Consumer contract

What it means

A consumer contract is one a business concludes with a consumer, meaning an individual acting outside their trade or profession. It may be a sale in a shop, an order in an online store, a service agreement, a loan or a subscription.

The law treats the consumer as the weaker party and protects them in several ways. Unfair terms that create a significant imbalance to the consumer’s detriment are invalid. The business has extensive information duties, and the consumer cannot waive rights granted by law.

For contracts concluded at a distance or off-premises, the consumer also has a right of withdrawal without giving reasons within a statutory period. Sales of goods are further subject to special rules on complaints and liability for defects.

How it works in practice

For clients selling to consumers, we check whether their terms and conditions comply with consumer law. Clauses borrowed from B2B contracts are common, such as liability caps or high contractual penalties, which do not apply against consumers.

Before concluding a distance contract, the business must give the consumer information about itself, the product or service, the total price including charges, payment and delivery, the right of withdrawal and the complaints procedure. It is most practical to have this both on the website and in the confirmation email.

For services with a fixed term or automatic renewal, the consumer must be clearly told the length of the commitment and how to cancel. Hidden renewals or complicated cancellation are a frequent cause of complaints and inspections.

What to watch out for

A company selling to both businesses and consumers should have separate terms or at least clearly distinguished provisions. A single set of B2B terms also used for consumers often contains invalid clauses, and an SOI inspection may result in a fine.

A business owner can also be a consumer when buying for private use, such as a sole trader buying a washing machine for home. Conversely, a company buying for its business is not a consumer. In borderline cases the purpose of the purchase decides, not merely whether the customer gave a company ID.