Swiss B2C Transaction Regulations Quiz

International Business Law - Study Notes

• Ueli Grüter, LL.M., Attorney at Law, lectures at HSLU
• Contact information: linkedin profile, websites for digital law, international business law, and a law blog
• Course materials are illustrated by Benjamin Hermann

Contract Law

• Conclusion of a contract: Mutual expression of intent by parties (explicit or implied, with good faith). Agreement on rights and obligations, crucial that nothing is agreed until everything is agreed.
• Offer and Acceptance: Offering a service or good to conclude a contract. Acceptance of the offer. Open-ended offers remain valid as long as good faith suggests the other party needs time for evaluation.
• Recommendation: Suggesting a time limit to the offer with reservation of revocation for offers.

Consideration in Anglo-American Law

• Making a concluded contract enforceable, consideration is the agreement of an effective exchange of performance and counter performance. These do not have to be equal in value, as in a simple purchase agreement.
• Consideration is less important in legal practice.

Contracting Parties

• Identifying companies: Use the exact company name from the Central Business Name Index (Zentraler Firmenindex) on the zefix.ch website.
• Signature authority: Crucial when representing companies of importance: a contract signed by unauthorized personnel is void, unless the company formally approves it. Non-authorized employees can be liable. Signatory powers must be published in the commercial register. This includes single/joint signatures and procura.
• Examples: Galliker Transport AG is available in the zefix.ch index

Form of Contracts

• Informal contracts: Generally valid unless the law requires a specific form
• Legal forms: Include simple written forms, qualified written forms, and notarization.
• Consequences of non-compliance: Contractual form not followed results in a void contract under Swiss law.

Written Form

• Recommendations: Using a written form is highly recommended for evidence and to reduce disputes.
• Implied Conduct: Less legal or judicial disputes arise with written agreement, and an implied good faith approach.

Qualified Digital Signature

• Equal to a handwritten signature: Under certain legal circumstances, this is applicable. Associated with a qualified time stamp, following Federal Act on Electronic Signatures (ZertES).

Termination of Contracts

• Pacta Sunt Servanda: Contracts must be executed. Termination by agreement or law (clauses). No perpetual contracts in Swiss law (BGE 114 II 159).
• Long-term contracts: Include termination clauses.
• EU Consumer Rights Directive: 14-day right of withdrawal digitally concluded contracts (B2C sector), does not apply in Switzerland.
• Definite/indefinite contracts:
  • Definite: Termination upon expiry.
  • Indefinite: Termination by notice.

Drafting of Contracts

• Comprehensive: Clear, understandable language, and anticipating potential issues (worst-case scenarios).
• Organisation: Group closely related topics in clauses/titles.
• Procedures: Include change management, escalation procedures, dispute resolutions and law enforcement procedures
• Model contracts: Using examples from Swico, WEKA, or the federal government are important
• Tech options: Utilizing AI tools to assist in drafting
• Customization: Adapt to the specific situation of each business/project.

Often used contract clauses

• Contracts are unique per situation: structure and content matter.
• Non-exhaustive list: Introduction (Preamble) for ease of understanding, presentation of parties, motivation, and summary of the object, avoiding advertising.

Object of the Contract

• Explicit and thorough description of the contractual subject: detailed enough to correctly resolve issues
• Important when verifying the correct fulfillment of contractual obligations
• Technology, IT, design often handled in annexes for complexity.

Place and Time of Performance

• Agreements on performance are crucial: including the place and time of performance in contracts
• Recommendation to explicitly specify location/date for compliance, especially in international contracts
• Important for multiple conditions relating to contract fulfillment.

Price and Payment Methods

• Price is an essential element of the contract
• Linked to payment arrangements
• Including public charges, copyright fees and disposal fees (B2C)
• Recommendation to explicitly include what is or is not included (especially VAT) in the price, to avoid issues with self-induced double taxation.

Types of Prices

• Unit price: Basic price per unit
• Real-time costs: Costs depending on real-time updates or expenses.
• Fixed Price: Fixed predetermined cost
• Maximum price: Predetermined maximum price.
• Default interest: Legal default (dispositive) of 5% per year in B2C in Switzerland (CO 104), or agreed rates for B2C contracts

Confidentiality

• Scope: Parties agree not to disclose confidential information received within the contractual relationship.
• Obligations: Add a confidentiality clause for legal obligations.
• Recommendation: Include an obligation for confidentiality to prevent legal issues, not just for a contractual relationship.
• Legal references: Use references to existing laws/agreements (e.g., CO 321a IV).

Intellectual Property Rights (IPR)

• Ownership: Who owns IPR arising from or prior to the contract's execution?
• Licensing/Compensation: Outline terms for license and related compensation.

Liability

• Liability laws: Include a complete summary of relevant Swiss liability law (intla.ch chapter 07).
• Exemptions: Exclusion clauses, limitations, and who is accountable for damages.
• Legal proceedings: Compensation of third parties.
• Insurance: Recommend including liability insurance, as defined in intla.ch sections 07.11 and 09.12 (Legal protection and liability insurance).

Termination of the contract

• Force majeure: Outline contract termination provisions for external circumstances outside the parties’ control (e.g., natural disasters, pandemics).

Transfer of contracts

• Contract transfer limitations:
• Depending on the nature of the contract parties, a contract may need specific terms concerning who (and how) can transfer or subcontract it.
• This is vital in cases where personal characteristics affect the performance of the contract (CO 68).

Guarantees

• Fulfillment assurance: Agreements that guarantee fulfillment of the contract.
• Real Security: e.g., guarantees, bank guarantees, security deposits, to protect obligations.
• Penalty for non-compliance: Including suitable penalties (e.g., financial) is essential to enforce terms.
• Swiss law reference points: Swiss law (CO 160 ff.) guidance on contractual penalties.

Entire Agreement

• Comprehensive agreement: Includes all agreements relating to the subject matter in the contract.
• Replacement: Replaces all previous agreements/side agreements.
• Change management/escalation procedures: Necessary to address changes in situation/agreements throughout the relationship.

Applicable Law and Court of Jurisdiction

• Agreements: Agreements of which law and jurisdiction to use are advised.
• Contractual matters: Applies to international contracts to prevent legal issues.

Coordination of Contracts

• Similar contracts: Contracts for the same issues or subject matter must be in sync
• Examples: Software development, maintenance, and cloud services, and comprehensive agreements that encompass multiple areas of the company/organization.

Letter of Intent, Non-Disclosure, and Non-Use Agreements (NDA/NUA)

• Preliminary agreement: A Letter of Intent (LoI) is not usually legally binding on a main contract.
• Confidential information: NDA typically addresses the disclosure of confidential information that is specific to the arrangement.
• Usage Restrictions: Non-Use Agreements (NUA) address the usage of confidential information for purposes other than the contract agreement.
• Penalties: These must be high enough to be credible, but not disproportionate (as per Swiss law).

General terms and conditions (GTCs)

• Digital world agreements: Modernizing the use of GTCs in contracts.
• General Application: Applicable to groups of agreements by a party across different situations (e.g., in a field/industry).
• Functionality: Functionality of a GTC includes streamlining operations through use of checklists and standardization, and clear procedures toward resolving issues.

Ambiguity Rule

• Interpretations: Enforceable clause interpretations favor the party that does not make statements (in dubio contra stipulatorem).
• Unusual clauses: Unusual clauses are non-binding if the opposing party could not reasonably anticipate those unusual clauses.

Battle of the Forms

• Agreement differences: Using multiple sets of terms/conditions in a contract. This can create discrepancies, so avoid using too many.
• Adaptations**: Contracts should be adapted to meet the needs/wishes of the parties in the individual contract agreement.

Case "The Yacht Sale" (Example)

• A case study to refer to. The example is useful to understand practical application of legal principles in contracts.

Licence Agreement

• Use of IP: Agreement concerning intellectual property use rights
• Classification: Divided into intangible assets, geography and timing for clarity.
• Digital business: Common in the digital realm due to downloadable content.
• Practical examples: Common in the digital market (music, movies, software).

Difference between Licence Agreement and Purchase Agreement

• Scopes: License agreements have a different scope than a purchase agreement.
• Interests: Agreements have different benefits for parties involved.

Types of Licences

• Simple licence: Licensor retains the right to use the IP, while allowing others its use.
• Sole licence: Similar to simple, but the licensor doesn't let anyone but the grantee to use it.
• Exclusive licence: Licensor grants use only to one licensee.

Checklist for Licence Agreement

• Checklist components: Structure/layout of an agreement in practical form (introduction, definitions, specific object, documentation, scope (temporal, geographic, factual).

Royalties

• Fee determination: Parameters and methods for determining royalties.
• Competitive analysis: Benefit for the licensee, and comparison with competitive offers.
• Variety of royalty structures: Types of payment structures.
• Record-keeping: Ensuring proper record-keeping and review are in place.

Improvements

• Ownership: Determining ownership of any new IP.
• Compensation: Discussing price/compensation for improvements.
• Obligations: Obligating parties to adapt/include improvements/additions.

Legal Guarantee considerations

• Breach of contract: Rights/obligations to address infringements.
• Mutual support: Rights/obligations for support in particular events.
• Quality/Defect: Addressing product flaws/defects.
• Legal/Contractual Security: Rights/protection provided through clauses concerning contract duration, terminations and contract transfers.

Amendments and Supplements

• Formalization and/or legal status of contract amendments/supplements
• Applicable laws and jurisdictions.

Case "Waver"

• Example to illustrate relevant concept(s).

Glossary of Terms

• Agreement/Contract: Formal legal arrangement.
• Offer: Proposition/suggestion.
• Counter-Offer: Response to an offer.
• Acceptance: Agreement to an offer.
• Consideration: The exchange of value in a contract.
• Offeror: Party offering.
• Offeree: Party receiving the offer.
• Mutual: Mutual agreement between parties.
• Congruent: Compatible, matching/consistent.
• Penalty: Consequence for noncompliance.
• VAT: Value added tax
• Non-disclosure Agreement: Agreement on non-disclosure of specific information.
• Force Majeure: Circumstances uncontrollable and not causing liability.

Test your knowledge on Swiss B2C transaction regulations, including interest rates, confidentiality obligations, and intellectual property rights. This quiz covers key legal concepts and frameworks relevant to consumer transactions in Switzerland. Perfect for law students or professionals looking to refresh their understanding of Swiss commercial law.