Consumer protection on distance contracts: Pre-contractual information obligation and right to withdraw

Distance contracts are onerous consumer contracts between consumer and trader that are concluded with or through distance selling schemes (or systems) without the simultaneous and mutual physical presence of the parties, with the exclusive use of one or more means of distance communication, both during the negotiation process and including the time at which the consumer contract is actually concluded. In accordance with this, distance contracts refer to a way to conclude contracts; and not to a special type of consumer contracts concerning their content or subject. This definition stands for both Turkish law and EU law. With distance contracts, the consumer can obtain the goods or services they need or want, without having to physically go to the trader's business or leave their home, via distance communication tools such as telephone, computer, e-mail, or smartphone applications. This brings comfort to consumers who are in need of consuming every day. Now, consumers can conclude a variety of contracts rapidly and efficiently. Nevertheless, this also causes some risks to the consumer. The fact that consumers can conclude contracts within distance by using means of distance communication without having the necessity to visit a trader's business places also means that concluding the contract without having the opportunity to inspect or experience the subject of the contract with five senses and gather enough information about the contract itself, assess the actual value of the contract and compare it with others. This leads to a situation where consumer concludes distance contracts only with the information provided to them by the trader. On the other hand, it is highly possible that traders may refrain from disclosing certain information or provide only specific types of information in order to increase sales. Additionally, due to not having simultaneous physical existence with each other, the consumer may not be able to collect information about the trader itself. One must also consider that, as a general acceptance of consumer protection law, the consumers are already weaker compared to traders, meaning the consumer concludes distance contracts only with the information provided by the trader, who is the stronger party of the bargain. Therefore, informational asymmetry occurs while consumers conclude distance contracts. As a result, it is necessary to protect the consumer who is a party to the distance contracts since the consumer does not have the opportunities to gather information properly and realize the actual value of the goods or services while, in contrast, having the opportunity to conclude contracts quickly. Such protection is aimed to be sustained via providing pre-contractual information about the contract to the consumer and the right of withdrawal. By putting the trader under the obligation to provide pre-contractual information, consumers are aimed to be protected even before the consumers undertake any contractual obligation; while on the other hand, the right of withdrawal is a post-contract protection measure. Therefore, it appears that these two legal concepts are complementary to each other when it comes to consumer protection. Generally, the source legal act of "the Code regarding Consumer Protection numbered 6502 (CPL)," which is the primary legal act regarding the protection of the consumer in Türkiye, is the relevant regulations and directives of the European Union. Accordingly, art. 48 of the CPL and "Distance Contracts Regulation (DCR)" are two primary legal sources under Turkish law regarding consumer protection on distance contracts, which were enacted under the influence of the EU's "Consumer Rights Directive numbered 2011/83/EU (CRD)". There is a significant similarity between these two legal acts, although some differences can also be easily detected. It is widely accepted that the CRD is a directive in which the regulator of the EU chose "maximum harmonization" approach, as CRD was enacted based on the art. 114 of the Treaty on the Functioning of the EU. In this framework, although the main focus of our study is to examine the protection of the consumer on consumer contracts via pre-contractual information obligation and right of withdrawal, due to the fact the CRD is a maximum harmonization directive and the CPL transposed the CRD, rules established under the CRD are also examined, from time to time, where it is necessary, in order to explain and develop the scope of consumer protection under Turkish law. Art. 48 of the CPL specifies the elements of a contract that will be considered within the concept of distance contract. According to the art. 48 of CPL, elements of distance contracts are as follows: (i) a contract between consumer, which may be both natural or legal person as opposed to the definition given under CRD, and trader, (ii) the use of means of distance communication, (iii) the existence of a system for the distance marketing and/or selling of goods or services that is used to both negotiate and conclude the contract, (iv) the lack of simultaneous physical presence of the parties, through the time, including the negotiation and bargaining process of the distance contract, and (v) the subject of the contract must be about the sale of goods or supplying of services. The concept of distance contracts is related to the method of establishing contracts. Therefore, typical or atypical, many contracts can be considered distance contracts. Art. 2/2 of DCR and art. 3/3 of CRD states the types of contracts that cannot be concluded as distance contracts. Furthermore, some types of contracts cannot be concluded at a distance due to their nature. This includes contracts that need to be finalized before public officers since it requires parties' simultaneous physical presence at the time of conclusion. The pre-contractual information obligation aims to help the consumer to establish the distance contract in a rational and healthy manner by eliminating the risks and dangers arising from the informational asymmetry to which the consumer is exposed, or at least limiting its impact as reasonably as possible. Only the consumer, who is sufficiently informed and enlightened about the terms of the contract, will be able to act rationally. With pre-contractual information, it is also aimed to create a virtual environment, as if the consumer goes to the business place of the trader to purchase the goods or services. The comprehensibility and readability of the method used by the trader while providing pre-contractual information to the consumer should be evaluated by taking the average consumer into consideration. In addition to this, in order for the pre-contractual information provided to the consumer to be considered clear, simple, and readable, it is important that the consumer is not provided with more information than necessary. Otherwise, rather than protecting the consumer, it defeats the purpose of pre-contractual information obligation. Under Turkish law, as a rule, the pre-contractual information obligation must be fulfilled before the conclusion of the distance contract. However, the trader is not obliged to fulfil responsibility for a certain or a reasonable time in advance. Therefore, it seems enough, even if the trader informs the consumer right before the conclusion of the contract. However, in some cases, due to the nature of the means of distance communication used to conclude the distance contract; it is permitted to complete the preliminary information obligation even after the conclusion of the contract, on the basis that certain information stipulated in art. 5/1 of the DCR (Art. 6/1 of the CRD) has been provided to the consumer before the conclusion of the distance contract. These cases are set forth in art. 6/3 and Art. 6/4 of the DCR. An order of importance has been created for some types of distance, such as contracts concluded through a means of distance communication which allows limited space or time to display the information. Therefore, the types of information mentioned under art. 6/3 and 6/4 of the DCR are deemed sufficient for enlightening the consumer to make rational and healthy decisions. Under Turkish law, failure to fulfil the informational obligation does not affect the validity of the distance pursuant to art. 4/1 of the CPL. Furthermore, there is no sanction foreseen for this failure, neither under art. 48 of the CPL, the DCR, and the CRD. Therefore, failure to fulfil the pre-contractual information in distance contracts does not directly affect the validity of the contract. That being said, some terms of distance contracts concluded without pre-contractual information obligation may be considered unfair terms within the framework of art. 5 of the CPL. In this case, the consumer may claim that the distance contract is null and void, if the other conditions required under art. 5 of the CPL are also present, by claiming that his/her decision is affected while concluding the contract. Pursuant to art. 7/1 of the DCR, the trader shall acquire confirmation from the consumer that the pre-contractual information is fulfiled, a concept that is not established under CRD. If such confirmation is not obtained, then it shall be deemed that the contract has never been concluded in the first place. Along with the pre-contractual obligation information of the consumer in distance contracts, another important concept that protects the consumer is the right of withdrawal. By granting the right of withdrawal to the consumer in distance contracts, the consumer, who should normally be bound by the terms and conditions of the contract established by the principle of pacta sund servanda, is allowed to get rid of his/her contractual obligations without any cause. In terms of distance contracts, the right of withdrawal is recognised since the consumer lacks the opportunity to examine, review and determine the actual value of the goods or services subject to the contract before concluding the distance contract. In fact, by granting the right of withdrawal, just as in the pre-contractual information obligation, it is aimed to approximate the positions of the consumer who concludes the contract at a distance from the consumer who actually goes to the store. The right of withdrawal is a formative right that terminates the distance contracts reciprocally. The right of withdrawal is granted to the consumer in order to prevent the consequences arising from the nature of the distance contract against the consumer, which disrupts the fairness and equality of the contract, damaging the principle of pacta sund servanda. This approach should proportionally limit the concept of withdrawal rights. The right of withdrawal should not be interpreted in a way that puts the consumer who establishes the distance contracts in a better position than the consumer who physically goes to the store. For this reason, the exercise of the right is only possible for short periods of time. Pursuant to art. 48 of the CPL and art. 9 of the CRD, the consumer, shall exercise the right of withdrawal in fourteen days. Additionally, according to art. 9 of the DCR and the art. 9/2 of the CRD, while the fourteen days right of withdrawal period for distance contracts regarding the delivery of goods starts from the delivery of the goods; for distance contracts regarding the provision of services, it starts from the establishment of the contract. The consumer can exercise the right of withdrawal before the delivery of the goods. With the exercise of the right of withdrawal, the contracting parties have a mutual duty of restitution. According to art. 12 of the DCR, the trader shall return all payments received from the consumer, including the costs of returning the goods, within fourteen days after the trader is informed about the withdrawal; on the contrary, according to art. 13 of the DCR, the consumer is obliged to return the goods to the trader within ten days after the consumer has directed the withdrawal notification to the trader. The provisions of Articles 12 and 13 of the DCR that establish the scope of the duty of restitution of the trader partially differ from art. 13 and 14 of the CRD. Pursuant to art. 14/1 of the CRD, unless the trader has offered to collect the goods himself/herself, the consumer is responsible for the cost of returning goods; while according to art. 12/3 of the DCR, as a general rule, the trader is responsible for the cost of returning goods. Pursuant to Articles 13/2 and 14/2 of the DCR, if the consumer has used the goods in a manner exceeding the customary use of the goods within the right of withdrawal period and, as a result, the value of the goods has decreased, the consumer is obliged to compensate for this. However, in order for this responsibility to arise, the consumer must have been informed in advance in this respect. What should be understood by customary use is the review and examination actions that may be performed by the consumer to understand the functioning and technical features of the goods as if the goods are purchased by going to the store. Although the right of withdrawal is the most important institution that protects the consumer in distance contracts, granting the right of withdrawal to the consumer for every distance contract does not serve its purpose. For these reasons, within the framework of art. 15 DCR and art. 16 CRD, the cases where the consumer is not granted the right of withdrawal are clearly set forth.