Contracts and withdrawal from a 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.
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.
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.