Whether you are a professional or private supplier, it is important to be aware of the rules governing advertising, offers and sales in Switzerland, which are as follows:
- Every sale is preceded by considerable marketing and advertising efforts.
- The law protects buyers, especially consumers, against unfair commercial practices.
- Breach of trade rules results not only in loss of reputation or customers, but also in damages and fines.
- When it comes to e-commerce, Swiss law is more restrictive than we are used to in some countries, and the sales and advertising practices of the e-commerce giants are often illegal, so we must not blindly follow their “success model”.
- Some unfair clauses in the general terms and conditions are totally null and void, and do you more damage and confusion than protection.
- The law against unfair competition also protects the free and fair market, and gives injured competitors the right to compensation.
Main legal rules
In what follows, we will outline the main legal rules to be aware of in terms of unfair commercial practices to be avoided in Switzerland. Here are the most important points to remember:
Unfair competition
To talk about unfair competition, the following three cumulative conditions must be met:
- ault: an intentional act intended to harm a competitor, or an unintentional act (negligence).
- Damage: the existence of certain damage suffered by the competitor. Presumed or alleged damage is not sufficient, and ricochet damage is not taken into account either.
- The causality link: the competitor’s damage must be the result of the fault, i.e. a necessary causal link (without the fault there would be no damage) and adequate (according to general life experience, such a fault is reasonably likely to cause such damage).
Common unfair practices that harm competitors
The most common unfair practices that harm competitors are as follows:
- Imitation: using the same distinctive signs as a competitor. This technique is unfair when it creates confusion between companies in the mind of the consumer. It therefore concerns the essential elements that identify a company (company name, acronym, logo are good examples). It does not matter whether a competitor’s trademark is protected.
- Parasitism: this more subtle commercial technique involves taking advantage of a competitor’s efforts without participating in them. It is a global behaviour and not an isolated or specific act. For example, a competitor takes advantage of the reputation of a product already known to the public and manufactured by a competitor.
- Denigration: consists of openly and publicly criticising a competitor’s products. The criticism may also relate to its work or methods. However, the criticism must clearly identify the target company. The public nature of the criticism is essential: without it, denigration cannot be characterised.
- Disorganisation: this form of unfair competition can take several forms. In the majority of cases, it involves the mass and abusive poaching of employees. It can also involve revealing company secrets (manufacturing secrets, organisational secrets, etc.).
Common unfair practices that harm consumers
The most common unfair practices that harm consumers are as follows:
- Inaccurate or misleading price indications or comparisons.
- Spam: it is forbidden to send or forward mass advertising messages by e-mail, SMS or any other telecommunications channel without the consent of the recipients (opt-in principle). On the other hand, if you have given your address to a seller when making a purchase, the seller may send you advertising for similar products. The name of the recipient must be correctly indicated and the recipient must have the option of refusing the mail (opt-out).
- Opaque e-commerce: a site that is attractive to the eye does not necessarily mean that the seller is serious. All too often, information about the company or its contact details is missing, making it impossible, for example, to tell whether it is based abroad. This can increase the risk of mistakes being made when placing an order or over-clicking.
- Non-respect of the asterisk: This is one of the recurring complaints received by consumer protection associations. These include commercial calls to the home, which some people experience as harassment. From now on, all companies must strictly comply with the statement in the directory indicating that a customer does not wish to receive advertising messages. What’s more, their details may not be passed on for direct marketing purposes.
- Promises of a win linked to a purchase: these are considered unfair if the lucky prospect depends on a call to a premium rate number, the payment of a fee, or the purchase of an item or service. Furthermore, the promise of a prize must not be linked to participation in an advertising trip, a commercial event or another prize draw.
Recent reform on unwanted calls: From 2021, operators must filter unwanted calls. Legislation has also been strengthened to penalise advertising calls on mobile phones, spoofing and brokers working with call-centres that do not comply with the law.
Recommendations
To avoid the risks associated with unfair commercial and advertising practices, here are a few recommendations:
- Take care when using direct mail or telemarketing services, as you may be held liable for their failure to comply with unfair competition law.
- Don’t send mass spam to people you don’t know. You can still send advertising to your former customers, but only if you offer them the quick and easy option of refusing it, in which case respect their choice.
- Be careful when using comparative marketing, both to avoid concealing the facts and to avoid denigrating other competing companies.
- Even in the absence of a protected trademark or copyright, be careful not to copy and paste your competitors’ work product without another. Even if this content is not protected as intellectual property, its misuse is illegal.
- When using brokers or sales agents other than your employees, make sure you delimit the liability they assume if they violate unfair competition rules by offering your products.
In Switzerland, the subject of liability for defects, fault or negligence mainly concerns service and works providers, taking into account all of the following points:
- Service contracts may sometimes involve a transfer or modification of ownership, giving rise to strict liability for defects without fault being required.
- The performance of services often involves a number of subcontractors, whose misconduct may make you personally liable.
- Case law on the limitation or reduction of liability by contractual clauses is fairly restrictive.
- In addition to the responsibilities of the service provider, the customer or his agents may also make a mistake that affects the outcome of your work.
- Clarity in a contract is the key to success in order to avoid any complaints about the quality of services.
In addition, any website owner offering online services in Switzerland should be aware that system malfunctions, loss of data by the site host or cyber-attacks can cause significant damage to your customers and engage your liability.
Main legal rules
With regard to the legal rules governing the provider’s liability for defects, fault or negligence, here are the main points to note:
- A service contract, otherwise known as a mandate, does not commit the service provider (or mandatary) to the result, but only to the diligent fulfilment of its obligations.
- In principle, the service provider must commit a fault, whether intentional or negligent, regardless of its seriousness. However, in contracts governed by Swiss law, fault is presumed and it is up to the service provider to prove the contrary, where applicable.
- However, when the service provider undertakes to carry out work that results in the creation, modification or transfer of ownership of goods, it assumes liability for any material defect even if it has not committed any fault in this respect. This is known as a “contract of enterprise”. In this case, the transfer of risk is important, just as in a contract of sale.
- The seriousness of the fault is in principle irrelevant, but this question deserves to be qualified, through the following two points:
- A freelancer may or may not be a professional. A non-professional assumes less responsibility if he tells the client that he is not experienced enough to carry out a particular task and the client accepts the possible consequences.
- In other cases, accepting a mandate that the service provider is not sure of being able to carry out, not having enough skills, already engages his responsibility and he cannot free himself by simply declaring that he is not a professional.
- The performance of services often involves the intervention of subcontractors, substitutes, employees or other third parties.
- The service provider is fully liable for the negligence of its employees or directors.
- If there is a firm prohibition on delegating the performance of services to third parties, its breach already gives rise to liability on the part of the provider and no additional fault or proof of fault on the part of the subcontractor is required.
- In other cases, the service provider is in principle fully liable for the fault of external subcontractors, subject to limitations of liability to be agreed.
It should be noted that where the subcontractor does not perform only part of the service or only a subordinate task, but fully replaces the service provider, the latter is only liable for the care with which it chose and instructed the subcontractor. On the other hand, the substitute may be acted upon directly by the customer, subject to certain limits – the only exception in Swiss law in this area being that the substitute is not itself bound by the contract to the customer.
- It should also be pointed out that, in addition to contractual liability, there is civil liability which applies when the subcontractor or employee personally causes damage to the customer through his fault and by acting unlawfully. It should be noted that any attack on the property, life or body of the victim is in itself unlawful, without any particular law being broken. In this way, theft, destruction, damage or injury can be brought directly against the person responsible, as well as against the service provider through contractual liability.
- The law does not in itself prohibit limiting liability in the contract, but imposes some restrictions.
- Firstly, no limitation of liability is possible in the event of personal injury or damage to property, or even loss of life.
- Secondly, the contract does not take away the penal code, and the violation of the law cannot be forgiven simply because of the limiting contractual clause.
- Finally, if we accept that exoneration for slight negligence is possible, the limitation cannot apply to serious negligence or intentional wilful misconduct.
- The limitation of liability clause – entered into prior to the harmful event – is to be distinguished from the amicable settlement reached after the event. When the customer firmly accepts the performance of services without reservation, it is virtually impossible for him to hold the service provider liable for any damage.
Recommendations
To limit liability in contracts of enterprise, we recommend that you consider the following tips:
- In contracts for work and services, remember to clearly delimit the moment of transfer of risk using our contract templates, and the service provider will no longer be liable for damage or defects after this moment.
- As a subcontractor, be careful if you accept payment or instructions directly from your principal’s customer, as this may imply a tacit contract with him, whereas all the limitations of liability that you have agreed with your direct principal will no longer be enforceable against this customer who has not signed up to them.
- Always remember to limit your liability to the amount of fees paid during a certain period prior to the dispute.
- Even if you are contractually authorised to do so, always ask your customer for firm acceptance if you hire external subcontractors.
- Include a clause in the contract specifying the time limit after completion for reporting any defects in the service. If the customer accepts unreservedly that there is no defect, you can no longer be held liable.
Sellers of professional or private goods who sell to consumers in Switzerland are affected by these rights, taking into account all of the following rules:
- Consumers are protected not only by the justice system, but also by consumer protection associations.
- Non-professional consumers have difficulty interpreting ambiguous restrictive clauses, and so often do not consent to them validly, rendering them null and void.
- Consumers have more rights than professional buyers, and your duty to inform them is more extensive.
- Consumers are in principle protected by more favourable rules in their country of domicile, unless they travel abroad to buy, and international sales may therefore involve more extensive rights than are available in Switzerland. This is particularly true of the European Union, which gives consumers more rights.
Main legal rules
In what follows, we’ll outline the main legal rules you need to be aware of in terms of consumer rights in Switzerland. Here are the key points to remember:
- Firstly, it is important to clarify who the consumer is. He is a person who buys goods only for his own personal consumption, admittedly he may resell them to a third party at a later date, such as a second-hand car, but without the resale being the main reason for the purchase.
- A company never acts as a consumer, but the situation of a sole trader or freelancer is more complicated.
- Indications that the buyer is more of a professional include registration in the commercial register, VAT registration, publication of the commercial website, the commercial trademark used or registered, the use of professional emails, etc.
- The mere promise or statement that the buyer is not a consumer is not in principle sufficient.
- The particular right of any consumer is the right of cancellation. Unlike business buyers, who in principle have no legal right to cancel the agreed sale if there is no defect or delay, consumers can cancel the sale without reason in the following circumstances:
- Door-to-door sales of goods worth at least CHF 100, sold by a professional. However, this is not the case if the consumer has expressly requested the negotiations or if he was at a market or fair stand.
- The right of revocation may be exercised when the consumer has been approached at his place of work or home, on public transport or on the public highway, at an advertising event or by telephone or similar voice telecommunication means.
- The period for revoking the sale is 14 days.
- Unlike in EU countries, there is no general 14-day right of withdrawal after concluding an online sale, but EU law does apply when you sell to consumers domiciled in the EU. However, this rule applies to any member of a commerce.swiss association and constitutes general practice in the field.
- For sales over the counter in a shop, there is no right of cancellation, and the only way to get out of the contract is to establish a defect in consent at the time the sale is concluded, such as error, deception or coercion.
- When buying online, consumers are protected by the right to clarity and transparency regarding the identity and conclusion of the contract on the part of the online trader.
- With regard to general terms and conditions, the law prohibits and renders null and void clauses which, contrary to the rules of good faith, provide, to the detriment of the consumer, for a significant and unjustified disproportion between the rights and obligations arising from the contract. Unlike European law, there is no ‘grey list’, and each case is assessed on its own merits.
- Unlike in other European countries, there is no maximum delivery period, as deadlines are freely stipulated in the contract. However, providing unreasonably short but impossible delivery times to attract customers is an unfair commercial practice, and therefore prohibited.
- Online retailers must provide the minimum information necessary for consumers:
- Clearly and completely state your identity and contract address, including e-mail address
- Indicate the various technical steps leading to the conclusion of a contract. In practice, ambiguous buttons such as “Continue”, “Finish” or “Next” are not suitable. Instead, use the “Buy” or “Order with obligation to pay” buttons.
- Provide the appropriate technical tools to detect and correct input errors before sending an order.
- Confirm the customer’s order without delay by e-mail.
- Additional requirements apply to the indication of prices to consumers:
- The price must be stated in Swiss Francs, including non-optional extras of all kinds.
- The price and all relevant information concerning it must be clearly visible and easily legible near the goods illustrated or described.
- Non-optional extras must be included in the price, as they are imperatively associated with the purchase of the goods and cannot be omitted, e.g. VAT, copyright fees, recycling fees for household appliances, etc.
- Shipping costs may be indicated separately, as they may vary according to the volume of the order, but they must also be visible and easily legible.
To better manage the rules governing consumers’ main rights, here are a few golden recommendations to bear in mind:
- Please clearly state whether you intend to sell only to professionals or also to consumers. Different rules must be followed and applied. Our templates allow you to deal separately with the rights of consumers and those of professional buyers.
- Clearly assess whether or not you wish to offer online products to consumers in other countries. In this case, we recommend that you create another web domain with terms and conditions adapted to these countries.
- Don’t forget to include the necessary information about the merchant and the products on the website. Pay particular attention to prices and charges or taxes.
- Make sure that the buttons on the website are clear and unambiguous, and that you clearly state the order summary before confirming it.
To protect yourself against consumer complaints, you can use our model sales contracts.
Sellers of professional or private goods, whether they sell to consumers or businesses in Switzerland, are affected by the rules on delivery and liability.
Here are the main points to be aware of under Swiss law:
- If you are late, you risk not only a cancellation of the sale, but also an action for additional damages.
- Proof of delivery is the seller’s responsibility, and it is up to the seller to decide how to provide it properly.
- Interpreting the appropriate period, the absolute period or the indicative period can be difficult, and doubt favours the buyer rather than the seller, even more so if the buyer is a consumer.
- Although the seller must fulfil its obligations within a certain period, it is not always the seller who causes the delay. This may be due to the fault of a third party or of the buyer himself, or even force majeure, and all such cases must be clearly demarcated between the parties.
Any private individual who sells goods privately is also affected, since the seller’s liability is not reduced if you are not a professional.
Main legal rules
Now that we have an overview of the context, let’s look at the main legal rules governing delivery times. Here are a few key points to bear in mind:
- Firstly, it is appropriate to distinguish according to the type of time period agreed, or whether it was agreed at all, according to the following rules:
- An agreed deadline is generally understood as an indicative deadline, allowing for a slight delay.
- It must be clearly stated in the contract that a delivery must absolutely be made by a certain date or even time, on pain of cancellation. This could be the case for the delivery of a wedding cake, where a delay of one day cannot be tolerated.
- If no time limit has been agreed, performance is in principle due immediately.
- Secondly, any delay is not necessarily the seller’s responsibility. In fact, if you have agreed that a delivery will be made by the third-party carrier, and the seller’s obligations are fully performed when the goods are handed over to this carrier, the seller is no longer liable for any delay once the goods have been handed over within the agreed time.
The deadline therefore relates to the handover of the goods to the carrier and not to the buyer.
- If the buyer notices a delay in delivery, he must give the seller formal notice and set a suitable final deadline, failing which the contract will be terminated and any sums paid refunded.
- The fact that the goods have been delivered or dispatched must be proved by the seller, where applicable. There is no legal list of accepted means of proof, and each situation is assessed on a case-by-case basis, taking into account the circumstances and general practices in this area.
- In the event of delay, the seller is not only exposed to the risk of cancellation of the sale, but also to any claim for damages. This may be the case if the buyer has to buy a product of the same type, but at a higher price, or if he has to hire a car urgently before a car ordered is delivered.
- Unless otherwise stated in the contract, the price is due only when the sale is performed. The seller cannot pursue payment of the price if it has not itself performed its obligations. However, providing for a specific date for payment instead of a period after delivery, or providing for a deposit, enables the price to be demanded despite the delay.
- The seller’s liability is not automatically waived if the delay is attributable to its staff, subcontractors or third-party carriers. These questions should be addressed in the description of the transfer of risks, the seller’s main obligations and the deadlines.
- There is no automatic right for the buyer to claim price reduction for delay. Moreover, damages because of delay are quite difficult to quantify and prove. So a flat-rate penalty for each day or hour of delay may be worth considering.
To avoid disputes linked to late delivery, here are our recommendations:
- Remember to clearly indicate the sales deadlines laid down, either in the individual sales contract or in the general terms and conditions of sale, and to clearly specify or exclude the period of delay to be tolerated, depending on your needs.
- For regular sales from stock, including online sales, remember to include in your general terms and conditions a deadline for confirming the availability of an item, so that you are not committed until confirmation is given. This will at least avoid you having to pay damages for delays in relation to the general deadlines, as you are not yet bound by a sales contract before this confirmation is given.
- Clearly define whether your obligations are to hand over the goods to the carrier, to deliver without unloading or with unloading, and who assumes the reciprocal responsibilities.
- Given that your most important means of pressure is to control the price paid, consider demanding a deposit as a guarantee. Procedurally, this reassures you that the buyer can only claim his rights in court, without simply refusing to pay the price when the delay is not your contractual responsibility.
- Use our templates to clarify what happens when the delay in delivery is due to the buyer’s fault. He has no firm obligation to do so, but must attend the delivery as far as possible, or risk losing his rights. This is the case if the buyer has given a wrong address or does not show up at the agreed delivery time.
- Remember to settle the outcome of non-delivery, particularly if the buyer does not collect the goods. Can you leave it outside the door? Can you post back at the buyer’s expense?
- And don’t forget to work out how proof of delivery is to be provided to avoid any misunderstandings. Proof – this is the most important thing in any dispute.
- The above options can be used to protect you with our model sales contracts and general terms and conditions.
In Switzerland, the seller’s liability for defects in goods applies to all sellers of goods, whether they are selling to consumers or businesses, and whether they are professionals or private individuals.
Here are the different rules governing this responsibility:
- The seller is liable for defects even if he is not at fault or was unaware of them.
- Although the seller’s liability is often limited, there are limits.
- The contract of sale must not only regulate how the transaction will proceed if all goes well, but above all must provide for and resolve in advance all issues relating to defects, their discovery, repair and the buyer’s rights, as well as limiting these rights as far as possible.
- The absence of a written sales contract does not mean that you, as the seller, do not undertake to guarantee the quality of the goods sold.
Any private individual who sells second-hand goods privately is also affected, since the seller’s liability is not reduced in the case of used goods, but specific safeguards can and must be stipulated in the contract.
Main rules governing the seller’s liability for defects
The following is a list of the main legal rules on the seller’s liability for defects in Switzerland. Here are the main points to bear in mind:
- By entering into a contract of sale, the seller gives a guarantee on account of defects in the thing, i.e. he is liable in respect of the promised qualities as well as defects which deprive the thing of either its value or its intended usefulness or which diminish them.
- The seller is liable for defects even if he was unaware of them, and even if he has not committed any personal fault. His liability is said to be objective.
- The seller is only liable for defects which the buyer should have noticed himself by examining the thing with sufficient care, if he has affirmed that they did not exist.
- It does not matter whether the goods are sold as a balance of stock, with a discount, at a reduced price or with other benefits or additional services. However, the parties often agree, in the sale of second-hand goods, that the reduced price is due to an existing defect, which the customer accepts against a reduction in the price and consequently waives any claim due to this known and accepted defect.
- The seller may in principle stipulate in a contract or in the general terms and conditions to reduce or limit his liability. But this is not without limits – any clause that removes or restricts the warranty is void if the seller has fraudulently concealed the defects of the thing from the buyer.
- The buyer is obliged to check the condition of the item received as soon as he can according to the usual course of business; if he discovers any defects for which the seller is liable, he must notify the seller without delay. Otherwise, the item is deemed to have been accepted, unless the defects were ones that the buyer could not discover by means of the usual checks.
- In the event of defects being discovered, the buyer shall in principle have the following rights:
- Cancel the sale and demand restitution of the price, including partial cancellation if part of the things sold are defective.
- To request a proportional reduction in the price.
- For fungible goods, request replacement of the goods with items of the same kind.
- Contractual clauses allowing only a right to repair are often appreciated.
In the event of cancellation of the sale, if the defective item has perished as a result of its defects or an act of God, the buyer is only obliged to return what remains of the item. For the rest, the buyer is obliged to keep the item and examine it regularly, and cannot simply return it to the seller without further formality.
Liability for defects passes to the buyer at the time of transfer of risk. The time specified in the contract – for example, handover to the carrier or delivery – is decisive. After this point, the seller is not liable for the loss, damage, theft or destruction of the goods.
In this final section, we’ll give you some recommendations on how best to manage your liability for defects as a seller in Switzerland. Here is our advice:
- Remember to clearly delimit the moment of transfer of risk using our sales contract templates, which will enable you to determine whether the buyer should take action against the seller or the carrier in the event of damage to the goods during transport.
- For the sale of second-hand goods, it is always advisable to specify any known defects or damage, and thus accepted by the buyer without reservation.
- Depending on the type of goods sold, you can choose an option in our templates to give preference to certain measures, such as replacement or repair rather than a price reduction or cancellation of sale.
- Don’t forget to use our option to limit the seller’s liability, often equivalent to the full price paid. This will protect you against further claims from the buyer, for example if a computer burns down and damages some personal or office property.
- The buyer’s most important means of protecting his rights is to refuse payment of the price. However, always remember to provide for payment in advance or a guarantee deposit, to avoid the buyer not paying you, believing that the goods are faulty, when they are not.
All these options are available in our various sales contract models.
- Where a sale has been made orally, the goods handed over and the price paid, it is preferable to formalise it in a bill of sale, which relieves the seller of any liability and confirms that any defects, if any, are duly examined and accepted by the buyer after the transaction.
Any Swiss or foreign company employing staff in Switzerland must give them holiday entitlement, taking into account all of the following points:
- Holidays must be paid for, which can mean a sudden additional cost for untaken holidays over several years.
- In addition to equivalent pay, compensation may be payable in the event of non-compliance.
- Holiday entitlement is monitored by the competent authorities.
- Holidays must be taken in full within a year and up to the last day of work in the event of dismissal, even if the employee refuses to take them in full.
- Holiday pay is also subject to contributions and tax, where applicable.
Human resources, both internal and external to the company, play a crucial role in drawing up employment contracts and handling employee complaints.
Among others, private individuals who employ domestic staff (cleaning, nannies, gardeners) are also affected by this issue, as they must grant a minimum amount of paid leave even for part-time, irregular or hourly workers.
Principal rules on vacations
The following is a list of the main legal rules on minimum paid holidays for employees in Switzerland. Here are the main points to bear in mind:
- All employees are entitled to a minimum of 4 weeks’ paid holiday per year. This increases to 5 weeks for employees under the age of 20.
- Most collective labour agreements provide for 5 weeks’ holiday for staff who have reached the age of 50 or who have worked for the same employer for 20 years.
- In the case of part-time work, holiday entitlement is reduced proportionately. For example, a 100% employee working 5 days a week is entitled to 20 working days’ holiday (plus Saturdays and Sundays), while an 80% employee working 4 days a week is entitled to 16 working days’ holiday per year.
- Holidays may not be compensated in cash, subject to the holidays remaining on the days of dismissal or resignation. In particular, the employer may refuse to allow the employee to take all of his holiday during the termination leave for just reasons and legitimate business needs.
- An illness or accident that does not allow you to rest during your holiday does not count as holiday taken.
- National or cantonal public holidays do not count as holidays.
- Holidays are agreed between the employer and the employee, but the employee is entitled to at least 2 consecutive weeks’ holiday. In addition, the employer will take into account the employee’s particular needs and will generally grant holidays during school holidays if the employee has children, or the right for spouses working in the same company to take holidays at the same time. On the other hand, employees may be obliged to take holidays during periods when the company is closed.
- During holidays, the full salary must be paid. In addition, salary supplements must be paid, including the variable salary to be paid proportionally. This is based on the average salary paid over the last 12 months.
In this final section, we’ll give you some recommendations on how best to manage minimum paid holidays for employees in Switzerland. Here are our tips:
- Take into account the employee’s age and family situation.
- Also consult the UNIA website to find out if there is a CLA providing for higher holidays than the law: https://www.service-cct.ch/
- Carefully record hours worked, sick leave, absences, holidays, public holidays and any other payroll information.
- Use our staff regulations template to set out the general holiday plan, the deadline for requesting holidays, their duration and other essential points to protect you.
- Or negotiate holiday conditions with full rights and restrictions for each employee separately, taking into account their personal situation and workstation.