Under the Consumer Rights Directive (and the UK Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013), a trader must ensure that, when a consumer places their order, they explicitly acknowledge that placing the order entails an obligation for the consumer to pay the trader. 

If placing the order involves activating a button or similar function, the trader must label that button or function in an easily legible manner with the words "order with obligation to pay" or a similar unambiguous formulation indicating that placing the order involves an obligation to pay the trader.

This sort of wordy messaging can make for a very elongated order button! So traders usually resort to more succinct messages such as “pay now”. Where there's no immediate obligation to pay - perhaps because there's an initial free trial - the button would obviously need to say something a little different. But what do you say if the obligation to pay is contingent on something else happening - so that if that thing doesn't actually happen there is in fact no obligation to pay anything at all? 

This question arose in a recent case in Germany.

A tenant had rented an apartment and the monthly rent for the apartment was higher than the maximum permitted by national law. Consequently, the tenant asked a debt recovery agency to request his landlords to repay rent overpayments. To engage the debt recovery firm, he placed an order through their website. Before clicking on the order button, he ticked a box to accept the debt recovery agency’s terms and conditions. Under those terms and conditions, tenants must pay the agency a third of the annual rent saved if the agency is successful in reclaiming their rent.

A dispute arose between the debt collection agency and the landlords. The landlords argued that the tenant did not give the service provider proper authorisation to act on his behalf. This was because the order button was not labelled with the words “order with obligation to pay” (or a corresponding formulation), as required by the legislation.

The question then arose as to what should happen when the obligation to pay is subject to satisfying a condition - in this case, payment by the consumer was only required if the trader successfully recovered rental overpayments from the landlord on the consumer’s behalf.

The German courts referred the issue to the CJEU. 

The CJEU ruled that the order button, or a similar function, must clearly indicate that, by clicking on it, the consumer assumes an obligation to pay. This applies even if the obligation to pay depends on satisfying a subsequent condition. Under the legislation, the trader must inform the consumer before they place an online order that when they place the order they will take on an obligation to pay. The trader’s obligation applies regardless of whether the consumer’s obligation to pay is unconditional or whether the consumer is required to pay the trader only after a subsequent condition has been satisfied. If the trader has not complied with its obligation to provide information, the consumer is not bound by the order. However, the CJEU said that there is nothing to prevent the consumer from confirming his or her order regardless.

This is a good example of how strictly the courts interpret the information obligations in the Consumer Rights Directive and in the UK’s Consumer Contracts Regulations. But also that the courts will always consider these sorts of questions in light of the underlying purpose of the legislation - i.e. to achieve a "high level of consumer protection”. 

So there really is very little wriggle room for traders when it comes to things like the order button messaging or, indeed, when providing pre-contract information such as about a consumer’s cancellation rights, or obtaining the requisite consents/requests for providing services during the cooling-off period. It really is a case of dotting all the “i's and crossing all the “t”s. Because getting these things wrong in the terms and conditions and the consumer purchase journey can result in the consumer not being bound and the trader not being paid.