A practically important decision in the field of consumer law was issued on 30.05.2024 by the Court of Justice of the European Union ("ECJ") under case C-400/22, Conny. The case was initiated as a result from a reference for a preliminary ruling from the Landgericht Berlin (Regional Court - Berlin) in relation to a dispute pending before it between landlords and Conny, a debt collection services company. Conny proposes to tenants of residences to enter into a service contract, pursuant to which Conny is engaged with the collection of certain outstanding claims of the tenants against the landlords.  

For the conclusion of such contract in this case, the users shall accept Conny's Terms and Conditions in its website and shall click a button, after which the order would be deemed to have been assigned and confirmed. The Terms and Conditions state that, in the event of successful collection of the receivables from the landlords, the tenants should pay Conny a particular amount (consideration for the service provided).

According to Article 8, paragraph 2 of Directive 2011/83/EU on consumer rights ("the Directive"), if a distance contract, concluded electronically, stipulates payment obligation for the consumer, the merchant shall provide to the consumer in a clear and visible manner and immediately before the consumer places his order, certain information (the final price, the duration of the contract, etc.). The merchant must ensure that when placing his order, the consumer explicitly acknowledges that the order involves a payment obligation. If the placing of an order is linked to the activation of a button or similar function, the button or the function shall be legibly marked only with the words “order with payment obligation” or with appropriate unambiguous wording making it clear that the placing of an order results in payment obligation. If the merchant fails to comply with this rule, the contract or order is not binding for the consumer.

Following the execution of such contracts between the tenants and Conny, the latter has carried out its contractual obligations and has filed claims against certain landlords in connection with the tenant’s receivables against them. The judgment of the first instance court upheld the merchant's claims, but was then appealed by the landlords before the Landgericht Berlin based on the argument that the contract between the consumers and Conny was null and void, since it did not comply with the aforementioned rule of the Directive. The thesis of the landlords is the following: if the order is placed by pressing a button, it must be labelled that the order is related to payment of consideration or otherwise shall be indicated that the conclusion of the contract results in obligation for the consumer to pay an amount of money. If this obligation is not fullfiled, the consumer is not bound by the contract.

In the case before the Landgericht Berlin, the key question to be decided is whether the above-mentioned hypothesis should be interpreted as covering cases where the obligation to pay consideration does not arise immediately upon the signing of the contract, but only after the occurrence of a certain condition (in the present case, the tenants' claims against the landlords being upheld as a result of Conny's judicial and extrajudicial proceedings).

This is also the point of reference to the ECJ, which, having considered the particular circumstances of the dispute and the relevant European legislation, held that the applicable provision of Article 8, paragraph 2 of the Directive does not distinguish whether or not the payment which follows from the contract is conditional or not. Regardless of whether the consumer is obliged to pay the consideration directly when the order is placed or when a condition arises – in both scenarios the merchant must comply with the Directive's requirements for indicating the order button.

The ECJ accepts that consumers are bound by the terms of an online contract when they enter into it, and that the merchant should expressly inform them that they will be liable to pay if a condition occurs which is not dependant on their own will. Therefore, by clicking the button, consumers not only enter into a distance contract, but also give their final consent to payment.

The recommendation in this case is that the position held by the ECJ should be taken into account by online retailers in Bulgaria whenever they allow the consumer to assume a certain (conditional or not) payment obligation by pressing a button on their digital platforms.