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Online sales: CJEU clarifies the right of withdrawal in personalized goods

Ana Ferreira, principal associate at Garrigues' Intellectual Property Department.

A recent ruling by the European Court of Justice (ECJ) clarifies the exception to the right of withdrawal in cases where the seller supplies goods that were made to the consumer’s specifications or were clearly personalized at the consumer’s request. This decision brings legal certainty to the relationship between companies and consumers and may help to prevent unnecessary disputes.

The COVID-19 pandemic has forced companies to become more digital and to rapidly assess new ways of selling their products. Market studies have revealed that over 60% of European citizens admitted that they have purchased more online than ever before, stating that they intend to maintain or increase their online purchases. This new trend has required many companies to make substantial changes, forcing them to quickly adapt to this new reality and create online offers for their products, becoming immersed in a fast-paced digitalization process.

One of the key aspects that companies need to bear in mind in distance selling is consumers’ right to withdraw from the contract without the need for justification within 14 days from the date they receive the products. This right is a cornerstone of distance and off-premises selling which is aimed at protecting consumers when buying on impulse, since, as opposed to sales in the retail premises itself, consumers have not been able to see the actual product before buying it. However, sellers need to be aware that there are several exceptions to this right, although to be applicable the seller must duly inform consumers before the purchase. It is therefore crucial for companies to be aware of all the legal exceptions applicable to the right of withdrawal and to clearly inform consumers accordingly in their terms of sale since they will otherwise lose the right to use them.

On October 21, 2020 the Court of Justice of the European Union handed down a judgment in case C-529/19 (Möbel Kraft) regarding the right of withdrawal where goods are made to the consumer’s specifications. The Directive on Distance Sales (and the local laws that have transposed such directive) establishes as an exception to the right of withdrawal, cases in which the seller supplies goods that are made to the consumer’s specifications or which are clearly personalized. In this particular case, the consumer intended to use the right of withdrawal with Möbel Kraft, an interior design and home furnishings company, after ordering a fitted kitchen from them at a trade fair. Given the customer’s refusal to accept delivery of the kitchen, invoking the right of withdrawal, Möbel Kraft brought an action for damages at the German Court. In this case it was apparent from the order that the assembly of the kitchen parts covered by the contract at issue had not yet begun when the consumer decided to withdraw from the contract. Furthermore, the goods would have been adjusted on site by Möbel Kraft and not by a third party.  The German Court had doubts whether in this particular case the right of withdrawal was applicable and therefore referred the matter to the Court of justice of the European Union (CJEU) for a preliminary ruling on the interpretation of this exception.

The reply by the CJEU to this question was quite clear. The court held that this exception is inherent in the very subject matter of such a contract and therefore could be relied on against the consumer irrespective of whether the production or assembly of the goods has commenced. The clarification of this exception to the right of withdrawal by the CJEU brings legal certainty to the relationship between companies and consumers and may help to prevent unnecessary disputes in relation to this matter. Furthermore, it draws attention to the need for companies to be very clear in their terms of sale with regard to the exceptions that are applicable to the consumer’s right of withdrawal.