NewsStandard form contracts between businesses and consumers – Key considerations for businesses

In order for sellers or suppliers to be able to properly rely on their pre-formulated standard form of contract and for their separate terms to be binding on the consumer, they need to ensure that their contract terms are fair. According to Part 2 of Greek Consumer Protection Law 2251/1994 which implements Council Directive 93/13/EEC on unfair terms in consumer contracts into Greek law (the “GCPL”), terms are not binding on the consumer where, on conclusion of the contract, the consumer ignored their existence, particularly where the supplier failed to bring them to the consumer’s attention or deprived the consumer of the opportunity to obtain real knowledge of their content.

Standard contractual terms which create a significant imbalance in the rights and obligations of the contracting parties to the detriment of the consumer are prohibited by operation of law. The unfairness of any term is assessed on a case-by-case basis taking into account the nature of the goods or services for which the contract was concluded, its purpose, all the circumstances attending the conclusion of the contract and all other terms of the contract on which it is dependent. The GCPL provides an indicative and non-exhaustive list of terms that are regarded as unfair in every case. As consumers are typically viewed as the weaker party, the burden of proof is incumbent on the seller or supplier who should be in a position to demonstrate that the contract terms are drafted in plain and intelligible language, are compatible with fair and equitable market practices and do not cause a significant imbalance in the parties’ rights and obligations to the detriment of the consumer.

It is not necessary for the consumer to have provided monetary consideration for a contract to be covered by the GCPL. However, where consideration is provided or where there are economic implications for the consumer, sellers and suppliers have to provide clear information to consumers on the economic consequences of contractual terms before concluding a contract. By way of example, in case of upfront or deposit payments, all information related to whether and under which circumstances such amounts are refundable should be clearly provided. In Greece, aside from the courts, a number of legal routes have been developed to facilitate the initiation of proceedings by consumers against one or more sellers or suppliers. Disputes may be officially referred to the Consumers’ Ombudsman with a view to preventing businesses from enforcing unfair terms and/or reaching an out-of- court settlement.

Additionally, complaints may be submitted to the Inter-Service Market Control Unit which does not resolve consumer disputes per se but has the capacity to carry out investigations and impose significant fines in situations where consumers have been misled and at all stages of movement and trading of goods and provision of services. Sellers and suppliers offering goods or services in Greece should therefore consider the terms and conditions of their standard form contracts in light of the GCPL and make improvements where necessary to address fairness and transparency concerns in order to avoid potential liability and safeguard their commercial reputation.

In addition to clarity of wording used and prominence of important provisions, particularly those with economic consequences for consumers, sellers and suppliers should ensure that they have provided the consumer with a real opportunity of becoming acquainted with the contract terms before the conclusion of a contract. Such terms should be consistent with verbal representations previously given so that sellers or suppliers can reasonably rely on the relevant terms and be in a position to claim that they are enforceable.

At Calypsis we assist our clients improve their general business practices and contractual arrangements and support them in achieving regulatory compliance with due regard to their legitimate business interests. This insight has been prepared for general information purposes of our clients and other interested persons and is not intended to constitute legal advice.

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