Distribution
General Terms and Conditions of Sale in Distance Selling
General Terms and Conditions of Sale (GTC) are a fundamental pillar of distance selling. They set out the rules between the seller and the customer, from the transaction through to post-sale obligations. Between business operators, the mandatory particulars are those set out in Article L. 441-1 of the French Commercial Code
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General Terms and Conditions of Sale (GTC) are a fundamental pillar of distance selling. They set out the rules between the seller and the customer, from the transaction through to post-sale obligations. Between business operators, the mandatory particulars are those set out in Article L. 441-1 of the Commercial Code. In the context of distance sales, GTC govern the key aspects of commercial relationships, ensuring transparency and protecting the interests of both parties. They are intended for various types of customers such as wholesalers and retailers. I. Mandatory elements of GTC in distance sellingA. Elements relating to payment
- Price schedule and discounts
The price schedule, together with any applicable discount, must be expressly stated in the GTC. Such discounts may take the form of annual volume rebates (RFA) or unconditional reductions.
- Payment terms
The GTC must specify the terms under which the customer is to make payment.
- Methods of payment
The GTC must also set out the accepted methods of payment, such as cheque, bank card or instalment payment.
- Early payment discounts and their statement in the GTC
Where early payment discounts are provided for, they must be indicated in the GTC. B. Elements relating to late payment
- Interest rate of late payment penalties
The interest rate applicable in the event of late payment must be stipulated in the GTC. Between business operators, this is governed by Article L. 441-10 of the Commercial Code, which provides that: Unless otherwise stipulated, which may not however set a rate lower than three times the statutory interest rate, this rate is equal to the interest rate applied by the European Central Bank to its most recent refinancing operation, increased by 10 percentage points.
- Fixed-sum indemnity for recovery costs
The fixed-sum indemnity due in the event of late payment must also be specified. This indemnity is 40 euros per invoice (Articles L. 441-10 and D. 441-5 of the Commercial Code), but these recovery costs may exceed this fixed sum provided that the party claiming more than this amount furnishes proof of its loss.
- Risks associated with non-compliance with these conditions
Non-compliance with these conditions may expose the business to fines of up to 75,000 € for a sole proprietorship or 2,000,000 € for a company (Article L. 441-16 of the Commercial Code). C. Elements relating to the conditions of sale
- Conditions for transfer of ownership
The conditions under which the product becomes the customer's property must be set out in detail in the GTC.
- Delivery conditions
The delivery conditions, including time frames and arrangements, must also be clearly defined. Reference may be made to the Incoterms in order to manage these stipulations. To find out more, you may consult this article from the French customs authorities.D. Elements relating to the legal warranty
- Warranty against latent defects
The legal warranty against latent defects, which protects the buyer against non-apparent defects, must also be mentioned (Article 1641 of the Civil Code).
- Information required regarding the professional providing the warranty
The GTC must also provide precise information on the business operator that warrants the goods, including its postal and telephone contact details, its e-mail address and any other means of communication enabling a request for the implementation of the warranties. E. Elements relating to the right of withdrawal
- Withdrawal period and its starting point
The GTC must specify the 14-day withdrawal period, which runs from the day following receipt for the sale of goods. The right of withdrawal between business operators, initially provided for consumers, applies to business operators (Article L. 221-3 of the Consumer Code) where: - the contract is concluded off-premises; - the subject matter of the contract does not fall within the company's main field of activity; - the company's number of employees is less than or equal to five.
- Withdrawal arrangements
The arrangements enabling the customer to withdraw after concluding the distance sale must be clearly defined.
- Refund procedure
In the event of withdrawal, the business has 14 days to refund all sums paid by the customer.
- Exceptions to the right of withdrawal
Certain exceptions to the right of withdrawal exist and must be mentioned, such as for personalised or perishable products, video cassettes, CDs and DVDs where they have been unsealed by the consumer, and the press. II. Specific case: sale of food productsA. Obligation to provide information on the composition of the product When selling food products, the GTC must contain information on the composition of the product. This information is provided for in Article L. 441-1-1 of the Commercial Code, but concerns only certain categories of food products. B. Logistics penalties These are governed under Article L. 441-17 of the Commercial Code, but the adversarial mechanism may already be framed in your GTC. C. Price & Price renegotiationArticle L. 441-8 of the Commercial Code provides that renegotiation may be requested where certain conditions are met. Furthermore, as early as the GTC, you must specify the indicators that have an impact on the prices of your food products as well as a method for taking these indicators into account in accordance with Article L. 443-4 of the Commercial Code. III. ConclusionA. Summary of the key points GTC in distance selling govern the key aspects of commercial transactions, from price to payment, including delivery conditions and warranties. B. Importance of complying with legal obligations regarding GTC Compliance with legal obligations regarding GTC is essential to avoid disputes and potential fines. Particular care must be given to the transparency and clarity of the information provided in the GTC. Do not wait any longer to ensure the compliance of your General Terms and Conditions of Sale in distance selling. Put in place clear, precise GTC that comply with legal obligations in order to protect your business and offer a secure purchasing experience to your customers. Remember, well-drafted GTC are the foundation of a trusting customer relationship. So, act now to strengthen your distance selling activity. Contact us today for a personalised consultation and for assistance in drafting your GTC.
To learn more
Are GTC mandatory in distance selling?
Between business operators, the communication of GTC is mandatory to any buyer who requests them, with the particulars set out in Article L441-1 of the Commercial Code. Towards consumers, pre-contractual information is required by the Consumer Code. Beyond the legal obligation, GTC secure the relationship and prevent disputes.
What particulars are mandatory in GTC between business operators?
The GTC must specify the price schedule and discounts, the payment terms and methods, early payment discounts, late payment penalties, the 40-euro fixed-sum recovery indemnity, the conditions for transfer of ownership and delivery, as well as the legal warranties. These particulars derive in particular from Article L441-1 of the Commercial Code.
What late payment penalty rate should be provided for in the GTC?
Between business operators, the rate may not be lower than three times the statutory interest rate. Failing any stipulation, it is equal to the European Central Bank refinancing rate increased by 10 points. The GTC must also mention the 40-euro fixed-sum recovery indemnity per invoice, provided for by the Commercial Code.
What are the risks of failing to comply with the mandatory particulars of the GTC?
Failure to comply with the rules on payment terms and penalties exposes the business to fines of up to 75,000 euros for a sole proprietorship and 2,000,000 euros for a company, under Article L441-16 of the Commercial Code. Compliant GTC are therefore as much a protection as an obligation.
Does the right of withdrawal apply between business operators?
Yes, under certain conditions. Initially provided for consumers, the right of withdrawal also applies to the business operator where the contract is concluded off-premises, where the subject matter of the contract does not fall within its main activity and where its workforce is less than or equal to five employees, under Article L221-3 of the Consumer Code.
What withdrawal period applies to the distance sale of goods?
The period is 14 days. For the sale of goods, it runs from the day following receipt of the goods by the consumer. The GTC must clearly inform the customer of this right and of the arrangements for exercising it. Defective information considerably extends this period.
Must the warranty against latent defects be mentioned in the GTC?
Yes. The GTC must provide information on the legal warranty against latent defects, which protects the buyer against non-apparent defects rendering the goods unfit for their use, in accordance with Article 1641 of the Civil Code. They must also indicate the contact details of the business operator providing the warranty so as to enable the implementation of the warranties.
Are specific GTC needed for distance selling?
Yes. Distance selling adds its own obligations: enhanced pre-contractual information, the right of withdrawal, and adapted delivery and payment arrangements. Generic GTC do not cover these particularities. They must be calibrated to the sales channel and the type of clientele, whether business or consumer.
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