Differences in Contract Law between B2B and B2C Transactions
Contract law differs between business-to-business (B2B) transactions and business-to-consumer (B2C) transactions. These differences must be taken into account by the respective parties when concluding agreements.
The Obligations Section of the Civil Law covers general issues of obligation law and includes provisions for specific types of contracts. General principles apply to all contracts, including the principle of legal equality of parties, the principle of freedom of contract, and the principle that obligations must be fulfilled. In addition to the Civil Law, obligation law is also regulated by other normative acts.
The Commercial Law regulates the general provisions of B2B contract law. Its objective is to ensure swift legal responses to economic situations, prevent the misuse of business information, facilitate rapid contract formation, address situations involving extraordinary obstacles, and manage shortened limitation periods. In general, B2B transactions are characterized by greater contractual freedom compared to B2C transactions.
The Consumer Rights Protection Law (CRPL) regulates general provisions for B2C contracts. The Prohibition of Unfair Commercial Practices Law (PUCPL) further protects consumers against aggressive, misleading, or unprofessional business practices. In B2C transactions, there exists an asymmetry of knowledge and information between the business and the consumer, as well as a significant disparity in bargaining power. To address this imbalance, consumer protection laws presume that the consumer is the weaker contracting party and is entitled to greater legal protection than that provided by the Civil Law.
The CRPL and PUCPL include the following specific provisions for B2C transactions:
Unfair Contract Terms
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Contracts that reduce the liability of parties as prescribed by law, restrict the consumer's rights to contract with third parties, grant advantages to the business, impose restrictions on the consumer, or otherwise place the consumer at a disadvantage violate the principle of legal equality between the parties.
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A contract clause that requires the consumer to waive their statutory rights is invalid.
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Contract terms must be drafted in clear and understandable language. Ambiguous or imprecise written terms are interpreted in favor of the consumer.
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A term is deemed unfair if it has not been mutually negotiated and, contrary to the requirements of good faith, causes significant imbalances in the parties' rights and obligations to the detriment of the consumer.
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The business bears the burden of proving the negotiation of contract terms, the delivery of goods or services, compliance with product standards at the time of delivery, and the insignificance of any product non-conformities.
Right of Withdrawal
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Consumers have the right to withdraw from a distance or off-premises contract within 14 days without providing a reason.
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If the business fails to inform the consumer about withdrawal rights or provide a withdrawal form, the withdrawal period is extended to one year.
Right to Compensation
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Consumers are entitled to remedies for non-conforming goods or services, including price reductions, defect rectification, replacement, contract termination, and reimbursement.
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Consumers may unilaterally withdraw from a contract if the goods or services are not delivered on time, and the business must refund all payments made under the contract.
Claims
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Consumers have the right to submit claims for non-conforming goods or services within two years from the date of purchase or receipt.
Unfair Commercial Practices
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Misleading, aggressive, or unprofessional practices are considered unfair. In such cases, consumers are entitled to seek price reductions, contract termination with refunds, and compensation for damages.
Consumer Rights to Economic Protection
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If a dispute with a business cannot be resolved, consumers can seek assistance from the Consumer Rights Protection Centre (CRPC) or other designated dispute resolution bodies.
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If the CRPC’s intervention is unsuccessful, consumers may approach the Consumer Dispute Resolution Commission.
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Consumers, like parties in B2B transactions, retain the right to pursue claims in court, including under procedures for small claims.
This summary highlights the differences in contract law provisions for B2B and B2C transactions, emphasizing the enhanced protection afforded to consumers in B2C relationships.