Coronavirus: Legal risks associated with switching to online retail or delivery services

The coronavirus/COVID-19 has become noticeably present in Germany. Empty streets and officially ordered measures such as restrictions on opening hours or closures are placing considerable strain on brick-and-mortar retailers. One means of mitigating the severe economic consequences is rapid conversion to online retail or the offering of a delivery service. However, in the course of this conversion, certain legal aspects must be observed, which we inform you about here.

The rapid conversion of brick-and-mortar retail to e-commerce or the offering of a delivery service can be a real opportunity for affected entrepreneurs to secure their business even in times of crisis. Retailers are not only faced with logistical challenges, however, as they must also comply with the legal regulations applicable in online retail. For regardless of the current exceptional situation due to the coronavirus epidemic or COVID-19, the legal framework for distance selling contracts continues to apply.

Conversion to online retail or delivery services

Distance selling contracts are subject to a number of special provisions, which in particular may well be new for retailers who have so far only operated in brick-and-mortar retail. A distance selling contract is a contract concluded entirely by means of electronic communications (in particular via website, telephone or e-mail), under which a trader undertakes to supply goods or provide services to a consumer.

This contract type thus includes the "classic" online business, in which the consumer's order is placed via the website or e-mail or similar. Delivery services may also be subject to the information requirements in distance selling transactions. While not essential, the inclusion of general terms and conditions in contract formation is nevertheless very sensible.

Extensive information obligations in the event of conversion to online retail

Distance selling contracts are subject to a number of pre-contractual and contractual information obligations. These obligations result from several legal sources (including the Bürgerliches Gesetzbuch, Telemediengesetz, Preisangabenverordnung), such that the inexperienced retailer can quickly lose track. Retailers operating in distance selling must inform customers, for example, of their identity and address, the essential characteristics of the goods or services, how the contract is concluded, and the consumer's right of withdrawal or return.

Further information obligations that may apply to online retailers (not exhaustive):

• Statement of the total price together with its component parts
• where applicable, statement of unit prices
• shipping/delivery costs and sales tax incurred
• Information on the time, manner and mode of formation of the contract
• Information on the details regarding payment and delivery or performance
• legally compliant notice of the right of withdrawal available to consumers and its specific characteristics

Moreover, there are numerous further information obligations that online retailers and delivery services must observe.

These obligations imposed on retailers operating in distance selling serve to enable the consumer to make an informed and rational decision regarding contract formation. However, it is clear that in online business, these comprehensive information obligations can present considerable difficulties for inexperienced retailers.

Avoid costly cease-and-desist letters!

If the information obligations imposed on online retailers are not fulfilled, expensive competition law cease-and-desist letters may be threatened, including the initiation of legal proceedings. In particular in the fiercely competitive online business, competitors' tolerance of breaches of statutory obligations is often low. Competition law disputes are likely to increase further for many businesses due to the currently strained economic situation. Accordingly, competitors are likely to be particularly "cease-and-desist-happy" in order to protect their own competitive position. In online retail, therefore, the maxim applies: prevention is better than cure!

Our offering for (prospective) online retailers

We have advised companies for many years on all legal matters in connection with e-commerce, including through advice regarding information obligations or drafting of contract texts/terms and conditions. In addition, we pursue breaches of law by competitors for you, which for example infringe competition law.