In the case of EasyCar (UK) Ltd v Office of Fair Trading the reference for a preliminary ruling on the interpretation of Article 3(2) of Directive 97/7/EC on the protection of consumers in respect of distance sales arose. Accordingly, article 3(2) of the Directive 97/7/EC states that the right of withdrawal does not extend ”to contracts for the provision of accommodation, transport, catering or leisure services, where the supplier undertakes, when the contract is concluded, to provide these services on a specific date or within a specific period’. EasyCar was a self-drive car hire undertaking where the company’s customers can book cars offered for hire only via the internet on the model of “book-early and pay less”. The model would enable competitive pricing and a win-win situation for both the customer and Easycar. The plaintiff in the case decided to withdraw from contract of booking a car online on Easycar’s website.
One of the terms on the company’s website was that a customer will not be refunded in case the contract was cancelled. The CJEU had to judge whether the term “contracts for the provision of ... transport ... services”, in Article 3(2) of [the directive], include contracts for the provision of car hire services?’ It was held in everyday language the term ‘transport service’ should not be restricted to simply a service which moves a person from one place to another and should include a method of transport. The outcome of this case is controversial since one school of thought contends that “the decision in EasyCar focuses more upon the exception, rather the primary aim of the initial Directive, specifically to protect the consumer.“ The majority of consumers in fact do use the internet to book for accommodation, catering, leisure services, holiday or a hotel and to refuse the right for them to cancel from the contract in such circumstances would undermine the protection provided to consumers. On the other hand, an opposing view is that the judgement in Easycar makes business sense since preventing customers from cancelling such agreements would lead to unreliability, unpredictability and uncertainty amongst e-businesses which in turn would lead to changes in website data. Thus, in this case the CJEU ruled in favour of the business since and not the consumer which is a logical approach.
In order to protect the seller’s interests, a defence mechanism from the seller’s side in case of litigations initiated by the consumer to protect the sellers interest is demonstrated by the following scenario. Another abuse of the right of withdrawal could be where the person who is aware that he has the right of withdrawal, yet has not been informed by the trader. The consumer could argue, after using the product for many months that they are allowed to be compensated, where in fact they do not wish to use the product anymore. This can be illustrated where a consumer purchases a refrigerator which is silver in colour yet, they start to believe that a white refrigerator would suit their kitchen. A consequence may then be that they wish to withdraw from the contract as a result of the trader being unable to properly inform them of their right of withdrawal. A defence left for the seller would be to go to court and the latter applying the doctrine of abuse of right or doctrine of estoppel, fair dealing, deceit or good faith. Yet the costs for litigation in such cases would be too high for the seller.
There is one problem with the above method of burden of proof which puts the consumer in a weaker position than that of the trader. Specifically, Rott illustrates this issue by arguing that since the consumer has already paid for the goods, he will be entitled to have his payment returned if he withdraws within the cooling-off period. As a consequence, the trader may set his claim against the consumers by deducting the price of the good and return only partial payment for what the consumer had originally paid for. The burden of proof will shift in this respect since now it will be for the consumer to prove that he did not use the goods beyond merely testing them. Since the burden of proof usually rests with the trader, to prove a defect, the consumer will have to initiate the litigation which will obviously entail financial risks for the consumer, “leaving it in practice to the trader to determine the amount of money that the consumer owes for the use of the goods.”
Hence, it is important to determine when the testing ends and when the use will ensue?
In an Austrian case, which was not referred for a preliminary ruling to the CJEU, due to the doctrine of acte clair as decided by the Austrian Supreme Court, the question arose as to whether a consumer who has used a flat screen television at a distance, for a total of 43.5 hours was allowed to return and get a refund. It was decided that that amount of usage went beyond the necessary time for testing a television set. However, one would be allowed to use a television for a week after purchasing it in a high-street shop, can the same be applied to distance selling? Also, what does mere ‘testing’ constitute? For example, that the television screen suits one’s eyes or merely that it functions? It is argued that proving that goods has been tested is simple for the purchaser to prove, such as the case for technical goods where a clock for usage can be set, as illustrated above, yet this may not be the case for a piece of clothing that has been worn once to an event.
Also, the question as to the amount of compensation that the seller owes to the consumer is a matter of contention, which must be resolved by the court. Yet, the assumption is that the trader need only pay the difference in value which should be calculated on the basis of total performance of the good. Thus, “the actual period of use is to be put in proportion to the (still possible period of use and multiplied by the price”
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