Introduction to the legal bases of E-commerce PRESENTATION

Definition of E-commerce  Electronic business transactions E-commerce All contracts concluded by means of software, e.g. distance selling contracts, internet auctions, platforms, web 2.0, communities, providers, etc. IT-Contracts All contracts relating to Information Technologies, i.e. Software, Hardware and related services, which can occur isolated or in combination

Overview of legal sources of the German E-commerce General legal sourcesSpecific legal sources The German Civil Code (BGB particularly provisions to AGB §§ BGB) The German Teleservices Act (§§ 5, 6, 16 TMG) information obligations of the service provider The German Commercial Code (HGB)E-commerce and distance selling law (§§ 312 et seq. BGB) The German Criminal Code (StGB)Art. 246 EGBGB information obligations regarding distance selling contracts The German Copyright LawThe German Digital Signature Law (SigG), framework conditions, § 126 a BGB The German Trade Regulation act (GewO) Price Qotes Regulation (§ 1 (2) PAngV), regulates composition of the final price The German law against unfair competition The Act on the Implementation of the EU Consumer Rights Directive ( )

The Act on the Implementation of the EU Consumer Rights Directive and on the Amendment of the Law on Housing The law modifies:  Art. 312 et seq. German Civil Code (BGB) (provisions concerning contracts negotiated away from business premises, distance contracts and contracts in electronic commerce)  Art. 355 et seq. BGB (right of withdrawal)  Art. 246 et seq. Introductory Law to the German Civil Code (EGBGB) (consumer information obligations)

The applicable law in E-commerce  E-commerce and the applicable law, cross border contracts (questions of private international law) Art. 29 chocie of law may not circumvent domestic consumer protection law Party in Poland Party in Germany Art. 27 Introductory Law to the German Civil Code (parties agreed to the law of one country) Party, who provides the performance, has it`s seat in Poland Art. 28 Introductory Law to the German Civil Code Party in Germany Contract (closely connected)

Formation of the contract  § 130 (1) BGB, a declaration of intent becomes effective at the point of time when this declaration reaches the absent person (For the receipt it is required that the addressee can take note of the declaration)  The presentation of goods (catalogue) or services on a homepage is not a legally binding offer. Comparable with a shop window display it is an invitation to anyone to make an offer („invitatio ad offerendum“)  An incorrect electronic declaration of intent may be avoided, §§ 119 et seq. BGB (e.g. incorrect entry of an , message sent by mistake, incorrect transmission) (use of faulty soft-/hardware, incorrect data in data processing operation) Offer (declared by E- Mail or online order form) Legally binding offer with Acceptance (declared by or mouse click) Contract (between absentees, § 130 BGB) chatrooms, online conference system sending off the order by the customer not by Auto- responder reply, confirmation

Ebay specifics (ricardo.de decision)  Legally binding offer with publishing the product on the auction site Seller (of a new car, listed price DM) opening price 10 DM Buyer (highest bid DM) ricardo.de Online auction website Legally binding offer, not an invitation Acceptance by the last bid and expiration

Formation of the contract on the internet (form requirements)  Exceptions: Contracts, which are subject to formal requirements by law (written form, certification, notarial authorisation).  Mandatory specified written form, § 126 BGB (e.g. credit agreements for consumers, transfer of houses, guarantees).  Substitute for the written form, § 126 a BGB, comparable with a seal, if the requirements of the Digital Signature Law (SigG) are fulfilled the qualified electronic form replaces the written form (§ 126 a BGB).  Problem: Electronic signatures are not popular among consumers.

What are distance selling contracts?  According to § 312 c (1) BGB (§ 312 b (1) BGB) distance contracts are contracts for which the entrepreneur, or a person acting in the entrepreneur’s name or on his behalf, and the consumer exclusively avail themselves of means of distance communication in negotiating and concluding the contract, except where the conclusion of the contract does not take place in the context of a sales or service-provision scheme organised for distance sales.  Means of distance communication are all means of communication which can be used to initiate or to conclude a contract, without requiring the simultaneous physical presence of the parties to the contract, such as letters, catalogues, telephone calls, faxes, s, text messages sent via the mobile telephone service (SMS) as well as messages broadcast and sent via teleservices (§ 312 c (2) BGB).

The protective purpose of the distance selling law Consumer cannot: 1. inspect the goods 2. The characteristics of the goods cannot be explained by personnel of the entrepreneur. Against that the consumer should be protected by information duties, § 312 d (1) BGB in conjunction with Art. 246 a EGBGB (§ 312 c in conjunction with Art. 246 § 1 and 2 EGBGB) of the entrepreneur and by the right of withdrawal (§ 312 g in conjunction with § 355 BGB).

Information requirements, distance sales (§ 312d BGB, § 246a EGBGB) E-commerce Regulation: Commercial websites must show:  The company`s name  Postal address (registered office) and address  Company`s registration number and tax number  All prices, delivery costs must be clear and unambiguous  „button“ function, „order with obligation to pay“ (§ 312 j (3) BGB) Distance Selling Regulation:  Main characteristics of the goods or services  Arrangements for payment and delivery, contract confirmation  Existance of the right of cancellation  Information about statutory warranty rights

Right of withdrawal in distance selling contracts  § 312 g (1) BGB new version (formerly § 312 c BGB): In the case of off-premises contracts and of distance contracts, the consumer has a right of revocation/withdrawal pursuant to section 355. Exceptions: The consumer has no right of withdrawal, unless otherwise agreed by the parties (§ 312 g (2) BGB) when ordering:  Goods that are clearly tailored to personal needs of the consumer  Goods that could expire/spoil quickly (e.g. food)  sealed audio or sealed video recordings or sealed computer software, if they were unsealed after delivery  Newspapers, magazines

Right of withdrawal (Art. 312 c in conjunction with Art. 355 BGB)  The length of withdrawal period depended on: 14 days Entrepreneur informed consumer about right of withdrawal before the conclusion of contract 1 month Entrepreneur informed consumer about the right of wirtdrawal only after the conclusion of contract

Beginning of the withdrawal period in distance selling law  In the case of a sale of consumer goods the period starts as soon as the consumer has received the goods (§ 356 (2) BGB).  There is no more "eternal right of withdrawal“. The right of withdrawal shall expire at the latest upon expiry of 12 months and 14 days after all criteria for the commencement of the withdrawal period are met, even if the entrepreneur did not properly instruct the consumer about his/her right of withdrawal. New regulation under § 312 g (1) BGB (new version) in conjunction with § 355 BGB Europe-wide uniform withdrawal period of 14 days starts with conclusion of contract (§ 357 (1), § 355 (2) BGB)

Declaration of withdrawal by the consumer  As an alternative to the right of withdrawal, the right to return, as laid down in § 312 d BGB has ceased to exist.  Merely sending back the goods shall no longer be sufficient, unless the parties have expressly agreed to it.  The consumer must exercise his/her right of withdrawal through an explicit declaration to the entrepreneur, giving reasons for withdrawal is not required (§ 355 (1) BGB).

Obligation to provide for a withdrawal form  In addition to the obligation of the instruction on the right of withdrawal the entrepreneur must provide a standard withdrawal form before submitting an order, pursuant to § 312 d (1) BGB.  The consumer can exercise the withdrawal by using the model withdrawal form or e.g. telephone, .  The model instructions on withdrawal in Annex 1 and 2 of Article 246a Section 1 (2) Sentence 2 EGBGB have been adapted  According to § 356 BGB the entrepreneur must provide the consumer with a withdrawal form placed on the entrepreneur’s website, which the consumer can complete and send back to the entrepreneur. The receipt of withdrawal must be confirmed by the entrepreneur.

The consequences of withdrawal  All goods and payments must now be returned within 14 days after the consumer exercised his/her right of withdrawal (§ 357 (1) BGB).  The entrepreneur must bear sending costs (§ 357 (1) BGB), must reimburse the regular delivery costs if the consumer exercises his/her right of withdrawal.  The consumer must bear the return shipment costs, independent of the value of the item/goods, provided that he/she was properly informed thereof (§ 357 (6) BGB, Art. 246a EGBGB). The 40 Euro mark has ceased to exist.  Costs of transportation. The consumer shall only have to bear costs of transportation if he/she was properly informed thereof before declaring his/her contractual statement.

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