News Alerts

Carey News Alert Law: Law 20,146 (“SMB Statute”) and its impacts on consumer protection
June 6, 2010


c) Conscionable stipulations and performance of adhe­sion contracts: adhesion contracts used by suppliers cannotinclude unconscionable clauses. Otherwise, those clauses orthe contract in its entirety may be voided.

Likewise, all formal requirements for adhesion contracts mustbe complied with (legibility, font size and language).

d) Liability for breach: the provisions related to productwarranties will apply to relations between SSBs and theirsuppliers, with a statutory warranty in favor of SSBs.

Likewise, electronic contracting of goods and services between SSBs and suppliers must adhere to the provisionsunder the Consumer Protection Law in all matters relatingto the creation of consent, confirmation of contracting,complete and clear access to contractual terms, amongother things.

c) Conscionable stipulations and performance of adhe­sion contracts: adhesion contracts used by supplierscannot include unconscionable clauses. Otherwise, thoseclauses or the contract in its entirety may be voided.

Likewise, all formal requirements for adhesion contractsmust be complied with (legibility, font size and language).

d) Liability for breach: the provisions related to productwarranties will apply to relations between SSBs and theirsuppliers, with a statutory warranty in favor of SSBs.

e) Information and advertising: provisions related to advertising, spamming, promotions and offers shall applyto SSBs in their relations with suppliers.

f) Promotions and offers: see e) above.

g) Credit: if suppliers extend credit to SSBs in the purcha­se of goods or services, all the regulations under the Con­sumer Protection Law must be complied with in relation toreporting and collection duties.

II.- Role of SERNAC

SERNAC has no competent jurisdiction in relation to MSBs, i.e. it cannot mediate to look for an out-of-court solution (as it does with other consumers).

Now, the SMB Statute says that MSBs do have the right to press charges for violations of the Consumer Law at a Local Police Court (the court seated at the location where the violation took place or where the act or contract was performed or executed or performed is competent, at the plaintiff’s discretion), thus pursuing all the sanctions and indemnifications deemed applicable (all governed by the Consumer law). Also, MSBs can file class action suits. Trade associations that group said MSBs may also bring class actions.

To impose fines, the judge must be particularly mindful of the amount of the claim, the objective parameters that define the supplier’s duty to act professionally, the extent to which information is asymmetrical between the offender and the victim, the benefit obtained from the violation, the seriousness of the damages caused, the risk to which the victim or community is exposed and the financial situation of the offender.

Please contact us if you have any doubts or questions.

Kind regards.



AUTHORS: Guillermo Carey, José Ignacio Mercado.



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