How do the changes to the Spanish Consumer and User Protection Act affect you?

Image Article 10 - Changes to the Spanish Consumer and User Protection Act

In 2021, several amendments were made to the recast version of the Spanish General Consumer and User Protection Act. These amendments were due to the need to incorporate several European directives into Spanish law, which involved adapting the legal framework to new forms of consumption in digital content and services, user reviews, and door-to-door selling practices.

Let’s see first the Royal Decree-Law 7/2021 of 27 April, on the transposition of European Union Directives, entered into force on 1 January 2022. Among other aspects, the provisions of this amendment affect consumer protection regarding contracts for the sale of goods and the supply of digital content or services. This is a booming market thanks to the emergence of content platforms. Subscriptions to digital services alone had a turnover of 58 billion euros in the European Union last year.

The European Directives transposed by this Royal Decree-Law established common rules on certain requirements relating to contracts entered into between companies and consumers for the supply of digital content and services, and for the sale of goods. In particular, they stipulated and made available to consumers some rules on compliance with the contract , remedies in the event of non-conformity, and the procedures for enforcing these remedies.

Additional guarantees on digital products and services, including ‘free’ ones

Beyond the inescapable need to transpose these European directives into Spanish law, the health crisis has also highlighted the need to provide concrete and specific regulation for all types of digital services and contracts, which have seen a strong growth in the wake of the pandemic. As a result of the lockdown, many consumers have been forced to make use of multiple digital tools and services, including certain essential products such as food ordered online.

The main amendments provided for in Royal Decree-Law 7/2021 include:

  • Extended scope to include contracts for the supply of digital services where the consumer does not pay a price but obtains the goods or services in exchange for providing personal data. The consumer or user has some basic rights even in connection with this type of ‘free’ services.
  • Compliance with the contract is determined by the fulfilment of subjective and objective requirements. If the good or service does not meet these requirements, the seller is liable to the consumer, who may demand a repair or replacement. The repair or replacement will be completely free of charge and will be carried out within a reasonable time frame. If neither repair nor replacement is possible, then a price reduction or termination of the contract may be demanded.
  • Modification of the statutory warranty period: the warranty period is now three years from delivery for physical goods, and two years for digital content or services. In the case of second-hand products, the warranty period is left to the discretion of the parties but is never less than 1 year.
  • The time limit for presumption of non-conformity of the product is extended from 6 months to two years from the date of delivery for physical goods. In the case of supply of digital content or services, this period of presumption of non-conformity is set at 1 year. This means that the burden of proving that the product, good or service is compliant and not defective is shifted to the trader.
  • For repair and after-sales services, the period within which the stock of repair parts is required is extended to 10 years. The idea behind this amendment is to try to combat so-called planned obsolescence and thus allow consumers to enjoy the product for a longer period of time.
  • The time limit for the consumer to claim that the product is not in conformity, i.e., the limitation period, is extended from 3 to 5 years.
  • That the commercial warranty (offered by the manufacturer) takes precedence over the legal warranty if the latter is more beneficial to the consumer. Until now, the application of one or the other could be left to the sole discretion of the seller of the product.

More information and transparency in online shopping and door-to-door selling

The second major amendment to the General Consumer and User Protection Act this year was the publication of Royal Decree-Law 24/2021 of 2 November. This amendment will enter into force on 28 May 2022 and specifically concerns the regulation of online sales practices and door-to-door selling.

The main changes provided for in this legislative update are as follows:

  • In all cases where search results are provided on goods or services offered by companies, the trader is must provide the criteria taken into account in ranking the results and their relevance (e.g., in the case of an Internet search engine).
  • Obligations have also been added for the trader in terms of information and transparency. Basically, it should be possible to search for goods and services on the basis of a query by keyword, expression, or other data type.
  • If reviews of products or services are provided, it should be indicated whether these are guaranteed to be from consumers who have actually purchased the product (this is intended to address the growing problem of fake reviews on the Internet ).
  • A whole new consumer sanctioning system has been established, which is one of the most extensive amendments, covering the following aspects:
  • New consumer offences have been established, classified as minor, serious and very serious. A distinction has been made between offences that are a health hazard (referred to Law 14/1986 of 25 April 1986, on General Health), and other offences.
  • Penalty amounts have been updated, which can reach 1,000,000 euros for very serious infringements (penalties for minor infringements range from 150 euros to 10,000 euros; penalties for serious infringements range from 10,001 to 100,000 euros; and penalties for very serious infringements range from 100,001 to 1,000,000 euros).
  • The amount of the unlawful profit made as a result of the infringement is estimated in order to determine the penalty applicable. For example, a minor infringement would carry a penalty of between 150 euros and 10,000 euros, but it has been provided that these amounts may be increased to between two and four times the unlawful profit made.
  • The undertakings concerned are obliged to publicise the penalty resolutions. The aim is to promote the dissuasive nature of consumer sanctions.
  • The regulation of the right of withdrawal period has been amended from 14 calendar days to 30 calendar days for contracts concluded in the context of unsolicited home visits or trips organised to promote or sell goods or services.
  • Remedies for consumers who have been subject to unfair commercial practices have also been incorporated, including termination of the contract and compensation, the amount of which varies according to the infringement.

Although these legal changes may initially cause some confusion, they should be warmly welcomed by consumers and businesses alike. Not only do they bring the Spanish legal framework into line with European standards on consumer and user rights, but they also set clearer rules for those products, services and commercial practices that have emerged as a result of the rise of the digital market.

Problems with a purchase made on the Internet? Get information and assert your rights!

Why is it important to engage a lawyer to draft or review a contract?

draft or review a contract

A contract is a legally binding document that lays out rights and obligations for all the parties involved. Unfortunately, it is very common for a contract to be drafted by a non-professional based on a standard template or, worse still, adapted from an existing contract. This is a highly undesirable practice that can have serious consequences. Do you know why?

A contract is a legal agreement, usually in writing (although it may also be verbal) between two or more parties that must have the legal capacity to be bound by it, which creates rights and obligations for both parties. This is an essential element in the Spanish legal framework, but it is not always given the importance it deserves in terms of its potential legal consequences, which may be detrimental to some of the parties concerned.

When preparing a contract, there are three widespread bad practices:

  1. Entrusting the drafting of the contract to a person who does not have the appropriate legal training or is not a specialist in the field (e.g. commercial law or property law ). A typical case is that of a salesperson drawing up a contract with a customer, or a property salesperson drawing up a lease agreement.
  2. Using an existing similar contract as a starting point and adapting it to the new conditions and needs of the legal transaction to be carried out. For example, a company may use a contract signed with one supplier as a basis and modify it for use with another supplier.
  3. Using a contract template (obtained from the Internet or other sources) which has not been specifically drafted for the case in question. A common example is an online shop or online business that ‘copies’ the terms and conditions of sale from a similar website (and often does not even ensure that all references to the other company have been removed).

All of these practices are mistaken because every legal transaction is different. No two contracts are the same. The parties are often not the same, and there are always variations, however small, in the purpose, the price, the method of payment, or any other of the conditions involved. Therefore, the provisions of a contract created at a given time are only valid for those parties, at that time and under those conditions, but not for other cases. 

Similarly, all clauses in a contract have their meaning and their raison d’être. They cannot be removed or ‘chopped up’ because someone does not understand them or considers that they do not apply to the case at hand. In doing so, an essential clause may be accidentally deleted, or one that is legally required for the contract to be valid may be omitted. As a result, the best-case scenario may that the contract is void because it does not comply with the law; in the worst-case scenario, it may leave your legal interests unprotected.

Why have a lawyer draft or review a contract

When you have a toothache, you go to the dentist and you don’t try to pull the tooth out yourself; if your car breaks down, you take it to the mechanic and you don’t try to repair it yourself. So why is it that if when one needs to sign a contract, such a major legal act, one tends to think that it is not necessary to retain a lawyer? How is this different from other situations where one usually relies on an expert?

The truth of the situation is that by trying to save the money involved in having a lawyer prepare or review a contract, much higher costs may need to be paid later if problems arise. For example, if it turns out that a contract has been poorly ‘done’, essential items are missing, or the terms have not been properly defined. 

If you need to draft a contract, your lawyer will:

  • Carry out an analysis of the legal transaction in order to identify the most important aspects.
  • Take into account all the laws applicable to each individual situation.
  • Draw up a tailor-made contract specifically adapted to the situation.
  • Ensure that your interests are defended.
  • Prevent the inclusion of unfair terms or errors that may invalidate it.
  • Ensure that the contract complies with applicable laws and regulations.
  • Ensure that future contingencies are covered and include the necessary safeguards.

No matter how well you know your sector or how many similar contracts you have seen, a law professional is always aware of all the necessary aspects to be covered and can consider the important factors involved in each specific case that you may not have taken into account. A lawyer will never merely adapt a contract template found on the Internet or ‘copied’ from another existing contract.

Similarly, if you need to have a contract reviewed, your lawyer will:

  • Explain the contents of the contract to you and make sure you understand it.
  • Ensure that the contract is fair to both parties.
  • Identify possible unfair terms, or terms that may be beneficial to the other party and detrimental to you.
  • Confirm whether the contract is lawful and consistent with applicable laws and regulations
  • Propose relevant and properly drafted amendments.
  • Incorporate the necessary safeguards in the event that disputes arise.

A contract should ideally be reviewed prior to signature, as understanding the full content of a legal document is essential before entering into it. Only if you are aware of the legal scope of all the clauses can you make an informed decision as to whether it is appropriate to sign the contract or not. But even if you have already signed a contract but are unsure of its terms, asking a lawyer to review it can help you identify problematic issues and take appropriate steps to defend your interests. 

Do you need a lawyer specialising in litigation, bankruptcy, commercial or property law to draft or review a contract before or after signing it?    I can help you!