IDP (Jul 2016)
Breach of information duties in the B2C e-commerce: adequacy of available remedies
Abstract
B2C e-commerce is characterised by the information asymmetry between the contracting parties. Various information duties are imposed on traders, both at the European and national level to correct this asymmetry and to ensure proper market functioning. The mandated disclosure is based on the assumption of consumers' rationality. However, developments of behavioural economics challenge this assumption. The utility of mandated disclosure in consumer contracts depends also on the remedies available to consumers in a case of breach of information duties. Those remedies are often heavily influenced by the national general private law applicable to the contractual relationship between the parties. Nevertheless, since the economics of general contract law differ importantly from principles of consumer e-commerce, various problems can be associated with the application of general law remedies to the breach of information duties in B2C contracts. The limited value of the majority of the online B2C transactions is incompatible with costly and lengthy court proceedings. Moreover, breach of information duties will often not produce enough material damage on the side of the consumer to make the remedies available. Different solutions are explored, from ADR, to the duty to advise, to non-legal mechanisms making the information easier to use for consumers throughlimiting disclosure. Finally, the right of withdrawal is analysed as an example of a specific remedy, adapted to the economics of the B2C electronic transactions, where the aims parties pursue through contracts are different than in commercial contracts, and their relationship is marked with the inequality of economic power and information asymmetry. However, the legally established cooling-off period is not free from limitations, and only a combination of various measures, including effective remedies for breach of information duties, will help develop the potential of the B2C e-commerce within the European internal market.
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