Dutch Supreme Court answers preliminary questions on the use of online payment buttons

The Dutch Supreme Court has ruled that the "text order", "place order", or "complete order" on an online payment button does not provide sufficient information for consumers to understand they will enter into a payment obligation.

The Supreme Court in its judgment on 4 October considered that, in common Dutch language and for the average consumer, these descriptions do not necessarily establish a connection between placing an online order and the obligation to pay. Consequently, any purchase agreements concluded via payment buttons using only these texts can be wholly or partially annulled (vernietigd), entitling the consumer to a (partial) reimbursement of the purchase price.

Precontractual information requirements

In two different procedures, the Supreme Court was asked to clarify whether the "payment buttons" meet the pre-contractual information requirements for consumers. European consumer law mandates that the text on an online payment button must unambiguously indicate a payment obligation both in common language and from the perspective of a normally informed and reasonably observant and average circumspect consumer. This legal requirement is also incorporated into the Dutch Civil Code.

Annulment of purchase agreements

Following the annulment of a purchase agreement, consumers are entitled to return purchased items and receive reimbursement of the purchase price. The Supreme Court also clarified that if the consumer has not appeared during the proceedings, the court cannot declare the whole annulment of the purchase agreement because it is unclear whether the consumer may have any objections. The court can, however, grant partial annulment in the form of a discount on the amount to be paid by the consumer. From a practical perspective, the court indicates that a one-third discount is generally considered reasonable. Courts have the option to deviate from this guidance and apply a different discount, depending on the specific circumstances at hand. If consumers appear in court, they will have the option to either not annul, or request partial or whole annulment of the purchase agreement.

Osborne Clarke comment

The decision from the Dutch Supreme Court confirms that the text on online payment buttons must unambiguously indicate a payment obligation. This means that purchase agreements can be annulled by consumers if the online payment button did not indicate an explicit payment obligation. According to the Supreme Court, buttons with only texts like 'order', 'place order', or 'complete order' without making an explicit reference to the payment obligation will be considered insufficient.

This strict interpretation by the Supreme Court may have far-reaching consequences for online traders, as each agreement entered into via these online payment buttons faces the risk of being annulled by consumers, resulting in consumers being entitled to (full or partial) reimbursement of the purchase price.

Several legal proceedings have already been initiated on behalf of consumers against online traders for failing to use proper online payment buttons. Given the class-action-friendly climate in the Netherlands, we also expect that several claim foundations will prepare and initiate class actions based on the Supreme Court's strict interpretation.