Advertising
Electronic Signatures
Domain Names
Web Site Liability
Evidence
There are no specific rules governing electronic contracts. As a basic rule contracts are not subject to form requirements and, under the freedom of contract principle, electronic contracting is acceptable. However, Finnish consumer protection legislation and certain specific regulations contain a number of restrictions as to the efficacy of contract terms in general and the validity of contracts.
Contract formation
The contract formation procedure in Finland can best be described as a traditional chain of offers and acceptances eventually concluding in a contract. A contract is usually concluded upon the acceptance of the offer, more precisely when the party who has made the offer has actual knowledge of the acceptance. An advertisement on a web site may sometimes be considered to constitute an offer, which can be accepted by indicating acceptance on the site (eg, by clicking on an icon labelled "I Accept"). However, parties to business-to-business contracts may agree upon specific contracting mechanisms between themselves.
Revoking the offer or the acceptance
An offer and an acceptance may be revoked before the recipient gains actual knowledge of their content. However, the parties can mutually agree a different kind of retraction system for their future agreements.
In accordance with the Consumer Protection Act (38/1978, as amended) the consumer is allowed to withdraw his online offer or acceptance within a 14-day period. Such withdrawal annuls the contract between the parties. The consumer can also withdraw from the contract by returning the goods ordered within 14 days of delivery. In consumer-to-business relations where the consumer is the seller, the rules of the Contracts Act (228/1929, as amended) and the Trade Act (335/1987, as amended) apply instead of those of the Consumer Protection Act. Under these acts the parties are considered equals and the consumer is not protected by the same safeguards as under the Consumer Protection Act. Therefore, the right of withdrawal does not apply in consumer-to-business situations.
Contract terms
As to the terms of the contracts, the general principles of reasonableness, fairness and loyalty in contractual relationships (applied to all contracts) set certain limitations. Finnish courts do not usually uphold disclaimers that limit a party's liability in cases of wilful misconduct or gross negligence. Other contract terms may also be considered unreasonable on the basis of a case-by-case evaluation.
Consumer contracts should be clear and unambiguous as unclear terms are interpreted to the detriment of the business party contracting with a consumer. In addition, consumer contracts should be made available in the official languages of Finland (ie, Finnish and Swedish). Further, compulsory provisions of the Consumer Protection Act cannot be excluded or deviated from to the detriment of the consumer and they are, therefore, implied as part of the consumer contract.
Contracting parties should be given a chance to familiarize themselves with the contract terms before entering into the contract. Severe or onerous terms should be expressly brought to the other party's attention. With regard to online contracting the minimum requirement would be to provide a clear hyperlink through which the contract terms can be accessed by the other party before accepting the offer. Transparent contract terms would also decrease the risk of ineffective incorporation. To be on the safe side the vendor should highlight severe or onerous terms and possibly provide for separate acceptance of the terms online.
When standard terms and conditions are being used it is recommended that an express acceptance of such terms be provided (eg, by clicking to acknowledge having reviewed the terms). Making the customer scroll through the standard terms before acceptance would arguably increase the efficacy of such terms.
Form requirements
As a basic rule, contracts are not subject to specific form requirements and online contracting is acceptable. However, there are rules that limit the possibility of concluding certain contracts electronically: for example, a contract for the sale of real estate must be made in writing and be publicly notarized - it cannot be made online. Also some contracts require that certain written documents be delivered in order to formalize the sale of certain goods, such as vehicles. Likewise, in accordance with the Finnish Procedural Code a prorogation agreement should be made in writing as it might not be enforceable if concluded electronically.
A party claiming that an online contract has been effectively concluded bears the burden of proof that the other party actually intended to enter into the contract and has had the opportunity to review the relevant terms and conditions.
Future changes
The Ministry of Justice has appointed a working group to prepare the implementation of the E-commerce Directive (2000/31/EC). The working group submitted its consultation paper to the ministry in March 2001 and it was then circulated for comments. The deadline for comments was April 27 2001. On the basis of the comments received further preparations of the new national legislation are being continued. The relevant government bill is expected to be submitted to Parliament in Autumn 2001 and the legislation is expected to come into force in January 2002. According to the consultation paper, online contracts will generally be recognized as valid and binding contracts. However, certain exceptions will remain in the legislation: for example, it will still not be possible to conclude a real-estate sale online.
An advertisement as an offer
Under Finnish contract law an advertisement on a commercial web site may sometimes be considered an offer. However, if it is obvious from the specific circumstances that the advertisement should rather be considered as an invitation to make an offer, the situation will most likely be interpreted differently. If the advertisement contains obvious errors or other clear inconsistencies, it may also be regarded as non-binding (even if considered to be an offer), although this will be assessed on a case-by-case basis. In order for the advertisement clearly to constitute an offer, the web site should communicate an intention to bind the party making an offer and specify in sufficient detail the terms of the possible agreement. Likewise, the acceptance should communicate an intention to be bound by the agreement and to agree on the specified terms. A web site owner may effect the assessment by constructing a web site that has no automatic acceptance systems and by drafting appropriate contractual clauses.
Rules on advertising
There are no specific rules on internet advertising, so the rules generally applied to marketing are also applied to internet marketing. Rules relating to advertising are included in the Consumer Protection Act and the Unfair Business Practices Act (1061/1978, as amended). Rules on the marketing of goods and services can also be found in the following:
- the Act on Measures to Reduce Tobacco Smoking (693/1976, as amended);
- the Alcohol Act (1143/1994, as amended);
- the Medicines Act (395/1987, as amended);
- the Act on Food Supplies (361/1995, as amended);
- the Package Travel Act (1079/1994, as amended);
- the Securities Market Act (495/1989, as amended); and
- the Act on Credit Institutions (1607/1993, as amended).
In addition, the recommendations of the Nordic consumer ombudsmen and the Finnish Direct Marketing Association may be taken into account in assessing the appropriateness of internet advertising. However, such rules are not legally binding.
The advertisement of tobacco products on the Internet is prohibited. Likewise, it is not permitted to place on a web site any content that violates the provisions of the Penal Code against racial hatred incitement, organized gambling, the depiction of child pornography and grave violence, and obscene or defamatory material. Alcohol, consumer loans, foodstuffs, medicines, package tours, securities and services provided by credit institutions may be advertised on the Internet if the applicable laws and regulations are followed.
There are no particular laws or regulations on electronic signatures save for the Act on Electronic Service in the Administration (1318/1999). According to the act an electronic signature is defined as a set of data that confirms the integrity and authenticity of an electronic message by a method that is open to public inspection. However, the act only applies to the institution of administrative law matters, the handling of such matters, and the serving of an administrative decision. It cannot be generally applied to other areas of law.
Future changes
The transposition of the Electronic Signatures Directive (1999/93/EC) into national legislation is currently being prepared. A relevant government bill is expected to be submitted to Parliament towards the end of 2001 and the legislation is expected to enter into force in 2002. Until Finnish law is harmonized with the directive it cannot be guaranteed that an electronic signature will be sufficient to create a valid and binding contract. While Finnish law does not as a rule invalidate electronic signatures, the burden of proof in many cases may lead to such an outcome.
As a general rule, Finnish top-level domain names (fiTLDs) can only be granted to Finnish companies, Finnish branch offices of foreign companies and Finnish associations and foundations, as well as to individual entrepreneurs registered with the Finnish Trade Register. An fiTLD must, as a general rule, correspond to the registered trade name of the applying entity, its auxiliary or parallel trade name, a Finnish registered trademark or a registered EU trademark. However, a legal entity cannot be granted an fiTLD based on its international trademark registration under the Madrid Protocol. Only one fiTLD per registered name or trademark is allowed.
Some differences between the registered fiTLD and the trademark or company name in question are allowed. For example, Scandinavian letters may be replaced by corresponding letters recognized by the Internet Protocol. Further, the fiTLD may not be an abbreviation and must include at least three characters. Only trademarks consisting entirely of letters, digits or words entitle their holders to the registration of the corresponding fiTLDs. Figure trademarks containing, for example, a word, would not entitle their holders to a fiTLD registration.
The primary responsibility in Finland for the content of a web site is vested with the owner of the site. However, under Finnish Law hyperlinking and other such intentional activity may give rise to liability for inappropriate content on another web site.
As yet there are no laws specifically regulating internet content in Finland. The provisions of the Finnish Penal Code concerning defamation, hate crimes and the like are also applicable to material published on the Internet. Assuming that the content on the destination site to which a hyperlink is provided does not originate from the provider of such a link the liability, if any, for the potential illegality of the destination site would most likely be viewed to be contributory in nature. The imposition of such contributory liability requires that the contributing action or omission was wilful or negligent and that, in a criminal matter, the contributor had previous knowledge of the probable effect of the action or omission in obtaining the intended results. Actions or omissions that could give rise to contributory liability include the neglect of a supervisory or oversight obligation.
As to copyright infringements and other such violations of law, the content provider of a web site is usually liable for such illegal acts. There are no clear legislative rules regarding the liability of an internet service provider and existing court practice is not sufficient to establish an unambiguous interpretation. In certain situations it is difficult to determine the actual role of a party providing content and/or services. Under certain special laws some parties (eg, a party having editorial control over material) might be considered to carry liability for copyright infringements whereas a party who does not supervise the content of the web site is not.
Future changes
The legal state on this point is somewhat unclear. It is expected that the implementation of the E-commerce Directive will clarify the situation, especially with regard to Articles 12 to 15, which deal with the liability of intermediary service providers. Dynamic changes in the rules on internet service providers may give rise to a situation where their activities may not enjoy protection under the national transposition of Articles 12 to 15 of the E-commerce Directive.
The Finnish Procedural Code provides that a party to any action must submit evidence to prove the facts it wishes to invoke for its own benefit. However, there are no clear rules as to the standard of proof in relation to contracts. Under the free evidence doctrine applied by the Finnish courts, the courts deal with each case on its own merits in determining what evidence is sufficient to prove the existence of a contract and its terms. However, as a basic rule the party who claims that an online contract has been concluded bears the burden of proof that the other party actually intended to enter into the contractual relationship and has had the opportunity to review all the relevant contract terms.
Proof of an online contract can be anything from negotiations referring to the terms and construction of the relevant site, to electronic or documentary evidence of an acceptance. Computer records or printouts are admissible as evidence of formation and terms of online contracts. The evidence submitted to the court must be in one of the official languages (ie, Finnish or Swedish).
For further information on this topic please contact Craig Thompson or Kati Määttä at Roschier Holmberg, Attorneys Ltd by telephone (+358 20 506 6000) or by fax (+358 20 506 6100) or by e-mail ([email protected] or [email protected]).
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