Change of heart: how easy it is to cancel an order for bespoke goods?
A recent ECJ ruling provides clarification.
Background
In the UK the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (Regulations) provides consumers with the right to cancel distance and off-premises contracts, although this right doesn’t apply if the goods ordered are to be made to the consumer’s specifications or are clearly personalised.
The Regulations are based on the Consumer Rights Directive 2011/83/EU (Directive) which the European Court of Justice (ECJ) considered in a recent case.
Facts
ML (a consumer) concluded a contract at a trade fair with Möbel Kraft GmbH & Co (Möbel Kraft), a German furniture company, for the supply of a fitted kitchen. ML subsequently declined to accept delivery of the kitchen, invoking a right of withdrawal, and Möbel Kraft brought a claim for damages before the District Court in Potsdam, Germany.
A request for a preliminary ruling was then made from the District Court to the ECJ which was asked to decide whether Article 16(c) of the Directive should be interpreted as meaning that a trader can rely on the exception to the right to cancel in the case of bespoke goods even if the trader has not yet started manufacturing those goods.
Decision
The ECJ noted as a preliminary point that a contract made at a trade fair qualifies as an off-premises contract for the purposes of the Directive and that therefore a consumer would have a right to withdraw/cancel under the Directive.
The ECJ further noted the exception in Article 16(c), namely that an exception to the right of withdrawal of an off-premises contract arises where the contract is for the supply of goods made to the consumer’s specifications or are clearly personalised.
Crucially, the ECJ found nothing in Article 16(c) to suggest that this exception is dependant on the occurrence of any event after the off-premises contract has been entered into. Conversely, the court found that the exception applies from the outset “irrespective of whether that contract has been performed or whether it is being performed by the trader”.
Implications
The ECJ’s decision is to be welcomed as it brings greater certainty to this area and will undoubtedly be reassuring for businesses that regularly engage in distance and off-premises contracts for the supply of bespoke goods.
At FSP we are continually monitoring contract law developments and if you have any questions about issues raised by this article or on contract issues more generally, please do not hesitate to contact us by emailing [email protected].
