Remedies for buyers in B2C contracts: General aspects Brussels 19 June 2012 Prof. Dr. Hans Schulte-Nölke European Legal Studies Institute Osnabrück

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück CESL (= Annex I) – Overview Part I:Introductory provisions … Part II: Making a binding contract … Part III: Assessing what is in the contract …

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück CESL – Overview (2) Part IV: Obligations and remedies of the parties to a sales contract or a contract fort he supply of digital content Ch. 9: General provisions Ch. 10: The sellers obligations Ch. 11: The buyers remedies Ch. 12: The buyers obligations Ch. 13: The sellers remedies Ch. 14: Passing of risk Part V: Obligations and remedies of the parties to a service contract Ch. 15: Obligations and remedies of the parties

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück CESL – Overview (3) Part VI: Damages and interest Ch. 16: Damages and interest Part VII: Restitution Ch. 17: Restitution Part VIII: Prescription Ch. 18: Prescription Appendix 1: Model instructions on withdrawal Appendix 2: Model withdrawal form

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Integrated System of Consumer Law in CESL (Annex I) General contract law, e.g. applicable to any buyer (non-mandatory) Specific consumer protection rules (mandatory), e.g. – Presumption that lack of conformity already existed when risk passed (Art. 105 (2) CESL) – Interest when debtor is a consumer (Art. 167 CESL) General default rules made mandatory for consumer contracts, e.g. – Remedies for breach of information duties (Art. 29 (4) CESL) – Buyers remedies for lack of conformity (Art. 108 CESL) – Restitution (Art. 177 CESL) – Prescription (Art. 186)

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Level of Consumer Protection: Generally Very High CESLD. 44/1999/CISG/MS Money back in case of (not insignificant) lack of conformity, i.e no right to cure of trader Yes (except services) No (hierarchy) Payment for use in case of termination for lack of conformity Usually noUsually yes [CISG ?] Prescription/preclusion10 (2) yearsMost 2 years [CISG -] Buyers knowledge of lack of conformity harmsNoYes Strict liability for damagesYes[DE: No] CISG: yes

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Consumer Protection Level – Benchmarks Consumer Rights Directive => same (e.g. pre-contract infomation, right to withdraw) Minimum Directives => same or higher (e.g. D. 1999/44, 93/13) National Laws => same or higher – only very few exceptions with regard to individual MS

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Proposals for improvement Overly extensive right to terminate in B2C Wrong exclusion of repair or replacement in case of excuse Remedies for digital content not supplied in exchange for a price, but for another counter-performance

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Overly extensive right to terminate Sales contract: Consumers remedies not subject to cure by seller, Art. 106 (3) (a), including: – Goods to be manufactured or produced, Art. 2 (k) Reg. – Goods or digital content made to consumers specification (cf. Art. 40 (2) (d) CESL) – Unsealed audio/video recordings and software (cf. Art. 40 (3) (c) CESL) – Digital content not supplied on a tangible medium (cf. Art. 40 (3) (d) CESL) – Digital content in general Services contract: Consumers remedies subject to cure by service provider, Art. 155 (3)

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Recommendation: Amend letter (a) in art. 106(3) CESL (added part underlined): If the buyer is a consumer: (a) the buyers rights are not subject to cure by the seller, except where they relate - to goods which are made to the consumers specifications or are clearly personalised, or - to digital content; and

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Wrong exclusion of repair or replacement in case of excuse Art. 106 (4) CESL should read (deletion faded): If the sellers non-performance is excused, the buyer may resort to any of the remedies referred to in Paragraph 1 except requiring performance and damages. Art. 131(2) CESL relating to the remedies of the seller needs to be amended accordingly.

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Remedies for digital content not supplied in exchange for a price, but for another counter-performance Art. 107 CESL should be amended (amended part underlined): Limitation of remedies for digital content supplied for free Where digital content is supplied for free*, the buyer may not resort to the remedies referred to in points (a) to (d) of Article 106(1). The buyer may only claim damages under point (e) of Article 106 (1) for loss or damage caused to the buyer's property, including hardware, software and data, by the lack of conformity of the supplied digital content, except for any gain of which the buyer has been deprived by that damage. * Instead of: … is not supplied in exchange for the payment of a price…

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Sale under EU Law Perspective: The Blue Button as a quality brand for an excellent consumer protection standard of CESL = pre-fabricated legal guarantee

Prof. Dr. Hans Schulte-Nölke, European Legal Studies Institute Osnabrück Prof. Dr. Hans Schulte-Nölke European Legal Studies Institute Osnabrück