THE BOTTOM LINE
- Significant Financial Penalties: Failing to meet consumer information requirements for online sales can lead courts to slash the amount a customer owes you. In this case, the reduction was a staggering 60%.
- The Burden of Proof is on You: Businesses must be able to prove, with evidence like screenshots of the entire checkout process, that they provided all legally required information clearly and at the right time. The wording on the final purchase button is under intense scrutiny.
- Contracts Are at Risk: This ruling impacts the enforceability of all distance contracts with consumers, including sales, subscriptions, and rentals. A flawed online process can make a significant portion of your revenue legally uncollectable, even when the customer defaults.
THE DETAILS
A Dutch company that rents out products recently learned a costly lesson in consumer law. When it took a non-paying customer to court, it likely expected a straightforward win, especially since the customer didn’t even show up. However, the District Court of East Brabant conducted its own proactive review of the company’s online contracting process. Under EU-derived Dutch law, judges are required to ensure businesses comply with strict information rules designed to protect consumers in distance selling, regardless of whether the consumer mounts a defence. This case is a stark reminder that simply having a customer default on payment doesn’t guarantee a favourable judgment if your own digital sales process is non-compliant.
The court identified multiple serious failures. Most critically, the business could not prove that its final order button contained unambiguous text, such as “Order with payment obligation,” as required by law. The court stressed that the payment obligation must be clear from the text on the button itself—relying on information elsewhere in the checkout flow is not enough. Additionally, the company failed to prove it had clearly informed the consumer about several essential terms before the contract was concluded, including the different payment methods available, the 14-day right of withdrawal, the contract’s duration, and the minimum commitment period.
Applying a national sanctioning guideline, the judge ruled that the combination of the defective order button and at least three other serious information breaches warranted a severe penalty. Instead of declaring the entire contract void, the court partially nullified it by reducing the consumer’s payment obligation by 60%. This meant the company could only claim €1,239 out of its original €3,099 claim. This is not a fine paid to the state; it is a direct and substantial reduction in the revenue the business is legally entitled to collect. The ruling sends a clear message to all businesses operating online: audit every step of your digital customer journey or risk your contracts becoming partially unenforceable.
SOURCE
Source: Rechtbank Oost-Brabant
