Formation of Contracts in Online Commerce: The Significance of the ‘Buy Now’ Click
The digital transformation of commerce continually raises new questions in contract law. A recent decision by the Munich District Court (Az. 91 C 1446/22, published on 21.05.2024) sheds light on the key question of whether clicking the ‘Buy Now’ button in an online shop actually constitutes a binding purchase contract. Contrary to common assumptions, the court determined that under certain circumstances, a legally binding contract does not arise despite clicking ‘Buy Now’.
Background of the Judgment and Relevant Legal Provisions
The court ruling specifically refers to the provisions in sections 145 et seq. of the German Civil Code (BGB), which govern the submission and acceptance of declarations of intent as well as the formation of contracts. At its core, it concerns the legal qualification of an order placed by mouse click—as an offer, or as a non-binding invitation to submit an offer (invitatio ad offerendum).
In the underlying case, the buyer had clicked the ‘Buy Now’ button on an online platform and subsequently discovered that the offer was no longer available on the platform and that no binding order confirmation was issued by the provider. The buyer then demanded delivery of the goods or compensation for non-performance.
The Legal Classification of the ‘Buy Now’ Click
The Offer in Electronic Commerce
Sellers usually design the presentation of goods and services on online platforms so that a purchase can be completed with minimal effort. Nevertheless, it is legally necessary to distinguish whether the click on ‘Buy Now’ already constitutes an offer, which the provider can convert into a contract by accepting, or whether the product presentation is merely an invitatio ad offerendum. The Munich District Court clarified that under the given circumstances, the customer’s order did not yet constitute a legally binding declaration of intent within the meaning of an offer, but merely an unverbindliche inquiry.
Order Confirmation as the Decisive Point at Which the Contract is Formed
For a contract to come into existence, an explicit declaration of acceptance by the provider—such as an explicit order confirmation—is generally required. If this is lacking, no contract is concluded, even if the ‘Buy Now’ button was previously clicked. Especially in online trade, it is common to send a confirmation of receipt after the order is placed, but this does not yet constitute acceptance in the legal sense.
The Munich District Court stated that the provider in this case had not evidently issued a binding acceptance. The immediate order confirmation after clicking ‘Buy Now’ should be regarded merely as a notification of receipt and not as a contract-forming declaration of acceptance. In the absence of such acceptance, the buyer had no claim for fulfillment of the alleged contract.
Impact on the Structure of Online Ordering Processes
Transparency of Button Labeling and Design of Ordering Processes
Online providers are obliged under section 312j BGB to design the key contract features and the button labeling in a clear and unmistakable manner, in order to transparently inform consumers about the legal consequences of their actions. Nevertheless, clicking a correspondingly labeled button does not, in every case, immediately result in a contract. Rather, it must always be assessed from the overall context of the offer presentation, order process, and the communicated acceptance conditions as to whether binding contractual relationships are established.
Ongoing legal uncertainties regarding contract structuring—particularly for companies with an international client base—can arise due to differing court practices and national peculiarities in distance selling law. It is therefore advisable to structure the ordering processes and contract acceptance rules in a manner that ensures clarity regarding the formation of the contract for both consumers and providers.
Relevance for Businesses and Private Individuals
The decision of the Munich District Court underscores that even seemingly clear actions in the digital order process do not automatically lead to a contractual relationship. For businesses, investors or private individuals who regularly operate in e-commerce, careful legal structuring of contract modalities is essential to avoid future disputes over the formation or non-formation of contracts.
Conclusion and Outlook
The recent judgment clarifies that in online trade, clicking ‘Buy Now’ does not necessarily constitute the conclusion of a binding purchase contract. The decisive factors remain the circumstances of the individual case, the structure of the order process, and the existence of an express declaration of acceptance by the provider. Companies must therefore continue to regularly review and adapt the legal framework of their online shops to ensure clarity regarding the conclusion of contracts.
If you have any questions about the legal requirements for online ordering processes or about contract structuring in electronic commerce, the Rechtsanwalt at MTR Legal are available to provide you with an individual analysis of your situation.
