E C Directive 1999/44/EC
Belgrade, Serbia
29-30 March 2011
drd. Mircea POPA
“Consumer markets are evolving rapidly. “
“Products, services and sales channels are becoming increasingly
sophisticated and consumers have to make ever more complex choices
resulting in enhanced risk of detriment. “
“We need to make sure good law does not remain a dead letter. We intend to
focus on the real impact in terms of consumer welfare and confidence in a
better functioning internal market.”
“We need to continue working towards a set of common and clear rules that
provide legal certainty. These rules need to take into account the balance
between protecting the rights of consumers without adding an excessive
regulatory burden on businesses. “
“Businesses indeed have an interest and responsibility in complying.
Compliance may be perceived as burdensome. I believe it should be seen as
an investment in both securing consumer confidence and in building a solid
reputation and a loyal customer base for the business. “
“John Dalli - Member of the European Commission, responsible for Health and
Consumer Policy Enforcement of Consumer Rights European Economic and
Social Committee, European Consumer Day - Madrid , Spain, 15 March 2010
Legal problems:
Written law – inconsistencies, lack of clarity, lack of experience;
Institutions enforcing it – public administration, courts;
Legal culture!
Economic and social problems:
Markets in transition – lack of resources, lack of awareness, need
for fair competition;
Birth of civic society and self-regulation (business self-control,
consumer movement, associations and organisations);
Legal culture again!
Incomplete law, inefficient enforcement, lack of knowledge of what
is legitimate and what is not – both on the business and
E C Directive 1999/44/EC
 EC Directive 1999/44/EC on certain
aspects of the Sale of Consumer
Goods & associated Guarantees
Intended effective date:
 1 January 2002
E C Directive 1999/44/EC
 To harmonise consumer protection law
across the EU
 To provide a minimum standard of
legal protection - in some instances
lower standards than already exist in
the national legislation
E C Directive 1999/44/EC
 A uniform protection system
encourages confidence in cross border
 Internet shopping is transnational
The scope of application
Business to consumer sale
 The definition of consumer
 Definitions of seller and producer
 Sale of consumer goods
 Definition of goods: tangible, movable items
 Exceptions:
- Goods sold by authority of law;
- Water/gas where not put up for sale in a
limited volume or set quantity;
- Electricity
CONSUMER: shall mean any natural person who, in the contracts
covered by this Directive, is acting for purposes which are not related
to his trade, business or profession
SELLER/RESELER: shall mean any natural or legal person who,
under a contract, sells consumer goods in the course of his trade,
business or profession
PRODUCER: shall mean the manufacturer of consumer goods, the
importer of consumer goods into the territory of the Community or
any person purporting to be a producer by placing his name, trade
mark or other distinctive sign on the consumer goods
Guarantee: shall mean any undertaking by a seller or producer to
the consumer, given without extra charge, to reimburse the price
paid or to replace, repair or handle consumer goods in any way if
they do not meet the specifications set out in the guarantee
statement or in the relevant advertising;
Repair: shall mean, in the event of lack of conformity, bringing
consumer goods into conformity with the contract of sale
E C Directive 1999/44/EC
Key Features I:
 Applies to all MOVEABLE CONSUMER
GOODS (exception water, gas,
electricity and goods sold at auction,
goods bought by HP)
E C Directive 1999/44/EC
Key Features II:
 Applicable to new AND second-hand
 Applicable only when sold by business
to individual consumers
 Introduces a minimum 2 YEAR claim
period from DATE OF DELIVERY of
E C Directive 1999/44/EC
2 Year Liability and Limitation Period I:
 Basic premise is that goods must
conform with contract of sale
 Seller liable for any lack of conformity
which exists at the time of delivery
and which becomes apparent within 2
years of the date of delivery
E C Directive 1999/44/EC
2 Year Liability and Limitation Period II:
– Consumer was aware of the defect at the
time of sale
– Consumer could not reasonably be
unaware of the defect at the time of sale
E C Directive 1999/44/EC
Criteria for Conformity I:
 Comply with a description given by the
seller and possess quality of the goods
that seller has held out as sample
E C Directive 1999/44/EC
Criteria for Conformity II:
 Fit for the purposes for which goods of
the same type are normally used
 Fit for any particular purposes which
the consumer has made known to the
seller AND the seller has accepted
E C Directive 1999/44/EC
Criteria for Conformity III:
 Show the quality and performance
normal in goods of this type - vis a vis
– The nature of the goods
– Taking into account public statements/
advertising/labelling re specific
characteristics of the goods made about
them by the seller, the manufacturer or
his representative
E C Directive 1999/44/EC
Criteria for Conformity IIII:
 NOTE - The seller is not liable for goods not
conforming to the manufacturers’ statements if he
can show that:
– He was not aware of the statement
– He had corrected the statement
– He can show that the consumer’s decision to buy
was not influenced by the statement
E C Directive 1999/44/EC
Wear and Tear I:
 NOTE - goods only need to “Show the
quality and performance normal in
goods of the same type and which the
consumer can reasonably expect,
given the nature of the goods”
E C Directive 1999/44/EC
Wear and Tear II:
 Seller is only liable for faults that were
there at delivery, and not for wear and
tear. The liability period is not a
durability requirement
E C Directive 1999/44/EC
 If installation forms part of the
contract of sale, incorrect installation
by or on behalf of the seller is deemed
to be equivalent to a lack of
conformity of the goods. This also
applies if the product is incorrectly
installed by the consumer due to
shortcomings in the installation
E C Directive 1999/44/EC
Key Features III:
 Reversed burden of proof - any lack of
conformity (defect) which becomes
apparent within the first 6 months of
delivery is presumed to have existed at the
time of delivery
– Proved otherwise
– Presumption is incompatible with the
nature of the goods or the lack of
E C Directive 1999/44/EC
Key Features IV:
Hierarchy of Remedies :
– In the event of any lack of conformity, the consumer is
entitled to free repair or replacement whichever is the
most economical and practical, within a reasonable time
and without any significant inconvenience
– If a repair or replacement is not possible or practical, or
the seller has not completed a remedy within a reasonable
time or has caused significant inconvenience, the
consumer is entitled to a price reduction or refund
Key rules
If the goods were defective at the time of delivery
the consumer may ask the seller for:
- Repair or replacement of goods
If these remedies were not completed within
reasonable time and without significant
inconvenience then the consumer may ask for:
- Reduction of price or termination of the contract
 The seller is liable where the lack of conformity
becomes apparent within two years as from
delivery of the goods.
 During the first six months from the time of delivery
reversal of burden
Key rules – part II
Rules on (commercial) guarantees:
 The definition of guarantee
 A guarantee (commercial) is binding upon
 Requirements of transparency
 Right of redress
 The seller can claim a remedy against any
party responsible in the chain (B2B relation)
within limits of national law.
E C Directive 1999/44/EC
Comparison of Remedies under Existing
 Existing Law:
– Very short time to reject and claim refund
– Damages (typically equivalent to a
– Repair or replacement
– Price reduction or refund
E C Directive 1999/44/EC
Limitation Periods:
 Current position in other MS legislation
for breach of contract; 6 years from
date of breach
 Directive; 2 years from delivery
 other MS - no desire to derogate from
existing regime
E C Directive 1999/44/EC
Second Hand Goods:
 Member States have discretion to
reduce the claim period to minimum 1
Is not necessary to accept limitation in
the consumers detriment
E C Directive 1999/44/EC
Commercial Warranties:
 Voluntarily given without extra charge
 Will be legally binding
 Query: are they already binding in the
 Must comply with Directive criteria
E C Directive 1999/44/EC
Mandatory requirements of
commercial warranties I:
Legally binding on offeror under
conditions set out in guarantee
State that statutory rights not affected
by guarantee
plain intelligible language
E C Directive 1999/44/EC
Mandatory requirements of
commercial warranties I:
essential particulars
how to make a claim
duration of guarantee
territorial scope
name and address of guarantor
E C Directive 1999/44/EC
Choice of law:
 There are complex and unpredictable
rules which deal with assigning law to
a given contract when the contract
itself is silent
 The directive raises difficult questions
about the conflict between European
state laws
E C Directive 1999/44/EC
Choice of law II:
There is no homogeneous worldwide system
of contract law
Common law is different to European Civil
law; precedent as opposed to Code
English law mirrored in the U.S and
commonwealth states
The faintly ambiguous language of civil law
is anathema to common lawyers
Requirements of proper
Minimum harmonization clause: MS may maintain more
stringent provisions as long as these are compatible with the
Legislative options within the Directive:
Exempting second-hand goods sold at public auctions where
consumers have the opportunity of attending in person
Providing that the consumer must inform the seller of the lack
of conformity within a period of two months from the moment
he detected the lack of conformity
Providing for a language requirement of the (commercial)
Providing shorter time period for the liability of the seller in
case of second–hand goods (minimum one year).
Requirements of proper
The importance of the consistent use
of terminology (e.g. consumer, seller).
The need to achieve coherence
between implementing measures and
existing contract law.
E C Directive 1999/44/EC
Seller’s Rights of Redress:
 Ostensibly the Directive is only
concerned with consumer rights
however it provides that seller can
pursue remedies back to its own supply
 Query; what law will apply and will it be
excludable ?
E C Directive 1999/44/EC
Areas for action:
 The form, content and presentation of
all commercial guarantees
 Review of advertising material
 Review all self-assembly / installation
 Business to Business purchase and
supply contracts
E C Directive 1999/44/EC
Areas for action II:
 Assess exposure to foreign laws and
 Train sales and after sales teams
 Withdraw out of date literature from
resellers as far as possible
 Consider using the web as the primary
source for current product data
E C Directive 1999/44/EC
Areas for action III:
 Consider the practicality of segregating
“consumer” and “non-consumer” sales
 Consider systems of recording sales dates
for consumer products to identify:
The end of the 6 month period
The end of the 2 year period (or as may be)
The Directive in context
The following may apply as well:
Rules on selling methods:
Door to Door Selling Directive
Distance Selling Directive (97/7/EEC)
Rules on terms of contract:
Directive on Unfair Contract Terms
Thank you!