The General Conditions of Sale (GCS) contribute to a fundamental contractual document for any business that wishes to operate in the Spanish market. The content of these conditions varies depending on the type of client and the company’s sector of activity. Sector and client criteria determine the legal framework to which they must conform.
We analyse the GCS from the perspective of Spanish law, first defining GCS and then addressing its legal framework and content, differentiating according to the type of client (company or consumer).
General Conditions of Sale, definition
In Spain, Article 1 of Law 7/1988, of 13 April, on General Conditions of Contract (GCC) indicates that General Conditions of Contract are pre-established clauses whose incorporation into the contract is imposed by one of the parties, regardless of their actual authorship, their external appearance, their length and any other circumstances, having been drafted to be incorporated into a plurality of contracts.
In other words, GCS, also known as General Conditions of Contact (GCC), are rules that regulate the contractual relationship between a professional and their client about the products marketed or services provided. These conditions are usually drafted unilaterally and intended to be attached to various contracts.
General Conditions of Sale, legal regime
The legal framework of the GCS varies according to the type of customer they target.
Similarly, the GCS need adjustment to match the sector where the product or service is provided. For products or services that fall under regulated sectors such as finance, insurance, telecommunications, healthcare, or others, the GCS must conform to the specific legal framework of that sector.
Content of the General Conditions of Sale
GCS intended for entrepreneurial or professional clients (GCS B2B)
Entrepreneurial concept
As a preliminary step, it is necessary to clarify the entrepreneurial or professional concept according to Spanish regulations. The definition is in Article 4 of Royal Legislative Decree 1/2007 of 16 November, approving the revised text of the General Law for the Protection of Consumers and Users and other complementary laws.
Under said article: (…) an entrepreneur is considered to be any natural or legal person, whether private or public, acting directly or through another person on their behalf or following their instructions, with a purpose relating to their commercial, business, trade or professional activity.
In commercial relations between professionals, especially at the international level, businesses usually resort to standardised models of GCS or framework contracts drawn up by international agencies, chambers or professional associations that contain the usual rules and practices of the relevant industry. For example, the INCOTERMS of the International Chamber of Commerce and the international construction contract FIDIC of the “Fédération Internationale des Ingenieurs-Conseils.
On other occasions, companies unilaterally develop their own GCS, applying the provisions of the Commercial Code and the Spanish Civil Code.
Content
Including essential elements in the GCS safeguards the company’s interests and establishes legal certainty within the contractual relationship.
These elements include:
- Identity of the professionals
- Characteristics of the goods or services subject to contract
- Total price of products or services, including taxes and any other applicable expenses or fees
- Procedures and conditions of payment, deadlines and other details
- Reservation of ownership of products
- Delivery of the products
- Execution of the service (method, deadlines, means, among others)
- Duration of the contract
- Regime of risk, damage or loss of the products
- Regime of liability and its limitation
- Regime of hidden defects of the products
- Regime of guarantees of the products
- Legal regime in case of force majeure
- Aspects related to intellectual and industrial property
- Regime of unilateral resolution or mutual agreement
- Competent jurisdiction in case of disputes
- The law applicable to the contract
- Data protection policy
- Other relevant aspects
General Conditions of Sale intended for Business to Clients (GCS B2C)
Concept of Consumer
The GCS aimed at consumers, also known as B2C (Business to Clients) are subject to a mandatory legal framework and defined in the Royal Legislative Decree 1/2007, of 16 November.
According to Article 3, the consumer or user is the natural person who acts for a purpose unrelated to their commercial, business, trade or professional activity.
Also included in this category are the legal persons (…) acting on a non-profit basis in a field unrelated to commercial or entrepreneurial activity.
Content
Regarding the content of the General Conditions of Sale B2C, although Article 60 of Royal Decree 1/2007 of 16 November refers to the pre-contractual information, it establishes the obligatory clauses to include in this type of GCS.
Among others, the second section of the Article specifically lists:
- The main characteristics of goods or services
- The identity of the entrepreneur (company name, trade name, complete address, telephone number, and in the case of acting on behalf of another entrepreneur, the identification of the latter
- The total price, including taxes and additional transport fees, delivery or postal. If not precalculable, the method to determine them.
- The payment, delivery, and execution procedures, with the corresponding dates
- A reminder of the existence of a legal guarantee of conformity for the goods, the conditions of after-sale service and commercial guarantees
- The duration of the contract
- The language or languages of the contract
- The withdrawal right, encompassing its duration and the approach for its exercise, should ideally be accompanied by an attached withdrawal form.
- The procedure for handling complaints and information regarding the extrajudicial system of dispute resolution
Failing to comply with this minimum content can lead to negative consequences for the business and possible consumer-related conflicts.
The General Conditions of Sale (GCS) represent an essential contractual document for any business that looks to operate in Spain. Hence, the relevance to formulate and adapt the GCS according to the prevailing laws in Spain, ensuring a solid basis and adherence to all legal prerequisites.
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