Entrepreneur – consumer? About important changes in consumer law

In the shadow of events connected with the pandemic of coronavirus, an approaching small revolution in consumer law could escape our attention. Let me remind you that based on the Act of 31 July 2019 on Amendments to Certain Acts Aimed at Reducing Payment Backlogs [Journal of Laws No. 2019. 1495, No. 2020. 568 and 875], starting from 1 January 2021 new regulations under which certain entrepreneurs get some rights that have been attributable to consumers so far will come into force. Initially, the amendment is planned for 1 June 2020. Therefore, entrepreneurs that have not adjusted to the approaching changes to date should review and prepare for them in detail.

Starting from the next year, almost 3 million of sole traders will be subject to consumer protection in their relations with other entrepreneurs, in particular in three basic areas:

1. Application of regulations on prohibited clauses in draft agreements;
2. Liability for statutory defect warranty applicable to sold things;
3. Right to withdraw from distance and off-premises contracts within 14 days.

Please, note that the amendment does not mean that regulations governing defined consumer rights will apply directly to sole traders. Such a solution was refused categorically by environments dealing with consumer protection, including the Office of Competition and Consumer Protection, which pointed out possible interpretation issues and abuses of new regulations. Finally, the legislators decided to separate a category of entities, which is a kind of a hybrid of a consumer and an entrepreneur, which will have defined privileges and additional legal protection.

Therefore, the legislation solution set forth in the amendment is based on a rule that the regulations apply to a natural person that enters into an agreement which is directly connected with that person’s business activity if, given the content of such an agreement, it is clear that this is not an agreement of a professional character stemming, in particular, from the core activity performed by that person and disclosed on the basis of regulations on the Central Registration and Information on Business Activity.

Thus, prima facie, there is a substantial difference in comparison with the applicable definition of a consumer, which is set out in Art. 22¹ of the Civil Code and which stipulates that a consumer is a natural person that carries out a legal activity with a trader and such an activity is not connected directly with that natural person’s business or professional activity. In accordance with this definition, a natural person, even if they are an entrepreneur, obtains a status of a consumer provided that the agreement (or legal activity) is not directly connected with their business or professional activity.

Therefore, for the new group of entities, an important criterion that excludes consumer protection will be only the professional character of a given activity, i.e., an extent to which it is connected with the professional profile of activity. The legislator has not decided, however, to define specific premises for the qualification of the professional character of an activity. They have only decided to refer to information about the profile of activity specified in the CEIDG. However, PKD codes are known to be usually described in a very general way. Thus, it is difficult to believe that such a solution will protect us substantially against interpretation issues or a potential abuse of law. Ultimately, as it often happens, these will be law enforcement authorities, in particular courts, that will have to bear the burden of proof.

The changes must be considered revolutionary for sure. On the one hand, small traders are relieved of liability connected with the status of a professional participant of economic trading. It has been fairly noticed that, from an axiological point of view, the unification of requirements applicable to business entities is a slightly exaggerated and often inadequate solution, which, in certain cases, is even harming to the smallest entrepreneurs. Only the criterion of the breakdown of entrepreneurs may raise reservations as it is only dependent on the form of business activity, which is not always reliable (a criterion referring to economic ratios, e.g., protection applicable to the whole group of micro businesses) would be much more reliable here).

On the other hand, other entrepreneurs will obviously have to adjust to the new situation. For example, the widely understood e-commerce sector will have to adjust its regulations. And the preparation of relevant draft agreements will be particularly important from the point of view of B2B companies. It is worth clarifying important interpretation issues concerning the amended regulations in an adequate way already at this stage in order to avoid later expensive court disputes in this field.

Mariusz Maksis, attorney-at-law