Consumer law and online ‘order buttons’: Supreme Court takes strict approach with far-reaching consequences

Background 

On 4 October 2024, the Supreme Court ruled in two proceedings concerning the clarity (or lack of clarity) of the text on an order button in online purchases, and the consequences involved. In the first case (ECLI:NL:HR:2024:1355; the text is in Dutch), a consumer had ordered a number of items through online seller bol.com. The order was completed by clicking on a button with the text place order. The consumer was then supposed to pay the purchase price, but failed to do so. Bol.com subsequently went to court. The consumer did not appear in those proceedings. The judgment was therefore rendered in absentia (Article 139 of the Dutch Code of Civil Procedure). 

In the second case (ECLI:NL:HR:2024:1366; the text is in Dutch), a consumer had enrolled online, through the provider’s website, for a physician assistant course. The enrolment process was completed by clicking on a button that said enrol now. At some point, the consumer stopped attending the course, and also stopped paying the tuition fees. The course provider then sued her. In this case, the consumer did appear in the proceedings.

What does consumer law say about the order button?

Consumer law requires that online purchases indicate in “terms not open to misunderstanding and in an easily readable manner” that the consumer is entering into an obligation to pay by placing an order. An order button must state clearly and in unambiguous wording that an obligation to pay arises when the consumer clicks on the button in question. This requirement is met if the button says “order with payment obligation”. This is set out in the so-called ‘order button provision’ in Article 6:230v(3) of the Dutch Civil Code, which implements Article 8(2) of the Consumer Rights Directive (Directive 2011/83/EU). 

The Court of Justice of the European Union (CJEU) previously clarified in its 2022 Fuhrmann judgment (ECLI:EU:C:2022:269) that the text on the button (or on a similar function) is decisive. Other circumstances of the ordering process (e.g. text on the webpage) are disregarded. According to the CJEU, the question is whether the terms used by the seller are “both in everyday language and in the mind of the average consumer who is reasonably well informed and reasonably observant and circumspect, necessarily and systematically associated with the creation of an obligation to pay” (paragraph 33). In other words, the core issue is how these terms are commonly used in everyday life, while taking into account the ‘average consumer’.

In the Netherlands, the CJEU’s judgment gave rise to numerous proceedings about the caption on an order button (an overview can be found in paragraph 3.28 of Advocate General Drijber’s opinion in the bol.com case; the text is in Dutch). Incidentally, these are always proceedings in which the seller, or a debt collection agency, has commenced proceedings against consumers who fail to fulfil their payment obligations. These are therefore not cases initiated by consumers. 

The preliminary questions 

In both proceedings, the same subdistrict court referred preliminary questions to the Supreme Court. In the bol.com case, the subdistrict court asked whether a button with only the caption order, place order or complete order meets the order button provision. It also presented preliminary questions about the legal consequences if an order button does not meet the requirements of Article 6:230v of the Dutch Civil Code. 

A contract entered into by clicking an order button that is unsatisfactory is voidable. The consumer can then decide whether or not he or she wishes to remain bound by the contract. This is to protect consumers from confusing or misleading information in online purchases. Because this concerns mandatory European consumer law, the court must test ex officio (and thus on its own motion) whether the order button provision has been complied with. A consumer is therefore not required to bring this topic to the court’s attention first. This also applies if the consumer does not appear in the proceedings, as in the bol.com case. The subdistrict court asked the Supreme Court whether this means that the court, in in absentia cases, must then automatically void the contract in its entirety or must (or may) void it in part (we will explain the difference below). 

In the course provider’s case, the subdistrict court took the view that the caption register now does not satisfy the order button provision. It then asked the Supreme Court to issue a preliminary ruling as to whether a merchant can claim any compensation if a contract is voided on the grounds of violation of the order button provision and the transaction is therefore reversed. The legal basis for this could be undue payment (Article 6:203 of the Dutch Civil Code), unjust enrichment (Article 6:212 of the Dutch Civil Code), or a right to reimbursement of the value of the performance (Article 6:210(2) of the Dutch Civil Code).

Placing order: insufficiently clear about obligation to pay

In the bol.com case, therefore, the preliminary question is first of all whether the order button complies with Article 6:230v of the Dutch Civil Code (in the other case, the subdistrict court had already made that assumption). In his opinion delivered to the Supreme Court, Advocate General Drijber concluded that the words placing an order in common parlance and in social intercourse clearly have the connotation of paying (paragraph 4.13). Drijber found that these words in everyday language, for online purchases in a web store, make it sufficiently clear to the average consumer that he or she thereby necessarily enters into an obligation to pay. Drijber took into account that in his view a certain degree of insight may be expected from the ‘average consumer’ when making an online purchase. One of the reason for this is the increase in the average level of education, digitalisation, and the significant increase in online shopping in recent years. Advocate General Drijber therefore concluded that an order button with the caption place order complies with the order button provision.

The Supreme Court, however, found otherwise. In its bol.com judgment, it ruled that the caption placing an order is not necessarily associated with the establishment of an obligation to pay, both in everyday language and in the eyes of the normally informed and reasonably cautious and attentive average consumer (the ‘average consumer’). In part, this is because of the distinction in the text and the legislative history of Article 6:230v of the Dutch Civil Code between ordering or placing an order on the one hand and entering into an obligation to pay on the other, from which the Supreme Court apparently deduces that these are also two different things for consumers (paragraph 4.7.3). 

Implications for web stores and online providers

The Supreme Court then addressed the consequences of the fact that the order buttons in both cases did not comply with Article 6:230v of the Dutch Civil Code. The premise of the Consumer Rights Directive (Article 24(1)) is that there must be a ‘penalty’ for violation of consumer law, such as the order button provision, and that this penalty must be effective, proportionate and dissuasive. 

The two Supreme Court judgments distinguish between cases in which the consumer does not appear (in absentia cases) and cases in which he or she does appear (defended actions). In a defended action, the court may proceed to void the contract in its entirety if the consumer so desires. Voidance of the contract has retroactive effect. The consequence of voidance is therefore that the contract is deemed never to have existed (Article 3:53(1) of the Dutch Civil Code). The transaction must then be reversed. In concrete terms this means, for example, that the consumer must return a purchased product to the merchant (because the merchant has unduly delivered that product) and that the consumer must get their money back (because they have unduly paid). This will generally be detrimental to the merchant, because the product will have lost some of its value by then. As soon as the packaging of a product is opened, its value decreases. The Supreme Court found that, in principle, the merchant cannot charge this loss to the consumer (paragraph 4.8.9 of the bol.com case). That is the penalty for the merchant.

If the merchant has not provided a product but rather provided a performance, such as a course, that performance cannot be ‘returned’ or undone. In that case, the merchant can only claim compensation for the value of that performance at the time of receipt by the consumer. The entitlement to compensation exists only as far as it is reasonable. The Supreme Court ruled that – because the penalty must be effective and dissuasive – in his case it was reasonable for a discount to be deducted from the compensation. In assessing the extent to which compensation is reasonable, the ‘two-week period’ may also be relevant. In the case of an online purchase – a ‘distance contract’ – the consumer has the right to dissolve (ontbinden) the contract within this cooling-off period. The Supreme Court found that if the consumer has been made aware of this cooling-off period but has not made use of it, that fact may be relevant in determining whether compensation for the merchant is reasonable (paragraph 4.7.9 of the course provider’s case). 

In in absentia cases – as in the bol.com case – this is different, because the consumer then does not express any desire to void or not to void the contract. According to the Supreme Court, in that case the subdistrict court must partially void the contract ex officio: partially, because in that case the consumer’s rights under the contract are not affected, but their corresponding obligations are. Partial voidance is appropriate because it is not clear whether the consumer wants to be rid of the contract, for example whether he or she wants to return the received product. In practice, partial voidance means that the consumer may keep the purchased product, but does not have to pay the full purchase price. In that case the consequences for the merchant may not be disproportionate (paragraph 4.8.8 of the bol.com case). The Supreme Court found a discount of one third of the purchase price reasonable (paragraph 4.8.10 of the bol.com case).

Questions raised by the judgments

The Supreme Court has clearly tried to provide guidance for subdistrict courts, but the rulings also give rise to questions. First, of course, the question is whether this judgment is too strict. Is it really unclear to the average consumer that clicking the place order button means that payment is due? It is significant that not only Advocate General Drijber believed otherwise. The tenor in initial reactions under news reports on the internet was also that this strict line is somewhat far-fetched and overprotective. 

Be that as it may, the distinction between proceedings in which the consumer does and does not appear raises questions. For example, can a consumer who does appear in proceedings also seek partial voidance? The rulings would otherwise lead in practice to a situation where consumers who do not appear in the proceedings receive, by way of ex officio partial voidance, an (unsolicited) ‘discount‘ of one third on the price of the delivered product and are also allowed to keep it. Consumers who do appear, on the other hand – if they cannot request partial voidance – only have the choice between returning the product (if they choose full voidance) or remaining liable for the full purchase price (if they do not want to void the contract). 

The Supreme Court further found that – if a performance has been provided – when assessing whether compensation is reasonable for the merchant, it may also be important to consider whether the consumer was made aware of the right of withdrawal “and did not subsequently exercise it” (paragraph 4.8.9). This is the consumer’s right to dissolve (ontbinden) an online contract (a distance contract) within two weeks without giving reasons (Article 6:230o of the Dutch Civil Code). The Supreme Court’s line of reasoning is apparently that if the consumer has been made aware of the cooling-off period, but has (therefore knowingly) not made use of it, it may rather be assumed that compensation for the merchant is reasonable, if the same consumer later voids the contract on the grounds of an unclear order button. However, the Supreme Court has not explained this any further. More generally, this right of withdrawal, which thus also (already) protects the consumer, again gives rise to the question whether the Supreme Court’s line of reasoning on the order button provision is not too strict. 

Conclusion

The Supreme Court’s rulings are in keeping with the trend where, under European consumer law, consumers are offered far-reaching protection – even if consumers themselves do not ask for this and do not even appear in proceedings instituted against them. In such cases, the court must, in principle, grant a one-third discount on the purchase price if the contract was entered into by clicking an ‘unclear’ order button. The Supreme Court rulings may have a substantial impact for web stores and online providers. They are obviously well advised to adjust the caption of their order button, if necessary, to avoid in any event any challenge (under Article 6:230v of the Dutch Civil Code) of distance contracts yet to be entered into.