An Entrepreneur Protected Like a Consumer: E-commerce Must Prepare for Changes

Because of the coronavirus pandemic, many entrepreneurs have been forced to "move" their business "online", where they provide services or sell goods at a distance. The pandemic has also affected the entry into force of provisions that in some situations give entrepreneurs the same protection as consumers. The legislature has changed the date of entry into force of provisions originally due to apply from 1 June 2020. The provisions will enter into force on 1 January 2021, which means that the e-commerce sector still has more than six months to implement solutions ensuring that its business complies with the applicable regulations: the Act of 23 April 1964, the Civil Code ("CC"), and the Act of 30 May 2014 on Consumer Rights ("CRA").

1. The Quasi-Entrepreneur: No Longer an Entrepreneur, Not Yet a Consumer

The legislature's intention in introducing these changes was to reach a situation in which merely issuing an invoice for goods or a service in the name of a business would not be equivalent to accepting that the transaction took place between professional entities on each side of the contract. The key question would be whether the contract falls within the sector or specialisation of the entrepreneur concerned and is of a professional nature for that entrepreneur. If not, the legislature considers that the entrepreneur has de facto the same knowledge of the goods or service as a consumer, and in such cases will therefore enjoy the same protection even where an invoice is issued for the goods or service.

On 1 January 2021, therefore, a new group of "quasi" entrepreneurs will come into being (a group between consumers and entrepreneurs). The provisions introduced by the amendment will apply to:

a natural person concluding a contract directly connected with their business activity,

where the content of the contract shows that it is not of a professional nature for that person, arising in particular from the subject of the business activity they conduct, as made available under the provisions on the Central Register and Information on Economic Activity (CEIDG).

2. Protection for the Quasi-Entrepreneur

The changes intended to align the position of entrepreneurs with that of consumers will concern the following cases:

1. the ability of a quasi-entrepreneur to bring a claim for a given contractual provision to be held prohibited (new Article 385⁵ CC),
2. a wider catalogue of quasi-entrepreneur rights in connection with claims under statutory warranty (rękojmia) (new Article 556⁴, Article 556⁵ and Article 576⁵ CC),
3. the right of a quasi-entrepreneur to withdraw from a contract concluded at a distance or off business premises without giving a reason (new Article 38a CRA).

Entrepreneurs enjoying the protection granted in this way would not, however, be covered by the institutional consumer protection provided by the President of the Office of Competition and Consumer Protection (UOKiK) and district consumer ombudsmen.

3. What Did the Legislature Fail to Foresee?

The explanatory memorandum to the act amending the Civil Code sought to highlight that the proposed solutions aim to protect quasi-entrepreneurs, who often have the same knowledge as a consumer [for example, an accountant running a business who buys a document shredder on a VAT invoice will probably have the same knowledge as when buying the same device as a consumer "on a receipt"].

However, the legislature did not allow quasi-entrepreneurs to rely on the provision that prevents the exclusion or limitation of statutory warranty. Article 558 § 1, second sentence, CC (Where the buyer is a consumer, limitation or exclusion of liability under statutory warranty is permissible only in the cases specified in special provisions) will therefore continue to apply only to consumers, and in B2B relationships (between entrepreneurs) it will still be possible to exclude or limit statutory warranty.

Next, the legislature completely ignored the fact that the subject of an entrepreneur's business entered in CEIDG often does not match the business that the entrepreneur actually conducts.

The statement in the Act that such a quasi-entrepreneur can be identified "in particular" by the business activity code (PKD) disclosed in CEIDG will certainly not help here. What then if a quasi-entrepreneur wants to exercise their rights, claiming that they do not in fact conduct the business activity disclosed in CEIDG? At present, the only solution appears to be to accept that in such a case the burden of proving that the CEIDG data do not match the actual facts will lie on the quasi-entrepreneur (Article 6 CC). This conclusion is supported by Article 16(1) of the CEIDG Act, which reads: The data entered in CEIDG are presumed to be true. A natural person entered in CEIDG is liable for damage caused by reporting untrue data to CEIDG, if they were subject to mandatory entry at that person's request, and by failing to report data subject to mandatory entry in CEIDG within the statutory time limit or failing to report changes to data covered by the entry, unless the damage resulted from force majeure or solely from the fault of the injured party or a third party for whom the person entered in CEIDG is not liable.

Nor has any limit been placed on the ability of a quasi-entrepreneur to exercise these rights. This means that a quasi-entrepreneur employing 40 employees may enjoy this protection, while a general partnership employing one employee will be denied it. The criteria of the entrepreneur's revenue, the number of its employees or the scale of its business are not taken into account.

4. What Challenges Await Entrepreneurs in the E-commerce Sector?

Above all, it is necessary to change the way of thinking in which the fact that an invoice is issued implies that the party on the other side is an entrepreneur without the protection available to a consumer. From a legal point of view, it is necessary to audit the contracts concluded, the terms and conditions for services provided by electronic means and other internal documents for prohibited contractual provisions (so-called abusive clauses concerning, for example, court jurisdiction or the exclusion of the seller's liability). It will also be necessary to verify whether all information obligations required by statute are fulfilled. For example, if a quasi-entrepreneur is not informed by the entrepreneur of the right of withdrawal, that right will expire only 12 months after the date of the contract (unless this information is provided during those 12 months, in which case the time limit for withdrawal expires 14 days after the quasi-entrepreneur is informed of the right).

Consideration should also be given to mechanisms that make it possible to identify a quasi-entrepreneur before a distance contract is concluded: on the one hand, the seller has to fulfil its information obligations; on the other, the customer should not be put off buying by too many formalities.

The provisions will not apply to contracts concluded before 1 January 2020, which matters for potential claims against entrepreneurs selling goods or providing services at a distance or off their business premises.

Legal basis:

1. Act of 31 July 2019 amending certain acts in order to reduce regulatory burdens (Journal of Laws of 2019, item 1495);
2. Act of 31 March 2020 amending the Act on special solutions connected with preventing, counteracting and combating COVID-19, other infectious diseases and the crisis situations they cause, and certain other acts (Journal of Laws of 2020, item 568);
3. Act of 30 May 2014 on Consumer Rights (consolidated text: Journal of Laws of 2020, item 287);
4. Act of 23 April 1964: Civil Code (consolidated text: Journal of Laws of 2019, item 1145, as amended).