Czech e-commerce is preparing for new obligations in doing business with consumers

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29th April 2021

However, the implementing bill (Parliamentary Press No. 994) is currently at the beginning of the legislative procedure and it is not certain that the process will be finalised prior to the upcoming general elections in less than six months. If the bill is not approved timely prior to the elections, it will need to be re-submitted after the elections.

Black-listed and grey-listed contractual provisions

The Civil Code will newly define “abusive provisions” (previously referred to as “prohibited provisions”) as contractual provisions which, contrary to the requirement of fairness, create a significant imbalance in the rights or obligations of the parties to the consumer’s detriment. Such provisions will not have legal effect, unless invoked by the consumer.

The black list (Section 1814(1) of the Civil Code) contains provisions that are always considered abusive and thus prohibited. The grey list (Section 1814(2) of the Civil Code) contains provisions that are presumably abusive, but it can be proved in a particular case that the contractual provision is not abusive.
The black list is amended and includes, for instance, the following provisions:

leading to automatic extension of the contract if the period in which the consumer can reject renewal is unreasonably long – the aim is to prevent automatic renewal when the consumer does not have a real opportunity to reject it, mainly because consumers usually do not think of rejecting a renewal long before such renewal;
allowing the business to keep money paid for consideration that it has not yet provided, if it voluntarily terminates the contract;
allowing the business to determine if the goods/services comply with the contract, or granting it an exclusive right to interpret any contractual provision;
stipulating unreasonable penalties for a consumer’s breach of obligation;
allowing the business to assign the contract if it can worsen the consumer’s position.

The grey list is also amended and includes, for instance, the following provisions (some of which previously appeared on the black list):

allowing the business to terminate the contract without a reasonable notice period for no justifiable reason;
allowing the business to increase the price without the consumer’s right to withdraw from the contract due to a material price increase;
excluding or limiting the consumer’s rights against the business in case of the business’s breach, including the possibility of set-off of the consumer’s receivables against the business’s receivables.

Information obligation prior to concluding a contract

Businesses are generally obliged to provide particular information to consumers prior to concluding the contract, such as identification of the seller, description of the goods, total price (including all taxes and fees), rights from a defective performance, etc. The list of required information in Section 1811(2) of the Civil Code will be amended, but most of the changes are clarifications of the existing obligations. Businesses will be newly expressly obliged to also provide their phone number and e-mail address (if any) for their identification.

Contracting via e-shops

Businesses will also need to clearly notify consumers prior to placing an order of (i) the main features of the goods/services, (ii) total price and shipping costs, (iii) term of the contract and conditions of termination, if the contract is concluded for an indefinite period or will be automatically renewed, and (iv) the shortest period of duration of the consumer’s obligations (if stipulated by the contract).

Additionally, businesses will need to ensure that consumers will expressly acknowledge the obligation to pay when placing the order. If the order is made via a click on a button (or similar option), it will need to be clearly designated as “Order with an obligation to pay” (in Czech: “Objednávka zavazující k platbě”) or similar wording. Otherwise, the contract will be invalid, unless invoked by the consumer.

Contracting via phone

If a business contacts a consumer verbally via phone or similar device, the business will need to inform the consumer at the beginning about the commercial purpose of the call and about its identity (or identity of another person on whose behalf the call is performed).

The business will then confirm the offer made during the call in a text form to the consumer. The consumer will only be bound by the offer after expressing his/her consent via electronic means or by signing confirmation of the offer in a paper form. Under the current regime, it was possible to conclude a contract directly via phone.

Defective goods

The Civil Code (Section 2161) stipulates a statutory presumption that if a defect becomes apparent within six months of the hand-over of the goods, the defect existed as of the hand-over. The amendment extends this period from six months to one year. It is then upon the seller to prove that it had delivered defect-free goods.

Provisions of the Civil Code, including provisions on rights from a defective performance, will be amended to cover goods with digital elements as well.