In furtherance of ensuring consumer protection, the Ministry of Commerce (“MOC”) issued Prakas 0113 on Cooling-Off Period dated 11 April 2022 (“Prakas 0113”). Prakas 0113 sets out a legal framework that gives consumers a right to unilaterally withdraw from a contract of supplying goods or services during the specified cooling-off period with the aim to promote consumer trust in distance sales or door-to-door sales (“D2D Sales”) of goods or services.
How Cooling-Off Period, Distance Sale and D2D Sale are Defined
The cooling-off period is defined as a specific period that allows a consumer to unilaterally withdraw from a contract of supplying goods and/or services by providing a written notice after the receipt of such goods and/or services, and even if there is no default from the business operator.
A distance sale means any transaction of sale or purchase of goods and/or services that is indirectly undertaken without the presence of the parties at the place of business of the business operator including sales through radio, TV, phone call, magazine, e-commerce, leaflet, and social media, and other distance sales in which the consumer has no chance to examine the goods and/or services.
A D2D Sale encompasses the sale or purchase of goods and/or services undertaken by the business operator (or by an employee, an agent, or a representative of the business operator) at the consumer’s residence, workplace, public place, or other locations that do not belong to the business operator.
Obligations of the Business Operator to Comply with the Cooling-Off Period
A business operator in distance sales or D2D Sales is required to stipulate a term in a contract that allows consumers to unilaterally withdraw from such contracts during the cooling-off period without requiring the consumers to specify a reason for such withdrawal and be liable for any expenses except as specified in Prakas 0113.
Before entering into a contract, the business operator must inform and explain to the consumers about their right to withdraw from the contract and other key information including identity of the business operator, method of communication and return policy.
To withdraw from a contract during the cooling-off period, the consumers must submit a written application/notification form of withdrawal to the business operator. If the business operator fails to provide procedures regarding contract withdrawal to the consumers, it is deemed that the notification is delivered to the business operator if such a notification is sent to the place of business or email address of the business operator. The burden of proof regarding the delivery of the notification rests on the consumers.
The cooling-off period is seven (7) calendar days and the specific method of counting of the cooling-off period for the supply of service or goods under the distance sale or D2D sales is further discussed in Prakas 0113.
In addition, Prakas 0113 stipulates certain situations that the consumers will be responsible to the business operators for expenses related to the goods or services. These includes, among others, when there is any degradation of value of the goods or damage to the goods due to a consumer’s act or default of obligations under the contract and, for services, expenses for services performed to the consumers until the date when the withdrawal notification is sent to the business operator.
Cooling-Off Period Exemptions
Cooling-off period is not applicable if the business operator conducts the sale following a trialed use of the product. In addition, cooling-off period does not apply to supply of goods in the following circumstances (among others):
- the fee of the supply of goods fluctuates depending on financial markets, which are beyond the control of the business perator and when such fluctuation occurs during the cooling-off period;
- the supply of goods that are produced based on a consumer’s special order;
- the goods have a short expiry date for use (not exceeding 30 calendar days);
- the goods that have had a package torn by the acts of consumer and cannot be returned for the reason of sanitation and health safety;
- the supply of goods worth no more than KHR 200,000 (approximately USD 50); and
- gifts and/or discounted goods.
A cooling-off period does not apply to supply of services in the following circumstances (among others):
- the service is completely rendered before the end of the cooling-off period when the consumer has confirmed the service with written consent and waiver of rights on the cooling-off period;
- the fee for the supply of services fluctuates depending on financial markets, which are beyond the control of the business operator and when such fluctuation occurs during the cooling-off period;
- maintenance or repair service is urgently rendered at a consumer’s residence, after such an action was specifically requested by the consumer;
- any banking services; and
- all contracts that are worth no more than KHR 200,000 (approximately USD 50).
Business operators who fail to stipulate the consumer’s right to withdraw from the contract during the cooling-off period are subject to a fine of up to KHR 10,000,000 (approximately USD 2,500). In addition, a business operator can be punished over the offense of unfair practices, and subject to monetary fines not exceeding KHR 50,000,000 (approximately USD 12,500) if the business operator requires the consumer to pay damages when the consumer exercises the right of withdrawal during the cooling-off period.
Should you have any concerns or queries on the matters mentioned above, please contact us at firstname.lastname@example.org.
The information provided here is for information purposes only and is not intended to constitute legal advice. Legal advice should be obtained from qualified legal counsel for all specific situations.