More and more services are being offered via the Internet. This inevitably entails changes in the structure of contracts that have not yet been given much consideration by legislators. A new consumer protection law is now intended to give consumers more rights and safeguards when contracts are concluded online.
How do online contracts come about?
Online contracts are becoming more and more widespread. Previously, it was common to print out contracts, sign them and either send them to the service provider by mail or the scanned paper goes back via e-mail. With new technologies, signing important PDFs is now no longer a problem. .
Various providers are coming up with solutions that will appeal to service providers and consumers alike. For example, Adobe allows forms and contracts to be filled out directly in Acrobat. The signature can then be placed digitally in the corresponding field. The provider also offers watermarks, templates and other functions that simplify the conclusion of contracts.
With other providers, certain data can be filled in automatically. Online contracts generally speed up sales and administrative processes, but they still have to follow a number of rules that were relaunched by the German governments this year.
Stronger protection also for contracts concluded online
The digital world demands new rules. This is once again evident in the case of online contracts, which are now being used more and more frequently. We now show how consumers are to be better protected. The four most important points in the reworked provisions are as follows.
Automated contract extensions
Automatic contract renewals are a well-designed system. In this way, providers of various services try to tie customers to them over a long period of time. The "Fair Consumer Contracts Act", which came into force this year, is intended to put an end to this practice. In many cases, consumers are not even aware of when automatic contract renewal becomes active. Now this is no longer possible for most purchase contracts. Contracts can only be extended indefinitely if customers are given a right of termination of just one month in the same breath. This applies to all contracts valid from March 1, 2022. Only in telecommunications are contracts from December 1, 2021 affected by this new rule.
Notice periods shortened
Long notice periods of up to three months will also be a thing of the past from now on. In general, the periods will be reduced to one month. Only the insurance sector is exempt from this. Here, the regular notice periods apply, as stated in the contract.
The cancellation button
Shopping and concluding contracts is usually the easier way. In this area, service providers are happy to accommodate customers. But if you want to cancel, it's not uncommon for obstacles to be placed in your path. To make it easier for consumers to terminate service contracts in the future, the so-called termination button must now be positioned clearly visible on the website. It must not be placed hidden in a customer area that can only be used by logging in. Once activated by the consumer, the button must receive the relevant notice of termination by e-mail or other messaging service in the shortest possible time.
Need for improvement in telephone contracts
Many complaints have also been received about contracts concluded by telephone. Sometimes the salesperson's persuasion is better than the consumer's ability to say no clearly. To ensure that people are no longer unintentionally talked into a contract in the future, the telephone agreement must now always be submitted in writing. Only when the customer gives his or her okay in writing does the contract become legally valid.
In this way, customers are given enough time to check the terms and conditions and other details before signing off.
Subscription services business model
Subscription businesses have emerged as major players of today's increasingly dynamic digital technology landscape. Contrary to that, subscription models have significant origins. In the UK, people were able to subscribe to deliveries from their milkman from as far back as the 1860s. Magazine subscriptions also began as far back as the late 1800s.Subscription boxes (and other subscription models) are increasingly appealing these days to trendy businesses that want to live on the revolving revenue they get from subscribers. Subbly can help you create subscription based business model for your company.
Fewer mistakes with digital contract management
To avoid signing unwanted or incorrect contracts, or overlooking cancellation deadlines and consumer rights, it's not just now that businesses are recommended to complete contract management digitally. There are a large number of different types of contracts that are used in medium-sized companies, for example. Customer contracts, supplier contracts, contracts for work or even service contracts are only part of the long list.
With the right software solutions, the paperwork goes into the computer. This is good for the environment, which likes to see more paperless contracts concluded, and it also makes the work of the employees involved easier.
The life cycle of a contract
No matter what type of contract it is, the stages are usually the same. After the data has been verified, a contract is signed. This starts the validity period. After one year, the contract is automatically renewed, the customer must agree to the renewal or a cancellation is made.
No matter what type of contract it is, the stages are usually the same. After the data has been verified, a contract is signed. This starts the validity period. After one year, the contract is automatically renewed, the customer must agree to the renewal or a cancellation is made.