General contract law rules in Estonia are the same for business-to-business and business-to-consumer contracts. The main difference is that contractual freedom between the parties is greater in business-to-business relations. This means that in a relationship between two undertakings, it is possible to form their own contractual relationship to a greater extent, including by departing to a certain extent from the contractual rules laid down by law.
In relation to contracts concluded with a consumer, the trader must take into account the various special rules laid down by law in order to protect the consumer as the weaker party in the contractual relationship. This is the case for consumer sales, consumer credit, and other contracts. As a rule, it is not possible to deviate from the provisions of the law upon agreement to the detriment of the consumer.
In a contractual relationship, the other party to the contract who has supplied the product or service to the consumer shall be liable for deficiencies in the delivered product or service.
General rules on the conclusion and validity of contracts, general legal remedies etc. are particularly important to undertakings as regards contract law. These are provided for in the Act on the General Part of the Civil Code and the Law of Obligations Act.
More information on contracts and their conclusion can be found in the article ‘Contracts and entering into contracts’.
In addition to these general rules, the Law of Obligations Act lays down the rules for specific types of contracts, such as sales contracts, leases, credit agreements and various service contracts. These rules define the main obligations of the parties and provide for specific rules according to the specificities of a particular type of contract.
For more information on the legal remedies available according to Estonian law, see the article ‘Performance and breach of a contract’.
E-commerce and off-premises contracts
Remote and off-premises contracts are subject to the rules arising from EU consumer protection law in Estonia. Since, in the case of remote contracts, consumers are not able to acquaint themselves with the goods in the same way as in an ordinary shop and, in the case of an off-premises contract, the possibility of concluding the contract may be unexpected and may therefore not be properly considered, the trader is obliged to provide the consumer with comprehensive pre-contractual information and the consumer has a period of 14 days to think about it before signing the contract.
If consumers carry out a transaction on the business premises of the trader, they are not entitled to withdraw from the contract without giving any reason, and the pre-contractual information provided to them is not as comprehensive.
Contracts for the supply of digital content and the provision of digital services
Contracts for the supply of digital content and digital services are classified in Estonian law according to which contract the parties conclude between themselves and what services they owe each other on that basis. In principle, the supply of digital content or digital service in Estonia may be a sales contract, a lease contract, a contract for services, or an agency contract. This depends on the content of the specific contract. In addition, the provisions of license agreements also apply in parallel.
Late payments
In the event of delay in the performance of a financial obligation, the creditor may charge the debtor default interest as of the time the obligation becomes due until its proper performance.
If the rate of interest for late payment is not contractually agreed, the creditor can claim interest at a statutory rate.
Further information on late payment and the statutory interest rate can be found on the e-justice portal.
In addition to the claim for interest for late payment, the creditor can also claim compensation for the collection costs of the debt. The rules on collection costs vary depending on whether the debtor is a consumer or a trader.
In any event, if the debtor is a trader, the creditor is entitled to obtain a fixed sum compensation in the amount of EUR 40. This rule is based on the Late Payment Directive. The parties may contractually agree on higher compensation and the creditor shall be entitled to obtain higher compensation than the fixed amount if they have incurred more damages than this.
If the debtor is a consumer, the creditor is also in principle entitled to obtain compensation for collection costs, but, for the purposes of consumer protection, the amount of collection costs able to be charged to the consumer is limited. A distinction shall be made between the circumstances during the term of the contractual relationship and after the end of the contract.
During the term of the contract, the creditor shall be entitled to obtain compensation for collection costs for only one reminder letter of up to EUR 5 in respect of each obligation which has become due. Before that, the creditor must send the consumer one reminder letter free of charge.
After the end of the contract, the creditor shall be entitled to obtain compensation for collection costs up to EUR 30 in the case of a debt of up to EUR 500, up to EUR 40 in the case of a debt between EUR 500 and EUR 1 000, and up to EUR 50 in the case of a debt of more than EUR 1 000. It is not possible to contractually agree on higher compensation. The creditor may claim damages in excess of those limits only in exceptional circumstances, in particular if collection measures have been exceptionally complex.
If the debtor does not comply with the creditor’s claims, the creditor shall be entitled to take legal action to defend their rights. Once the creditor has obtained an enforceable title from the court, the creditor can approach a bailiff who shall then enforce their claim against the debtor. For more information on bailiffs, visit the homepage of the Chamber of Bailiffs and Trustees in Bankruptcy.