Contracts with Consumers and Users
1. Contracts with Consumers and Users
Contracts between consumers or business users are governed by the LGDCU (General Law for the Defense of Consumers and Users), as well as special regulations that may exist for particular types of contracts. In the absence of specific regulations, civil and commercial law applies. They are also subject, where appropriate, to the LCGC (Commercial Code) (art. 59.2 and 3).
Key Aspects of the Regulation:
Information: In addition to being a basic consumer right, information is crucial for forming consent in contracts. Art. 60.1 specifies that before concluding a contract, the provider must give the consumer or user clear, comprehensible, and relevant information about the contract’s essential nature, particularly its legal and economic conditions, and the goods or services covered (detailed information at no. 2: Identification of the bidder, price, delivery date, contract performance and durability, security, etc.).
Offer, Promotion, and Advertising: Consumers and users can demand that the contents of the offer, promotion, or advertising, and the benefits of each good or service be honored, even if they are not explicitly included in the contract or supporting documentation (art. 61.2). Therefore, it’s advisable to include an expiration date on documents like budgets provided to customers.
Right to Terminate: The Act ensures that the exercise of consumer rights is not hindered by obstacles. Clauses imposing onerous or disproportionate obstacles to exercising these rights, particularly setting excessive deadlines or limitations that impede the right to terminate the contract, are prohibited. Consumers and users can terminate the contract in the same way it was entered into. Contracts for services, product deliveries, or continuous supply must explicitly outline the termination procedure (art. 62). This highlights the difference between theoretical and practical aspects.
Documentary Confirmation: The Act requires providers to deliver documentary confirmation of the contract to the consumer or user (art. 63), even if it’s just a delivery receipt.
Interpretation in Favor of Consumers: Contracts will be interpreted in favor of consumers, following the principle of objective good faith (art. 65).
Right of Withdrawal:
The right of withdrawal (arts. 68 to 79) is particularly important in contract regulation. It originates from EU law to protect consumers and is a notable exception to the principle of pacta sunt servanda (agreements must be kept).
The right of withdrawal is justified by the potential for distrust in the principle of autonomy in certain sectors, particularly distance selling. In these cases, consumers may consent without sufficient time for deliberation, based on images or descriptions provided by the seller, without the opportunity for direct examination. This can lead to disappointment upon receiving the goods or services.
The right of withdrawal, as an exception to pacta sunt servanda, requires explicit recognition. Art. 44 of the LOCM (Law on Electronic Commerce) recognizes it for distance selling in general, and art. 10 of Law 22/2007 recognizes it for distance selling of financial services.
The deadline for exercising the right of withdrawal varies, but art. 71 of the LGDCU establishes a minimum of seven working days (counted from the receipt of the goods), which is reiterated in art. 10.1 of Law 22/2007.
Exercising the right does not require any justification and carries no penalty (arts. 68.1, 44.1 LGDCU, and 10.2 of Law 22/2007).
While recognizing the right of withdrawal for a range of contracts, the Act also allows for exceptions. For example, in remote financial services, it excludes loans secured by a mortgage or an interest in property, as well as declarations by consumers using notary services.
To facilitate the exercise of the right of withdrawal, the Act does not impose any specific formalities, although the burden of proof lies with the consumer (LGDCU). Exercising the right does not involve any cost for the consumer (arts. 72 and 73). Art. 10.3 of Law 22/2007 states that the consumer must notify the supplier when exercising the right, using any legally permissible method to record the notice. This is also mentioned in art. 44.2 of the LOCM, although it may present challenges regarding proof.
Regarding the effects of withdrawal, the parties must mutually restore the benefits received, following the provisions of arts. 1303 and 1308 of the Civil Code. The consumer or user is not obligated to compensate for any diminished value of the goods resulting from agreed-upon use or the nature of the goods or service. They are also entitled to reimbursement for necessary and useful expenses incurred (art. 74 LGDCU).