Proposal for a
EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE
on the sale of consumer goods and associated guarantees
(presented by the Commission of the European Committees)
Explanatory Memorandum
I. General
A. Context
1. Since its first preliminary programme for a consumer protection
and information policy, [34]
the various Community institutions have on several occasions requested
the Commission to present proposals with a view to improving guarantee
arrangements and after-sales services. The progressive completion
of the single market gives further cause to address these problems
at Community level.
Hence, in its proposal for a Council Directive on unfair terms
in consumer contracts, [35]
the Commission finally proposed harmonisation of certain aspects
of the legal and commercial guarantee for movables and the legal
guarantee for services. These proposals were backed by the European
Parliament. However, the Council thought it more appropriate to
deal with these matters separately and in greater depth and refused
to include these provisions in the Directive on unfair terms,
inviting the Commission to examine the opportunities of harmonising
guarantee schemes in the Member States relating to consumer contracts
and, on this basis, to submit to it, if relevant, a proposal for
a Directive on the harmonisation of national legislation in this
domain. [36]
In the meantime the Commission has conducted an in-depth analysis
of the "usefulness and desirability of approximating guarantee
arrangements and improving after-sales services for goods and
services in the internal market"
[37]. This
analysis was conducted in the context of wide-ranging consultations
in the wake of the Green Paper on guarantees for consumer goods
and after-sales services. [38]
The impact assessment annexed to this proposal surveys the results
of these consultations.
This proposal is also a necessary complement to Directive 93/13/EEC
concerning unfair contract terms. This Directive assures all consumers
a uniform minimal level of protection throughout the European
Union with regard to contract terms governing all transactions
with professionals. Irrespective of the place of purchase, European
consumers have the same protection everywhere with regard to unfair
general conditions of sale. However, this Directive only concerns
clauses governing the modalities of a transaction and is silent
as regards the consumer's rights in the event of bad performance
of a contract. Thus, at present, a clause in a sales contract
excluding the vendor's liability for any defects in the good sold
is void as against the consumer, while the concrete rights that
the consumer can rely on in such a case are somewhat quite different
according to the State where the good was purchased. This proposal
seeks to guarantee a uniform minimal level of protection for consumers
throughout the Union.
The need for a directive on this subject was also underlined in
the European Parliament's Opinion on the Commission's Green Paper[39].
The Parliament, in fact, requested the Commission to present,
without delay, a proposal for a Directive.
2. Studies in the different Member States show that problems concerning
the quality of goods and the operation of guarantees and after-sales
services are the main source of consumer complaints in connection
with the purchase of goods. [40]
The situation is similar in the case of cross-border transactions.
The information provided to the Commission, notably by the European
consumer infocentres operating in certain border regions, shows
that the bulk of consumer complaints relating to the purchase
of movables concern the legal and commercial guarantees. An analysis
of the latest 100 cases reported to the Commission by one of the
European infocentres concerning disputes associated with the cross-border
purchase of goods (France, Luxembourg, Belgium, Germany) shows
that approximately 70 per cent of complaints relate to this domain.
It goes without saying that in the case of cross-border transactions,
the consumer's plight is aggravated because of the nature of the
dispute: the problem of the applicable law, divergences between
national laws, problems of invoking the commercial guarantee,
etc.
3. Against this backdrop, it is not surprising that European consumers
are still quite reluctant to shop abroad, although in theory European
citizens consider the freedom to buy products and services abroad
to be one of the main attractions of the single market. According
to a Eurobarometer survey conducted in 1993,
[41] 52
per cent of consumers mentioned the difficulties they encountered
in exchanging goods or having repairs done to products purchased
abroad as the main barrier to cross-border purchases. The percentage
of consumers who mentioned this barrier is far higher in some
countries than in others (68 per cent in Denmark, 63 per cent
in the Netherlands and 61 per cent in Germany for example). The
language barrier is mentioned by 40 per cent of consumers and,
in third place, the difficulty of settling disputes, mentioned
by 34 per cent of consumers. Interestingly, the fourth barrier
mentioned is uncertainty with regard to the terms of sale: the
percentage of consumers who mention this barrier rose from 24
per cent in 1991 to 31 per cent in 1993.
4. In its general conclusions concerning the Green Paper adopted
on 17 May 1994, the Council reaffirmed its conviction that the
benefits of the internal market should accrue to all consumers;
that consumers must be encouraged to play a more active role inthe
operation of this market; that measures of this kind are essential
if Europe is to be brought closer to the European citizen.
Already in its second three-year action plan on consumer policy
(1993-1995), [42]
the Commission emphasised that "transfrontier shopping can
only flourish if the consumer is assured that he can enjoy the
same after-sales and guarantee terms no matter where the supplier
is domiciled" and that, if the internal market is to work
properly, it is necessary to guarantee consumers that, independently
of the country of purchase of a good within the single market,
they will always be able to benefit from an effective after-sales
service and to challenge possible defects in the goods purchased.
[43]
This proposal for a Directive follows from the above and aspires
to provide European consumers with a minimum common corpus of
rights throughout the European Union. This can only be done by
approximating national legislation governing the legal guarantee.
In all Member States the legal guarantee is the bedrock of consumer
rights as regards the quality and conformity of the goods purchased.
Commercial guarantees are add-ons to these basic rights, but generally
they cannot waive them. Hence the legal guarantee is the foundation
for the development and operation of the commercial guarantees.
The notion of the "legal guarantee" includes all legal
protection of the purchaser in respect of defects in the goods
acquired, resulting directly from the law, as a collateral effect
of the contract of sale. The key feature of the legal guarantee
is that it is designed to protect purchasers' confidence in the
context of the contract of sale - their legitimate expectations
concerning the product purchased - and that it operates independently
of the will of the contracting parties, its effects being binding
in law. On the other hand, the notion of "commercial guarantee"
expresses the will of one person, the guarantor, who assumes personal
liability for certain defects which may be present in the goods
sold. These guarantees take the form of a written promise accompanying
the product or delivered at the time of purchase, pursuant to
which the guarantor undertakes to repair or replace the product
if a defect emerges within a certain time.
Divergences in national legal guarantee regimes concern both how
defects are defined and the rights accorded to consumers and how
they can exercise them. Divergences are most striking notably
as regards the legal guarantee period, which ranges from an indeterminate
period (F, B, L, NL, FIN) to a short period of six months (D,
E, , G, A) and, in mid-field, the period of six years (UK, IRL),
two years (S) and one year (DK, I).
Again, many of the national laws hark back to a time when manufacturing
and marketing conditions were very different from what they are
today. Traditional civil law rules governing the contract of sale
were based on the paradigm of two equal citizens concluding a
contract for the transfer of title from one to the other. Hence
they are ill adapted to current manufacturing and marketing realities.
For example, the traditional effects of the legal guarantee - the
right to rescind the contract and to secure a reduction in price - are
both overly rigid and inadequate , and so they may suit neither
the consumer nor the seller. And we should remember that the traditional
remedies associated with the commercial guarantee - replacement
or repair of the good - are a statutory requirement only in half
the Member States and even then only in certain strictly defined
circumstances.
5. Member States also seem to be aware of the need to overhaul
domestic law. This trend may be observed in several Member States.
Let us mention some of the more recent initiatives: the United
Kingdom has just amended its general legislation on the sale of
goods with an eye to protecting buyers against minor defects and
shortcomings in product durability. Greece has just promulgated
a new Consumer Protection Act which contains landmark provisions
concerning after-sales services: suppliers are now obliged to
provide operating instructions with their products and to inform
the consumer of the product's normal lifespan, during which period
repair and maintenance services must be made available to consumers.
Finland has also reformed its consumer protection law, mainly
with an eye to establishing joint and several liability of the
manufacturer and seller in the context of the legal guarantee.
Germany has not yet got around to reforming its rules but an expert
committee which has long been working on a plan to reform the
law pertaining to contractual obligations has stated clearly that
the existing provisions are obsolete. Notably it has proposed
that the legal guarantee be extended to three years as opposed
to six months at present. And Austria is already discussing a
bill to amend the existing legal guarantee regime, notably with
a view to establishing a three-year legal guarantee. In Sweden,
the two-year legal guarantee currently in force is felt to be
inadequate and a bill currently under debate provides for a mandatory
five-year guarantee period. It is likely that other Member States
will also take initiatives in a domain which is so crucial to
the protection of consumers in the context of purchasing goods.
This proposal for a Directive will also contribute to simplifying
existing national rules, by approximating them to the law in force
on the international sale of goods between professionals (Vienna
Convention of 1980) and by reducing distortions to competition
which may result from divergences in national legislation. The
proposal for a Directive also takes into consideration the European
Parliament's endeavours to encourage approximation of the private
law of the Member States at Community level.
[44]
6. An analysis of consumer complaints and commercial practices
shows that minimum harmonisation of the legal guarantee must be
accompanied by certain framework rules governing commercial guarantees.
Very often the way commercial guarantees are drafted leads to
their being confused with the legal guarantee, with the result
that consumers may be misled as to their rights. And far too often
commercial guarantees are less than candid as to their scope and
content, or lay down unconscionable terms as to the circumstances
in which the guarantee may be relied on - hence effectively negativing
the very rights they seemingly grant.
7. In this Explanatory Memorandum, the terms "legal guarantee"
and "commercial guarantee" are used for reasons of clarity.
However in the text of the proposal for a Directive the terminology
is somewhat different, so as to avoid difficulties as regards
certain legal traditions to which the concept of the "legal
guarantee" is foreign. Hence the term "guarantee"
will be reserved for commercial guarantees only, and indeed this
is generally what the consumer understands by the term. Thus the
first four Articles (approximation of sales law) concern the "legal
guarantee", although the term is not mentioned, while Article
5 concerns the "commercial guarantee", which is simply
referred to as the "guarantee".
B. Essential aspects of the proposal
The proposal for a Directive has two strands. The first part - the
main section - addresses the legal guarantee, while the second part
concerns the commercial guarantee.
As regards the legal guarantee, the text of this proposal for
a Directive is very precise: its purpose is to regulate aspects
which are strictly linked to the protection of consumers when
they buy goods which are not in conformity with the contract.
In no way does it attempt to completely harmonise sales law. For
this reason, all questions concerning the formation of the contract
between the parties, defects in the contract, the effects of the
contract, including those linked to performance or non-performance
of the contract, or forms of imperfect performance other than
non-conformity of the product with the contract, are not addressed
by the text and remain entirely and completely subject to national
law.
Moreover, the proposal merely specifies that the guarantor must
resolve the problem, i.e., through refund or price reduction,
replacement or repair of the product. The proposal for a Directive
in no way regulates liability for possible direct or indirect
damage caused by the lack of conformity.
If it provides the consumer with a minimum corpus of legal rights
throughout the European Union, the text also tries to maintain
a certain balance between the obligations of the various parties.
Hence it lays down obligations which consumers must fulfil on
pain of forfeiting their rights.
The second aspect of the proposal for a Directive concerns the
commercial guarantee, but it does not endeavour to regulate it
in its entirely. It merely lays down certain principles concerning
transparency and the relationship with the legal guarantee as
well as certain rules designed to furnish a legal framework for
commercial guarantees. Any additional features are a matter for
commercial policy where competition is of the essence and fall
within the competence of the firm. Hence there is no obligation
to provide commercial guarantees in the first place, although
certain countries have already adopted this approach. The content
of the guarantees, the guarantee period and the procedures for
invoking the guarantees are also left to the offerers' discretion.
For reasons linked to application of the subsidiarity principle,
after-sales services as such, i.e., services relating to the use,
maintenance and repair of goods, independently of the implementation
of any legal or commercial guarantee, are not covered by this
proposal for a Directive. This is a complex domain which is more
adequately addressed, at Community level, through voluntary instruments
(for example codes of conduct for individual sectors), than in
the form of statutory rules.
C. Consistency with other Community policies
Since consumers and economic operators need to know for certain
that they can fully and fairly benefit from the single market,
the Council has made a point of stressing its determination to
ensure that the single market must work effectively for the good
for all Community citizens by assuring respect for the four freedoms,
hence offering consumers a greater choice of quality goods and
services and improving the competitiveness of Community firms.
[45] These
declarations by the Council highlight the interaction between
the policy concerning the creation and operation of the single
market and the other Community policies and, in general, all the
objectives of the European Union.
The role of improving consumer protection in this context has
already been stressed by the Commission. On the one hand the single
market was not created for business alone and cannot function
properly without active and genuine consumer participation. Another
point is that informed consumers can, by shopping wisely, accelerate
the positive economic effects of an integrated market.
[46]
The Commission considers that this proposal dovetails perfectly
with the goals of all Community policies, particularly those concerning
quality and competition policy.
34
Council Resolution of 14 April 1975, OJ No. C 92, 25 April 1975,
p. 1.
Back
35
Initial proposal - see OJ No. C 243, 28 September 1990, p. 2; amended
proposal-see OJ No. C 73, 24 March 1992, p. 7.
Back
36
Statement in the Council minutes in connection with the adoption
of the Directive on unfair terms in consumer contracts of 5 April
1993.
Back
37
As the Council had also requested in its Resolution of 13 July
1992 on future priorities for the development of consumer protection
policy, OJ No. C 186, 23 September 1992, p. 1.
Back
38
COM(93) 509 of 15 November 1993.
Back
39
Resolution of 6 May 1994, OJ No. C 205, 25 July 1994, p. 562.
Back
40
For example, the statistics published by the Office of Fair Trading
on consumer complaints reported to the national authorities in
the United Kingdom. These quarterly statistics are published in
the review Fair Trading and highlight the preponderance of problems
relating to defective goods and the difficulties of getting them
repaired in complaints concerning such goods. A calculation based
on complaints received during the second quarter of 1994 (Fair
Trading No. 9, Winter 1994^95) gives the following percentages
for different types of goods: furniture (not upholstered) 60.6
per cent upholstered furniture 75.6 per cent radio, TV, other
electrical goods and hire 66.4 per cent, major appliances 72.2
per cent, clothing 61.3 per cent, footwear 81.1 per cent, toilet
articles, perfumery, hairdressing 39.9 per cent, jewellery, silverware,
clocks and watches 66.6 per cent, new motor cars, 59.5 per cent,
secondhand cars 61.9 per cent.
Back
41
Eurobarometer No. 39, September 1993. Back
42
COM(93) 378 final of 28 July 1993.
Back
43
COM(93) 509 final of 15 November 1993.
Back
44
Resolutions of 26 May 1989 and 6 May 1994, OJ No. C 158, 26 June
1989, p. 400 and OJ No. C 205, 25 July 1994, p. 518 respectively.
Back
45
In this context it should be remembered that the Court of Justice
has ruled that the free movement of goods also implies that "(
. . . ) consumers resident in one Member State may travel freely
to the territory of another Member State to shop under the same
conditions as the local population." GB-INNO-BM judgment
of 7 March 1990, Case C 362/88, ECR 1990, p. 667, grounds 8. Back
46
"Making the most of the single market: strategic programme",
COM(93) 632 of 22 December 1993. In this document, the Commission
already pointed out that it considered legal and commercial guarantees
a priority area for legislative measures at Community level, with
a view to making the Union a genuine single market from the consumer's
perspective. Back
