General terms and conditions: what you need to know
When you buy something in a web shop – even before you have had a chance to pay electronically – you are often asked to tick a box by which you declare to agree with the general terms and conditions of the web shop. If you tick that box without having read the general terms and conditions, you are one of many; hardly anybody reads them before ticking. However, this is risky. General terms and conditions may contain unpleasant content. General terms and conditions, what is it all about?
General terms and conditions are often called the small print of a contract. They contain the additional rules and regulations that go with an agreement. In the Dutch Civil Code one can find the rules which general terms and conditions must meet or what they explicitly may not address.
Article 6:231 sub a of the Dutch Civil Code gives the following definition of general terms and conditions:
«One or more clauses that are formulated to be included in a number of agreements, with the exception of clauses dealing with the core elements of the agreement, as far as the latter are clear and understandable».
At first, art. 6:231 sub a of the Dutch Civil Code spoke about written clauses. However, with the implementation of Regulation 2000/31/EG, dealing with e-commerce, the word «written» was removed. This means that verbally addressed general terms and conditions are legal as well.
The law speaks about «the user» and «the counter party». The user is the one that uses general terms and conditions in an agreement (art. 6:231 sub b of the Dutch Civil Code). This usually is the person who sells the goods. The counter party is the one who, by signing a written document or in another way, confirms to have accepted the general terms and conditions (art. 6:231 sub c of the Dutch Civil Code).
The so-called core aspects of an agreement do not fall under the legal scope of general terms and conditions. These aspects are not part of the general terms and conditions. This is the case when clauses form the essence of the agreement. If included in the general rules and conditions, they are not valid. A core aspect concerns aspects of an agreement that are so essential that without them the agreement never would have been realized intention of entering the agreement could not be achieved.
Examples of topics that are to be found in core aspects are: the product that is traded, the price the counter party has to pay and the quality or quantity of the goods that are sold/bought.
The aim of the legal regulation of general terms and conditions is threefold:
- Strengthening the judicial control on the content of general terms and conditions to protect the (counter)parties on which the general terms and conditions are applicable, more in particular the consumers.
- Providing maximum legal security regarding the applicability and (non)acceptability of the content of general terms and conditions.
- Stimulating the dialogue between users of general terms and conditions and for example parties that aim to improve the interests of those involved, such as consumer organizations.
It is good to notify that legal regulations concerning general terms and conditions do not apply to employment contracts, collective labour agreements and international trade transactions.
When an issue related to general terms and conditions is brought to the court, the user has to prove the validity of his viewpoints. For example, he can point out that the general terms and conditions have been used before in other agreements. A central point in the judgment is the meaning parties reasonably may adhere to the general terms and conditions and what they may expect from each other. In case of doubt, the formulation that is most positive for the consumer prevails (art. 6:238 clause 2 of the Dutch Civil Code).
The user is obliged to inform the counter party about general terms and conditions (art. 6:234 of the Dutch Civil Code). He can fulfill this obligation by handing the general terms and conditions over to the counter party (art. 6:234 clause 1 of the Dutch Civil Code). The user must be able to prove that he did this. Is handing over not possible, the user must, before the agreement is set, inform the counter party that there are general terms and conditions and where those can be found and read, for example at the Chamber of Commerce or at the court administration (art. 6:234 clause 1 of the Dutch Civil Code) or he can send them to the counter party when asked.
That has to be done immediately and at the costs of the user. If not the court may declare the general terms and conditions invalid (art. 6:234 of the Dutch Civil Code), provided that the user can reasonably meet this requirement. Providing access to the general terms and conditions can also be done electronically. This is settled in art. 6:234 clause 2 and 3 of the Dutch Civil Code. In any case, electronic provision is allowed when the agreement was electronically established.
In case of electronic provision, the counter party must be able to store the general terms and conditions and must be given enough time to read them. When the agreement is not established electronically, the counter party must agree with electronic provision (art. 6:234 clause 3 of the Dutch Civil Code).
Is the regulation described above exhaustive? From a judgement of the Dutch Supreme Court (ECLI:NL:HR:1999:ZC2977: Geurtzen/Kampstaal) can be deduced that the regulation was meant to be exhaustive. However, in an amendment the High Court itself debunks this conclusion. In the amendment is stated that when one may assume that the counter party knows or can be expected to know the general terms and conditions, declaring the general terms and conditions invalid is not an option.
The Dutch Civil Code does not state what must be included in the general terms and conditions, but it does say what cannot be included. As stated above, this are among others the core aspects of the agreement, such as the product that is purchased, the price and the duration of the agreement. Furthermore, a black list and a grey list are used in the assessment(art. 6:236 and art. 6:237 of the Dutch Civil Code) containing unreasonable clauses. It should be noted that the black and the grey list are applicable when general terms and conditions apply to agreements between a company and a consumer (B2C).
The black list (art.6:236 of the Dutch Civil Code) contains clauses that, when included in the general terms and conditions, are regarded not reasonable by law.
The black list has three sections:
- Regulations that deprive the counter party of rights and competences. An example is the deprivation of the right to fulfillment (art. 6:236 sub a of the Dutch Civil Code) or exclusion or restriction of the right to dissolve the agreement (art. 6:236 sub b of the Dutch Civil Code).
- Regulations that grant the user additional rights or competences. For example, a clause that allows the user to raise the price of a product within three months after entering the agreement, unless the counter party is allowed to dissolve the agreement in such a case (art. 6:236 sub i of the Dutch Civil Code).
- A variety of regulations of varying evidentiary value (art. 6:236 sub k of the Dutch Civil Code). For example, the automatic continuation of a subscription on a journal or periodical, without a correct procedure to cancel the subscription (art.6:236 sub p and q of the Dutch Civil Code).
The grey list of general terms and conditions (art.6:237 of the Dutch Civil Code) contains regulations that, when included in the general terms and conditions, are assumed to be unreasonably burdensome. These clauses are not per definition unreasonable burdensome.
Examples of this are clauses that involve an essential limitation of the obligations of the user towards the counter party (art. 6:237 sub b of the Dutch Civil Code), clauses that allow the user an unusual long term for fulfillment of the agreement (art. 6:237 sub e of the Dutch Civil Code) or clauses that commit the counter party to a longer cancellation period than the user (art. 6:237 sub l of the Dutch Civil Code)).
Should you have any further questions or comments after reading this article, feel free to contact mr. Maxim Hodak, attorney-at-law at Law & More via firstname.lastname@example.org or mr. Tom Meevis, attorney-at-law at Law & More via email@example.com or call us on +31 (0)40-3690680.