Following up on our previous article on electronic accounting and the legal aspects of digitization, we continue with an article on the electronic incorporation of general terms and conditions.
Pursuant to Section 273 of Act No. 513/1991 Coll., the Commercial Code (hereinafter also referred to as the “CC”), which states:
“(1) Part of the content of a contract may also be determined by reference to general terms and conditions drawn up by professional or interest organizations, or by reference to other terms and conditions known to the contracting parties or attached to the proposal.
(2) Deviating provisions in the contract take precedence over the wording of the terms and conditions referred to in paragraph 1.
(3) Contract forms used in commercial transactions may be used to conclude a contract.”
The law thus distinguishes three types of terms and conditions by which part of the contract’s content may be determined by reference to them:
- general terms and conditions
- terms and conditions known to the contracting parties
- terms and conditions attached to the draft contract
In the case of general terms and conditions drafted by professional or interest organizations (it is presumed that both contracting parties are familiar with them), these become part of the contract if the contract refers to them. In the second case, these may be terms and conditions known to at least one contracting party (at least the one proposing them as part of the contract); these will also become part of the contract if the contract refers to them. In the third case, these are terms that a contracting party is not familiar with and must be attached to the draft contract or the contract must refer to them. If such terms are not attached to the contract, the contract may be indefinite and, under certain conditions, deemed invalid for this reason.
In commercial contractual relationships, we therefore frequently encounter the use of general terms and conditions, the primary purpose of which is to facilitate and expedite the process of concluding contracts in situations where certain circumstances between the contracting parties recur regularly, and therefore it is not practical or efficient to include them in contracts in every individual case. The contract being concluded thus includes a reference to the contracting party’s general terms and conditions, thereby completing its content in a relatively simple manner within the meaning of the aforementioned Section 273 of the Civil Code.
For the sake of completeness, we note that other terms and conditions are generally drafted by individual business entities that seek to apply them within the contractual relationships they enter into. We frequently encounter them in the purchase, sale, and distribution of goods and the provision of various services. These terms are not generally known because they are used only within a narrower business sector or among a limited group of people. As a result, stricter conditions apply to their enforceability. In addition to an explicit reference in the contract, they must also be either (demonstrably) known to the contracting parties (e.g., from prior cooperation in long-term contractual relationships) or attached to the draft contract. It should be noted here that it is not sufficient if other terms and conditions are merely made available for review at the time of signing the contract.
Based on the foregoing, it is clear that the Civil Code does not require that the terms and conditions be signed by the contracting parties. However, the situation is different if the unsigned terms and conditions include a contractual provision for which the law expressly requires written form. The validity of a written legal act is contingent upon the signature of the acting party; otherwise, it cannot produce the intended legal consequences. Thus, if, for example, an agreement on a contractual penalty must be in writing by law, the terms and conditions in which it is included must also be signed (in addition to the contract itself). In light of the above, there is no doubt that, for example, an agreement on a contractual penalty—as an institution for which the law requires written form—requires, for its validity as a written legal act, the signature of the contracting parties.
The process of incorporating general terms and conditions into a contract concluded by electronic means is characterized by several specific features.
First and foremost, it is necessary to confirm the general terms and conditions, i.e., to express consent to them. It is generally accepted that consent to the general terms and conditions can be expressed in the electronic world by clicking, using a pointing device (e.g., a mouse), on the “I agree” or “I accept” button. The condition is that this button must be labeled in such a way that it clearly indicates the contracting party’s intention to be legally bound by the general terms and conditions. Clicking the relevant button replaces the contracting party’s signature and gives rise to the relevant legal consequences.
Before concluding the contract, the contracting party must be given the opportunity to familiarize themselves with the text of the general terms and conditions; for this reason, it is therefore essential to include an explicit reference to the text of the general terms and conditions in the contract. Currently, a reference to the general terms and conditions is typically provided in the form of a hyperlink, which allows for easy access to the text of the general terms and conditions.
Based on the foregoing, it can be concluded that the general terms and conditions are incorporated into a contract concluded by electronic means if the contracting party, by clicking the “I accept” button, expresses their consent to the wording of the general terms and conditions, a link to which is clearly displayed near this button.
Digitization brings numerous benefits to businesses and other entities, primarily cost reduction, time savings, easier access to documents, and many others. However, when implementing new technologies, one must not forget to comply with personal data protection rules.
With its many years of experience, the law firm Hronček & Partners, s. r. o. guarantees the provision of high-quality legal services. If you need advice or assistance with any issue related to digitization or GDPR, please do not hesitate to contact us. We are at your full disposal.
