Contracts Outside Commercial Establishments: Spain
Contracts Outside Commercial Establishments (Arts. 107-113 LGDCU)
Contracts concluded away from business establishments are not, in themselves, illegal business practices. However, the initiative of the employer and non-comparability by consumers of the quality and price of the offer can lead to unfair trade practices. Additionally, these negotiations are often carried out in haste, often involve a surprise element, and the cost of the contract is usually very high, which discourages consumers from litigating.
Status of Contracts Concluded Away from Business Establishments
Contracts concluded away from business establishments include those concluded:
- Outside the business premises of the employer, or a third party acting on their behalf.
- In the consumer’s home (or another consumer’s home).
- In the consumer’s workplace, unless the visit of the employer (or their representative) was specifically requested by the consumer, takes place at the established time (or a reasonable time thereafter considering the nature of the contract and its price), and is conducted according to a previously established order.
- On public transport.
Contract offers issued by a consumer under any of the aforementioned circumstances are also subject to this special legal regime (art. 107 LGDCU).
Exclusions (Art. 108 LGDCU)
Article 108 of the LGDCU excludes certain contracts from the special arrangements for contracts concluded away from business establishments. These include:
- Contracts where the total payable by the consumer is less than €48.08.
- Distance contracts (as they have their own protection system).
- Contracts for the construction, sale, and leasing of real estate (due to specific regulations like RD 515/1989). This also includes contracts related to other rights in such property, and construction contracts related to the building’s structure. While the EU directive included repair contracts, the Spanish legislature has not explicitly done so, but authorized doctrine suggests they fall under this area.
- Insurance contracts [Art. 83rd of the LCS grants a 30-day period after policy delivery for policies longer than 6 months to resolve the contract, with a refund of the paid premium, excluding the portion corresponding to the contract’s effective period].
- Agreements concerning securities (due to specific legislation and the required speed of these operations).
- Notarial contracts (due to the notary’s advice and information provided to consumers).
- Contracts for food, beverage, and other consumable products currently used in the home.
- Catalog sales if they meet the other established circumstances (catalog contracts are a form of distance contract covered in Arts. 38 to 48 LOCM).
Right of Withdrawal (Art. 110 LGDCU)
The most notable aspect of the special arrangements for contracts concluded away from business establishments is the concession to the buyer of a right of withdrawal (Art. 110 LGDCU). This right must be exercised within seven calendar days from receipt of the document of withdrawal. The contract must be made in writing, in duplicate, and accompanied by a withdrawal document. This document must state, in prominent characters and immediately above the consumer’s signature, a clear, understandable, and precise reference to their right to cancel the contract, along with the requirements and consequences of exercising this right (Art. 111).
To further strengthen consumer security, the Act provides that the employer on whose behalf the act is performed and the agent, broker, or representative who has acted on their own behalf are jointly liable for the obligations related to this selling arrangement (Art. 113).