Applicable law

Updated: 2/8/2016

It is important to be aware of any national rules in the consumer's jurisdiction, which may be applicable to the contract.

When it comes to cross border transactions, Regulation (EC) 593/2008 (Rome I)[1] determines which country’s law is applicable to contractual obligations in a given situation.[2]

In consumer contracts, generally the law applicable is the law of the country where the consumer has his habitual residence provided you pursue your commercial activities in that country or direct your commercial activities to that country or to several countries including that country. You could be deemed to be directing your commercial activities to the consumer’s country if, for instance your website provides information in the language of the consumer or allows the consumer to choose to pay in his own currency.

The following matters may constitute evidence that your commercial activities are directed to the consumer’s country[3]

  • the international nature of the activity
  • mention of itineraries from other Member States for going to the place where the trader is established
  • use of a language or a currency other than the language or currency generally used in the Member State, in which the trader is established with the possibility of making and confirming the reservation in that other language
  • mention of telephone numbers with an international code
  • outlay of expenditure on an internet referencing service in order to facilitate access to the trader’s site or that of its intermediary by consumers domiciled in other Member States
  • use of a top-level domain name other than that of the Member State in which the trader is established
  • mention of an international clientele composed of customers domiciled in various Member States.

Since the Regulation is based on the principle of freedom of choice, the law applicable to a contract can also be the law chosen by the parties. As the trader, you have the possibility to state in your terms and conditions, which law applies to the contract. Be aware that the law chosen by you only applies as long as it provides the same level of protection to the consumer as that of his country of habitual residence. In case of a complaint the consumer can refer to the law of the country of his residence, if it offers a higher level of protection.

If you direct your commercial activities to another country, it is therefore recommended that you have basic knowledge of that country’s consumer legislation and consider how they affect you and your business.

[2] Rome I is not applicable in Denmark (it has not been implemented due to the Danish opt-out on judicial matters) and Denmark still use Regulation 80/934 to decide which law is applicable. Norway (the Norwegian Supreme Court has stated in several decisions that Norway should seek unity with EU law and therefore the same principle applies).

[3] Pammer v. Karl Schlütter GmbH & Co. KG C-585/08 and Hotel Alpenhof v. Mr. Heller C-144/09 are cases from Court of Justice European Union (CJEU) 2010, concerning consumer protection and the jurisdiction of transnational internet and consumer transactions.