Malta implemented the Consumer Directive 2011/83/EU, through Legal Notice (LN) 439/2013 on June 13.

The directive and local regulations are intended to improve transparency in the sale of goods and services, giving consumers the necessary tools to make an informed decision, thereby limiting as much as possible, any ‘abuse’ which may otherwise be exercised by traders. As a result, traders must ensure that they are up to speed with the spirit of the directive to avoid possible contract termination and/or the imposition of fines for non-conformity.

The regulations go one step further and extend the withdrawal period up to 12 months, in the event the trader fails to provide information on the right of withdrawal

Barring a number of exceptions, the regulations incorporated in the LN apply to contracts concluded between a trader and consumer (i) on-premises (e.g in-store), (ii) off-premises (contract is concluded in the simultaneous physical presence of trader and consumer, however, in a place which is not the business premises of the trader, e.g. door-to-door selling) or (iii) at a distance ( the trader and consumer are not physically present when the contract is concluded, e.g. telephone or online sales).

Traders must, by virtue of the regulations implementing the directive, ensure consumers are furnished with clear and comprehensible information; the extent of which depends on whether the contract is considered an on-premises, off-premises or distance contract and includes but is not limited to:

• The main characteristics of the goods or service;

• The identity of the trader;

• The price of the goods or services, where this can be easily calculated, and where this is not possible, the manner in which the price shall be calculated, including also any freight, delivery or postal charges where applicable;

•The arrangement for payment, delivery and performance where applicable;

•The existence of a legal guarantee of conformity for goods, as well as conditions of after-sales services and commercial guarantees where applicable;

• The duration of contract.

If the contract is for an indeterminate period of time or is to be extended, the consumer is to be informed of the conditions for terminating the contract;

In the case of digital data, the information required also extends to the functionality and interoperability of the digital content, which respectively refer to the ways in which the digital content is to be used and the information regarding the standard hardware and software environment with which the digital content is compatible.

Moreover, the regulations highlight, the manner in which the information required of the trader is to be communicated to the consumer; what information is to be communicated to the consumer depending on the type of contract and further emphasise the traders’ obligations towards the consumer before the contract is concluded, among which is the right to withdraw from the contract.

Barring a number of exceptions, the regulations provide consumers with a 14-day period to withdraw from a distance or off-premises contract, without giving any reason and without incurring any costs other than those relating to delivery costs, if the consumer has opted for a type of delivery other than the least expensive type and the costs incurred to send the goods back, as the case may be, unless the trader has offered to collect same.

The regulations go one step further and extend the withdrawal period up to 12 months, in the event the trader fails to provide information on the right of withdrawal.

Consumers, in turn, must communicate their desire to withdraw from the contract in one of two ways, either by means of the withdrawal form set out in the regulations, or by any other unequivocal statement, provided their decision is exercised within the period stipulated in the regulations.

Withdrawal will lead to the termination of the contract, and to this end, the regulations also set out the obligations of both the trader and consumer in such an event.

Apart from the onerous obligations imposed on traders, the regulations also set out sanctions which shall be imposed on any person, including, therefore, the consumer, in the event the provisions of the regulations are not adhered to. These sanctions come in the form of an administrative fine of not less than €500 and not more than €47,000.

The moral of these regulations is not a complicated one;‘consumer is king’. Simply put, the consumer has the money to purchase goods and services and without the consumer, production would cease – what good would production be if what is produced cannot be sold?

Given the above, it is imperative that traders bring their affairs in line with these regulations in order to minimise their exposure to consumer claims. This can be achieved through several avenues, depending on the type of contract entered into, as for instance, providing standard contracts to consumers in the manner and form prescribed by the regulations, thereby assuring producers’ or consumers’ acknowledgement and acceptance of the information and/or conditions stipulated in the contract before business is concluded.

www.fenechlaw.com

This article is not intended to offer professional advice and you should not act upon the matters referred to in it without seeking specific advice.

Dr Krystyna Grima is an associate at Fenech & Fenech Advocates.