Standard Terms : Fair for Consumers? #1
News of a ruling this week which could affect business contracts for companies trading across EU countries...
The Court of Justice of the European Union (ECJ) has held that a standard term in a consumer contract that sets the governing law for the contract as the member state in which the supplier is established is unfair, insofar as it gives the impression that only the law of that member state applies, without informing him that he also enjoys the protection of the mandatory provisions of the law that would otherwise apply.
The defendant, web retailer Amazon, was established in Luxembourg and its standard terms stated that it could make use of data supplied by purchasers and also that Luxembourg law applied. The claimant, an Austrian consumer protection body, applied to the Austrian court for an injunction prohibiting the use of this contractual term. The EJC then ruled Amazon’s standard term unfair and therefore unenforceable.
As a result, businesses trading electronically across multiple member states, and which process personal data in doing so, should review their standard terms of business to ensure they meet the current test of fairness - otherwise they could be invalid and un-enforceable.