The legal position of consumers in respect of purchases from providers when the supplier goes bankrupt

On 18 November 2015 the Danish Eastern High Court made a decision in the case between the Danish Consumer Ombudsman acting for a consumer and Den Danske Rejsegruppe filial af Svenska Resegruppen AB that owns the website

The question of general public importance of this case was whether an online travel provider may be held liable for the loss suffered by a consumer due to the bankruptcy of an airline when the consumer has purchased his flight tickets from such online travel provider and not directly from the airline. The crucial factor was thus if the provider of a product or a service is considered the consumer's contracting party and is consequently liable for any loss due to the supplier's bankruptcy.

The case was about a consumer's purchase of a return ticket to Nice on the website The consumer flew SAS to Nice and was to fly Cimber Sterling on the return journey. In the meantime Cimber Sterling went bankrupt and the consumer bought a replacement ticket. The question was then whether the consumer could raise a claim against the provider of for the expense of the replacement ticket because the ticket from Cimber Sterling had been bought on their website. However, Den Danske Rejsegruppe denied any liability on the grounds that Den Danske Rejsegruppe was only the provider and not a contracting party.

In contrast to the District Court, the Eastern High Court did not find that Den Danske Rejsegruppe had clarified to the extent necessary that it was merely the provider and not a contracting party in relation to the consumer.

In this connection the Eastern High Court emphasised that:
  1. It is not common knowledge for consumers that travel agencies do not act in their own name in connection with the sale of flights
  2. On the basis of the lack of knowledge, see no 1., and on the basis of the general impression of the website the consumer could not assume that he was trading with the airline directly and not with Den Danske Rejsegruppe
  3. It was not expressly stated on the website that the customers did not trade with Den Danske Rejsegruppe but instead with the airline that was to deliver the flight
  4. On the basis of the information on the website it was not clear to the ordinary consumer just how important it was to the consumer that Den Danske Rejsegruppe was not a contracting party
The decision is based on well-known principles. The significance of the decision is the requirements that (i) the identity of the party with whom the consumer concludes an agreement must be expressly stated on a website and (ii) on the basis of such information the consumer must be able to assess how important it is to the consumer that the consumer does not conclude an agreement with the provider of the website. These are the factors to which the business community must pay special attention in future when they provide goods and services from other traders.

Read the Consumer Ombudman's press release about the case (in Danish).

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