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Purchase contracts

Signing contracts

- Purchasing goods means signing a contract for goods between a consumer and a business. A purchase contract is made by a business accepting a consumer’s intention to order.

Purchasing precautions

Precautions for using online shopping malls

- In e-commerce and mail order, consumers purchase a good or the like by relying on indications and ads without having a first-hand look at them as in ordinary commercial transaction, and there may be incidents like breakage or loss of the goods or the like in the process of preparing and delivering them to consumers. Such being the case, it is recommended that consumers pay attention to the following so as not to incur loss (Ref.: Consumer Consultation Center of Fair Trade Commission):

· Meticulously ascertaining the content of ads and indications about the goods, price, quality, who is to pay the delivery expense, period allowed for returning the goods, who is to pay the delivery charge for returning the goods, and conditions set for returning the goods, etc.

· Keeping contract documents, ad leaflets, and receipts, which may be required when canceling orders or returning goods.

· Conditions on after-sales service, parts exchange, and maintenance expense, etc.

Provision of information on transaction conditions

Matters to be included in notices for ordering goods

- In placing indications or advertisements to take orders for the transaction of goods, etc., an online shopping mall business shall include therein each of the following matters (Article 13(1) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」):

· Names of the business and its representative.

· Address, phone number, and e-mail address.

· Business registration report-related matters like the report number provided at the time of submitting the report to the Korea Fair Trade Commission or local mayor, governor or head of Si, Gun and Gu, along with the name of the institution to which the report was submitted.

- An online shopping mall business shall indicate, advertise, or announce the following matters in an appropriate manner so that consumers can understand the terms of transaction of goods, etc. accurately before concluding a contract and make such a deal without any error or discrepancy and, if the contract is concluded, issue documents stating the following matters regarding the contents of such contract to the other party to the contract before supplying the goods, etc., provided the documents may be issued to a person who receives the goods, etc. in lieu of the other party to the contract to the extent that does not infringe upon the rights of the latter (Article 13(2) of the 「Act on Consumer Protection in Electronic Commerce, etc.」 and Article 20 of the 「Enforcement Decree of the Act on Consumer Protection in Electronic Commerce, etc.」):

· Name of the supplier and seller of goods or the like; name, address, and phone number of its representative, etc.

· Description, type, and content of goods or the like.

· Information on goods or the like (Here, “documents regarding the contents of a contract” may be replaced with indications put on the goods.).

· Prices of goods or the like (or a specific method of fixing prices if they have not been fixed), payment method, and timing of payment.

· Method and timing of supply of goods or the like.

· Withdrawal of order/cancellation of a contract (“withdrawal of order, etc.”) – its time limit, how to exercise the relevant rights, and effect (including a form used to exercise such rights).

· Exchange, return, and warranty of goods or the like; refund; conditions for payment of compensation for delay in refund.

· Technical matters required for the transmission and installation of goods or the like that can be supplied through electronic media.

· Matters concerning compensation for loss/damages incurred by consumers; handling complaints about goods or the like; handling disputes between consumers and businesses.

· Terms and conditions concerning a transaction (including a way of ascertaining the content of such terms and conditions).

· Clause to the effect that consumers may opt for payment deposit for safe purchase or consumer damage compensation insurance contract until they are provided with goods, etc. (the foregoing applies only to prepaid mail order and not to the transactions stated in Article 24(3) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).

· Matters like expense for return/exchange other than the price of goods or the like that consumers should bear, if applicable.

· Content on restrictions in sales conditions like date of sale, place of sale, sold quantity, and place of handover, if applicable.

Can I be refunded the small amount debited automatically without my consent?

Q. I subscribed to a music source site as a member, understanding that there is no membership fee to be paid, but I later found that a sum of KRW 9,500 was withdrawn from my account each month for six months. I tried to contact them through a phone number posted at the site, to no avail. They have given me no notice regarding the payment. Can I have my money returned?

A. A content provider (site operator) needs to prove that payment of an amount is made by a consumer’s bona fide intention and inform the consumer of matters like amount to be paid, timing of payment, method of payment, etc., such as through short message service. If the business has withdrawn a sum automatically without any corresponding prior notice, it should return the sum to the customer.

Notice to minors

- When concluding a contract on the transaction of goods, etc. with a minor, an online shopping mall business shall inform the minor that if his/her legal representative does not agree to the contract, the minor himself/herself or his/her legal representative can cancel the contract (Article 13(3) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).

Order confirmation

Order confirmation, etc.

- An online shopping mall business shall promptly notify the consumer of information regarding the confirmation of receipt of declaration of will to order and possibility of sale, when taking an order from a consumer regarding the transaction of goods, etc. (Article 14(1) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」).

- An online shopping mall business shall have adequate procedures that enable consumers to confirm, correct, or cancel the contents of an order before concluding a contract (Article 14(2) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」and the 「Guidelines on the Consumer Protection in Electronic Commerce, etc.」 (KFTC Public Notice No. 2015-7 dated August 20, 2015) Ⅱ, 5).

· Procedure taken by a business to prevent consumers’ error in manipulation; suitable procedure taken by a mail order business to help consumers ascertain the content of an order and correct or cancel it.

√ (In a transaction carried out in a cybermall) Making it possible for a consumer to re-check the content of an order and asking the consumer whether to continue the ordering procedure through a screen appearing before connection to the payment screen.

· (Business helping a consumer check the content of an order or giving an explanation to a customer) Taking a step to help the consumer clearly grasp important information like prices.

√ Preventing consumers’ error in reading figures by putting prices of goods or the like both in numbers and words.

Instance of business canceling transactions, pointing to error in price statements

Q. I bought a pair of blue jeans at a special price of KRW 10,000 at an online shopping mall, but the business unilaterally refunded the money I paid after sending me a text message two days later saying “The order is canceled due to an error in price indication.” The business was selling goods with the same ad at an open market. Shall I accept the business’s unilateral refund and cancellation of the order?

A. Article 109 of the 「Civil Act」 stipulates that a declaration of intention may be voidable if made by mistake with regard to any essential elements of the juristic act. In this case, the business’s insistence on an error made is one that is recognizable, since the price of KRW 10,000 is 10% lower than the usual price of a pair of blue jeans. Thus, it is difficult for a consumer to insist on the business fulfilling the original contract. Article 15(2) of the 「Act on the Consumer Protection in Electronic Commerce, etc.」 stipulates that, upon encountering difficulties in the supply of the ordered goods, etc., a seller shall inform the consumer of the reason without delay, and, in the case of a prepaid mail order, refund the price or take the necessary measures for refund within three business days of the day the consumer pays all or part of the price. In this case, the seller completed the step for notice and refund to the consumer within 2 days of the consumer’s payment. The seller appears to have done what it should do under said law, and the consumer’s insistence that the seller fulfill the order will get the consumer nowhere.

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