Why the Law Regulates Online Store Terms
E-commerce terms and conditions are the document every trader offers to consumers in online trade, and it is precisely in this document that clauses effectively stripping consumers of their rights are often hidden. Terms drafted unilaterally in advance and offered to the consumer on a take-it-or-leave-it basis require special legal control. The Georgian Law on Protection of Consumer Rights exercises this control in several directions: Article 21 establishes the rules on standard terms, Article 22 defines the invalidity of unfair terms, and Article 23 sets out the exceptions to that invalidity, while Articles 11, 12 and 13 govern off-premises and distance contracts, including the trader's information duties and the consumer's right of withdrawal. Understanding this framework allows both traders drafting their terms and consumers facing unfair clauses to assess the situation correctly.
What Counts as a Standard Term
Under the law, a standard term of a contract is a term established by the trader for the consumer, pre-formulated and intended for repeated use, which the consumer had the opportunity to familiarise themselves with. An online store's terms and conditions are exactly such a collection of standard terms. If a trader claims that a particular term was individually negotiated between the parties, the trader must prove it: the burden of proof lies on the trader. Standard terms offered to the consumer in writing must be drafted in simple and understandable language, and any term that allows more than one interpretation is construed in the consumer's favour. This means that vague wording is the trader's problem, not the consumer's, and an ambiguously drafted clause cannot be used against the person it was addressed to.
Unfair Standard Terms Are Void
An unfair standard term is void notwithstanding its inclusion in the contract if it contradicts the principles of trust and good faith and causes a significant imbalance in the parties' rights and obligations to the consumer's detriment, including through ambiguity. When assessing unfairness, the subject matter of the contract, the circumstances existing at the time of conclusion that led to the inclusion of the term, and the other terms of the contract are taken into account. The law directly names the clauses that are always void:
- excluding or limiting the trader's liability for the consumer's death, damage to health or other loss caused by gross negligence, where this resulted from the trader's act or omission;
- unjustifiably restricting the consumer's right to bring a claim against the trader or a third party for non-performance or defective performance, or excluding the set-off of claims;
- entitling the trader to retain sums paid by the consumer where the consumer refuses the contract and what the consumer receives is not commensurate with that sum;
- granting the trader a unilateral right to withdraw from the contract in situations where the consumer has no equivalent right;
- automatic extension of a fixed-term contract without the consumer's consent, or setting an unreasonably short period for expressing the will to terminate or continue;
- setting the price at the moment of delivery or increasing it so significantly that the consumer is deprived of the opportunity to withdraw;
- restricting the consumer's access to legal protection, including forcing disputes exclusively into foreign arbitration or restricting the ability to obtain evidence.
The invalidity of an unfair term does not automatically invalidate the remaining parts of the contract, provided the term is not essential and the contract can reasonably be presumed to have been concluded without it. Article 23 also provides exceptions: certain terms of financial services contracts, including changes to interest rates or commission for justified reasons, are not considered void if the trader immediately informs the consumer, who then has the right to withdraw. A different regime also applies to prices linked to stock exchange quotations or foreign currency markets, which the trader cannot control.