogue order), you have the right to withdraw within 14 days.
  • If you enter into a contract at a company’s office you do not have the right to withdraw within 14 days.
  • If you enter into a contract during an event or in the lobby of a shopping centre after a salesperson addresses you or even with a sales agent appearing at your door, the right to withdraw within 14 days still applies.

Different withdrawal conditions apply to different types of contract. Consequently, you should review the respective provisions in a particular contract before deciding whether to withdraw or not.
 

Please remember!
  • You can withdraw from a contract concluded outside business premises or by means of distance communication, as well as a contract for the use of a building on a timeshare basis, a consumer credit contract, an insurance contract and a package travel contract, without disclosing the reason of withdrawal to the seller.

  • The trader may not demand a contractual penalty if you would like to terminate a fixed-term electricity or heating contract before expiry and notify the trader of your intent at least one month in advance.

  • If you have received free equipment as part of a service contract, it is possible that you have to pay the price of the equipment in case of early termination of the contract.

14-day right of withdrawal

Considering that internet purchases do not enable you to inspect the desired products as closely as you would at a regular store, you have the right to withdraw from a distance contract under the Law of Obligations Act within 14 days after receiving the product. In the case of a service, the term of contract begins with the conclusion of the contract.

You should know the following regarding returning products.

  • If the vendor has not notified you of the right to withdraw from the contract within 14 days, you can withdraw from the contract within 12 months after receiving the product.
  • The return costs will often be covered by the vendor, however, they can assign that commitment to you as well, but then it should be reflected in the ordering terms and conditions.
  • If you decide to withdraw from the contract, the vendor is required to return the money you have paid within 14 days, at the latest, after withdrawal from contract (incl. postal fees you have paid when receiving the goods). Your task is to send the ordered goods back to the seller.
  • The 14-day right of does not apply to, inter alia: goods that have been produced by taking into account your specific needs (e.g. according to your measurements), goods that are perishable or lose value with age, periodicals (e.g. magazines), audio and video recordings and computer software if their containers have been opened by the consumer, sealed goods that have been unsealed after delivery and are therefore not suitable for return due to health protection or hygiene reasons (e.g. cosmetics, lingerie and bikinis), entertainment and travel services.

You have the right to file a complaint to the vendor within two years after receiving the product you have ordered online, should any defects become apparent after receiving said product.
 

 

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