Consumer sales and responsibility for faults
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When your company sells its products to consumers, use clear contractual terms and make sure that you act in accordance with the Consumer Protection Act. You may sell goods or services and the products may be physical or digital. If there is a fault in a product bought by a consumer, credit the consumer with its value. Depending on the situation, you can correct the fault, give a product with no faults to replace the defective one, agree on a price reduction or cancel the sale.
When a consumer buys a product or service from your company, a contract is created between you. It is based on contractual terms and conditions which aim to establish trading rules and prevent disputes.
Both your company and the consumer must comply with the terms of the contract. In general, neither of you can amend the contract unilaterally without some special reason. The contract may concern a single product; a one time delivery, or it may be a long-term contract.
Draw up the contractual terms in accordance with the Consumer Protection Act. According to the nature of the contract, write down clearly all the terms that concern issues that are crucial to the consumer, such as
- the object of sale
- the price
- the scope of the contract and its duration
- the delivery period and terms of payment
- sanctions for contract violations
- amendment of the terms of agreement
- withdrawal from and termination of the agreement
- information on dispute resolution bodies
If you draw up contractual terms that are unclear, they will be interpreted for the benefit of the consumer.
Give the consumer the opportunity to become familiar with the contract terms already at the marketing stage or at the latest when concluding the contract. Note that simply making reference to the terms and conditions when making the sale is not sufficient.
You can also use standard terms and conditions, if they have been drawn up for your business sector.
The seller bears primary responsibility for a defect in a product or a service. The consumer also has the right to make a claim based on the defect against the manufacturer, importer, other previous trader in the sales chain or a subcontractor.
The consumer must make a notification of the fault within a reasonable time after they should have noticed it. However, a notification of a fault can always be made within two months of the date when the consumer actually noticed the fault. If a warranty has been given on the product, the provider of the warranty is responsible for the product in accordance with the terms of the warranty.
The seller is responsible for any faults in the goods at the time of transfer even if the fault does not occur until later. If the fault occurs within six months of the transfer of the product, it is assumed that the fault was already in the product at the time of the transfer and the seller is liable for it. To be released from liability, the seller must prove that the product was free of faults at the time of the transfer.
The expiry of the warranty period or the six-month period does not necessarily mean that the seller’s liability for faults in the product has ended. If the warranty period or the six-month period has expired, the seller may be liable for the fault, if the durability of the product has not been in accordance with the justified expectations of the consumer.
If your company’s product is not an actual good or service, special rules apply to situations regarding faults in such a product. Special provisions may differ to some extent from the general provisions on defects in consumer protection.
If a consumer suffers damage as the result of a fault in a product bought from your company, the consumer has the right to demand compensation for the damage from your company.
Under the Consumer Protection Act, there is a fault in a good if it does not correspond to the agreed type, quantity, quality, or other characteristics or its packaging. The durability of the goods must also correspond to what may reasonably be expected for similar goods. Although the Act specifies the types of fault generically, in practice the definition of a fault is on a case-by-case basis.
If there is a fault in goods you have sold to a consumer, the consumer has the right to lodge a complaint with your business. Your business’s first response is to repair the fault if the repair can be carried out within a reasonable period of time. The consumer may refuse to have the product repaired if this would cause significant disadvantage to the consumer or a reduction in the value of the product. The ground for refusal may also be that the repair is not likely to succeed.
If repair is not possible or would result in unreasonable costs, you should give the consumer a flawless product in place of the faulty one. If, however, you are not able to exchange the product, credit the fault through a reduced price. If that doesn't work either, you can propose to cancel the transaction.
A service is defective if it does not correspond to the agreed content, methods or results. The fault is defined on the basis of the contract between the consumer and the service provider or general expectations (and not on the consumer’s personal expectations).
If there is a deficiency in a service you have sold to a consumer, the consumer has the right to lodge a complaint with your business. The consumer also has the right to refuse to pay part of the contract price equivalent to the deficiency until your company has corrected the deficiency.
Your company can correct the error or redo the deficient work if the consumer so requests. It must not, however, result in costs for the consumer. It is not compulsory to carry out a repair if that would create unreasonable costs or inconvenience for your company In that case you can offer a price reduction to cover the deficiency, or if that is not successful, you can propose to cancel the transaction.
If, in spite of requests, your company does not correct the deficiency or redo the work at all or within a reasonable time, the consumer may use another company to correct the work and invoice your company for it. Alternatively, the consumer may demand a price reduction or the cancellation of the transaction, if the job is thoroughly deficient.
Your company must ensure that the consumer understands that they must pay for the digital products that they have ordered. For example, if the consumer must press the order button to place an order, the product and the costs that the consumer must pay as a result must be shown next to the button.
A digital content contract delivered electronically is often used when digital products are sold. However, depending on the nature of the product, other contract types (such as service contract) may also be used.
The 14-day return (cancellation) period for digital products starts from the conclusion of the contract. However, the consumer does not have the right to cancel the contract if they
- have agreed that your company may start the electronic delivery of the digital content before the end of the cancellation period
- have received notification from you company that they have no right to cancel the contract.
Electronic delivery of digital content means, for example, that the data is downloaded or streamed to the consumer’s device.