Consumer Contracts: the obligation to pay

Businesses and traders contracting with consumers have an array of obligations under consumer legislation. The Consumer Rights Act 2015 and The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (the “CCRs”), for the most part, form the UK legislative position.

The CCRs implement the EU’s Consumer Rights Directive and impose a number of pre-contract information requirements, meaning information that must be provided to the consumer before the contract is entered into.

The CCRs address ‘distance contracts’ which include contracts made online. In entering into a contract online, the business or trader must, amongst other things, ensure that, when placing their order, the consumer explicitly acknowledges that the order implies an obligation to pay.

This brings in the importance of the ‘buy button’ or ‘order button’.

The test
To ensure that a contract is validly entered into, one of the things a trader must do, is ensure that any button or similar function used for online orders is labelled in an easily legible manner, with either:

• the words “order with obligation to pay”; or
• some other unambiguous wording which indicates an obligation to pay.

Case update
A recent case, Fuhrmann-2-GmbH v B, from the European Court of Justice looked at the test and the importance of how buy buttons are labelled. As this is a post-Brexit case heard in the ECJ, the decision is not binding on UK courts, however they still may consider it as a reference point.

It was held in this case that when assessing the words used to label the button, which, in this case, were “Complete booking”, only the actual words on the button are important. The overall circumstances of the order process cannot be taken into consideration. This highlights the importance of ensuring your buy buttons are clearly labelled.

The court also stated that the language used should be analysed to assess whether the average, reasonably well informed and observant consumer, would associate the wording with an obligation to pay. If not, then the language in question would fail to satisfy the test, on the basis that it is ambiguous.

Key takeaways
If you trade with consumers then you should familiarise yourself with the pre-contract information requirements under the CCRs.

Specific to the obligation to pay, where consumers complete orders online, you should ensure that your buy button is appropriately labelled with language that satisfies the test set out above.

Should you require any further information on the CCRs or, your obligations to consumers, please contact the Commercial Team, who would be happy to assist.