Consumer sales and guarantees in europe

II. THE PROPOSAL FOR A DIRECTIVE ON CONSUMER RIGHTS

A. The proposal's objectives and the ways to achieve them

B. The Proposal's ability to reach its objectives

C. Alternative solutions

CONCLUSION

CONSUMER SALES AND GUARANTEES IN

EUROPE

Introduction

«The beauty of the Single Market is that by removing barriers we should not have to choose between business and consumer interests »¹. Made the 15 March 2010 by V. Reding during a speech in Madrid, this statement replaces consumer protection in the context of the internal market. Indeed, from the European Union's perspective, the balance to be stricken between consumer protection and business interests is assessed through its ability to strengthen the internal market. More importantly, the belief that this particular method eludes the traditional scheme opposing consumer protection one the one hand and economic interests on the other is at the core of the European Community's reasoning. This statement also shows that economic issues lay at the basis of the European Union's action on the field of consumer. This explains the content and the form of the European regulation as regard consumers.

Before going any further, the reasons why consumers are ought to be protected
should be recalled. When contracting with professional, consumers are deemed to be
in a weaker position than the other party. This is mostly due to their lack of

information and to the fact that in modern transactions, most contracts are contracts of adhesion which cannot be negotiated. Thus, rules generally aim at providing more information to consumers, at offering them a right of withdrawal from the contract or at giving them particular and more generous grounds on which they can base their claim.

This being in mind, it shall be precised that consumer contracts are amongst the most common contracts which take place on a daily basis. In other words, more than concerning everyone, consumer contracts are at the basis of consumers' consumption, which is to say one of the driving forces of our modern economy . As such, providing that a law efficiently protecting consumers can strengthen their confidence and thus induce them to consume, we understand why the European Union sees consumer law as a matter of economic significance. As such, sales contracts are one of the areas where consumer protection is of great significance.

In Europe, consumer sales are regulated both at the European level, in particular through the Directive of 1999 on certain aspect of the sale of consumer goods and associated guarantee², and at the national one by each Member States. However, this fragmented regulatory framework is criticised by the Commission as preventing business from providing goods and services in other Member States and as undermining consumers' market 3

confidence in the internal . This is why the

Commission published a Green Paper on the Review of the Consumer Acquis on
2006 which was followed on October 2008 by a Proposal for a Directive of the

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European Parliament and the Coun cil on Consumer Rights (the Proposal) . The
Proposal's most striking feature is the fact that it provides for a full harmonisation

Directive. As such, if it was adopted, Member States would not be allowed to maintain or introduce in their own legal system any law which would provide for a different level of protection, even more generous, as the one laid down in the Proposal.

The Proposal has been the object of many articles and attracted many critiques. This great interest can be explained by the fact that it provides for a system whereby Member States would lose a part of their sovereignty over the regulation of consumers. Even more, as it stands know, the Proposal threaten some existing rules already provided for by Member States such as the French syst em of latent defect and the UK's right of rejection. As consumer contract law goes at the heart of many legal systems, these consequences are regarded with circumspection and all details of the Proposal's content are closely analysed⁵.

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Even though the Pr oposal gathers existing Directives

four regulating a wide area of

consumers' contracts, the scope of this work is narrower as it only concerns sales contracts and, more precisely, consumers' rights when confronted to a faulty or nonconforming good. As this work will only concern consumers' legal protection, commercial guarantees are excluded from its scope. In addition, we will only focus on the French and the UK's legal framework as well as on the Proposal currently debated.

It will be seen that generally speaking, where the law generally misses its point is by
not acknowledging the fact that in practice, consumers are generally reluctant to
defend their rights in front of a judge. Indeed, to put it concretely, a consumer

confronted to a problem with the 40 euros coffee-maker he purchased will most

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certainly not be willing to go to courtas the time and the costs involved in such process do not worth the trouble of so doing⁸. Moreover, consumers are generally speaking largely unaware of their rights and, when some of them are known, they are often misunderstood⁹. Thus, it is here submitted that a good law protecting consumers should be clear enough to be understandable by lay people and should in the same time be usable by them without any judge's help. That would put them on an equal footing when contracting with professionals.

Accordingly, keeping in mind these practical concerns, the main question underlying this whole work is the following one: how good are the current and upcoming provisions protecting consumers in sales contracts?

As a matter of fact, the English approach of consumer protection is more practical

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and more in line with the considerations

above . Indeed, analyses of the concrete

obstacles standing on the way of consumers confronted to faulty goods have been undertaken¹¹ and it will be demonstrated that the English legal system appears to be more adapted to consumers. Conversely, the French system provides for highly technical rules which set a theoretically fair balance between buyers and sellers. It will be showed, however, that these provisions appear to be, to say the least, unwieldy for consumers [I]. Finally, the Proposal is also concerned with some of the weaknesses affecting national laws. However, its main shortcoming concerns the effects it has on these rules and the level of protection already granted to consumers by Member States [II].

I. The current regime in France and in the UK

As buyers are most of the time the weaker party when purchasing goods, Member States have long recognised that they are ought to be adequately protected against the stronger bargaining power of the professional seller they are contracting with. As such, all Member States have rules regulating buyer sales and guarantees, and sometimes rules regulating more precisely consumer sales and guarantees. However, as these rules were sometimes deemed to be too low in certain countries and to impede the development of the internal market, the EU decided to provide for a minimum set of protection that all Member States would have to reach, providing that they were however allowed to go further in the protection granted to consumers if they wished to¹². Thus, following the Green Paper on Guarantees for Consumer Goods and After-Sales Services published by the Commission in 1993¹³, the Directive on certain aspect of the sale of consumer goods and associate guarantees (the Directive) was launched in 1999¹⁴, all Member States being in charge of transposing it.

Amongst Member States, such transposition led to different difficulties, controversies and solutions depending on national traditions, cultures and legal systems. Consequently, measures of transposition varied greatly between Member States. Some chose the «great solution» («la grande solution¹⁵»), a full reform leading to a monist regime as regard the regulation of all sales contracts, as Germany for instance¹⁶. Conversely, some chose the «small solution» («la solution de transposition minimaliste¹⁷») leading to a dual regime, as France and the UK for instance. Indeed,

both in France and in the UK, the Directive was transposed by adding specific rules applicable to consumers in addition to those already existing for all buyers and which remained mostly unaffected.

Such way of transposing, though allowed and having the advantage to protect national legal systems, implies a pilling up of legislations which is questionable in terms of clarity and intelligibility. Indeed, in France for instance, consumers have the choice between the regulation coming from the Directive and the general law of contract. Such piling up of regulations leads to complexity, incoherence as regard notions which definition differs depending on the law and confusion as regard applicable regimes¹⁸. In addition, overlaps between national and European regulations, called «double-banking» ^19, are to be avoided for the sake of easy-understanding and easy -access to law which are primordial issues in the field of consumer protection.

This part is aimed at giving an overview of the rules currently regulating consumers throughout France and the UK. More precisely, national rules and European rules (the Directive) will be differentiated. As regard national rules, it will be demonstrated that both legal systems have different views on the ways consumers are best protected. Indeed, whereas civil law countries' rules are drafted to ensure that parties perform their obligation as agreed, common law countries focus instead on the termination of the contract if it is not been honoured as specified²⁰ . Both in its content and method, the efficiency of the UK's method as regard the French one will be demonstrated.

As regard the Directive, it is important to note straight away that a Proposal for a reform of the rules regulating consumers, including consumer sales and guarantees, has been launched in 2008 21 . The content of the Proposal is not strictly speaking so different from the content of the 1999 Directive which content will be further analyzed from a more critical perspective (II. The Proposal for a Directive on consumer rights ). As a result, we will only give an overview of the rules laid down in the Directive (A) before detailing the national rules applicable both in France (B) and in the UK (C).

A. The Directive of 1999 on certain aspect of the sale of consumer goods and associated guarantees

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After 15 years of discussions and debates , the Directive of 1999 was finally adopted with the objective to provide for a high degree of consumer protection in Europe and to promote the internal market, as stated right at the beginning of the text²³. To fulfill its objective, the Directive draws upon different sources, most importantly the United Nations Convention on Contracts for the International Sale of Goods²⁴ and, subsidiary, the British legal system and some principles of civil law 25 .

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The Directive only provides for harmonisation

minimum . Minimum harmonisation

means that Member States must follow the Directive's provisions as a minimum set of protection for consumers but are allowed to maintain or to create rules which provide for a better protection²⁷. As a consequence, there are divergences between the provisions stated in the Directive and the rules implemented by Member States

when transposing it. Thus, as the Directive has not been transposed exactly as it

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stands by Membe r States which all provided for some modifications , this part only aims at describing the main features of the Directive's rules. A more critical assessment of the rules it lays down will be carried out when detailing the measures of transposition in France and in the UK.

The Directive does not regulate all aspects of consumer sales and guarantees. As an
example, no rules about damages are provided for by the Directive and this matter is

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thus to be ruled by Member States national laws . As a matter of fact, the two most important parts of the Directive are the provisions concerning the non-conformity (1) and the remedies available for consumers (2).

1. Non-conformity

The Directive provides that all goods have to be in conformity with the contract of sale³⁰. More precisely, the Directive provides that goods are deemed to be conforming if they comply with four criterions listed in article 2(2) of the Directive. These criterions are cumulative and consumers only have to prove that one of them is not fulfilled to prove non-conformity. Thus, goods must 31:

· Comply with the descriptions given by the seller and, if applicable, comply with the sample or model presented;

· Correspond to the normal use usually made for this kind of goods;

· Correspond to the particular use the consumer intends to make with the goods as long as such particular use was known by the seller; and

· Be of normal quality and perform as expected for this kind of goods, taking into account their nature and any public statements about them made by the seller or the producer, in particular in advertising and labeling.

Here, it must be noted that the Directive's notion of non-conformity does not encompass the situation where the good is delivered in wrong quantity. In such cases, the remedies applicable would be those of the Member States themselves³².

In certain cases, the good does not have to comply with the public statement referred to in the last condition if the seller can prove that³³:

· He was not aware and could not reasonably be aware of the public statement;

· The statement had been corrected prior to the sell; and

· The consumer's decision could not have been influenced by the statement.

In addition, if the consumer «was aware, or could not reasonably be unaware» of the lack of conformity or if such lack of conformity is due to the materials provided by the consumer, then the good is not deemed to be non-conforming³⁴.

Moreover, it must be proved that non-conformity existed prior to the sale of the good³⁵. However, such proof can be very difficult to provide, especially when dealing with complex goods such as laptops or cars. Thus, except if they resort to an expert, either consumers or sellers will have trouble to prove that a particular breakdown is due to a misuse from the consumer or from a defect which already existed before the sale. Therefore, albeit balancing consumers and sellers' interests is a matter of the

finest alchemy, as regard the issue of proof it can be said that the Directive successfully takes over this challenge. Indeed, during the first sixth months following the delivery of the goods all problems affecting them are deemed to result from a defect which already existed moment of the purchase 36

the

at . Even though the seller

can still prove the contrary, in particular if such presumption is not compatible with the nature of the good (a lettuce for instance) or the lack of conformity (the good's defect obviously flows from a misuse by the consumer)³⁷, this provision will most of the time allows the consumer to claim for a remedy without any contest. Conversely, after the first sixth months, the consumer has the burden to prove that the good was non-conforming prior to its purchase.

In addition, it is important to note that sellers are liable for the non-conformity of the goods they two the delivery 38

sell only during a period of after

years ir . Moreover, the

Directive provides that consumers must inform the sellers of any lack of conformity

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within a period of two months following the revealing of such lack of conformity . As it will be highlighted later, these limitations are rather harsh and have, in fact, seldom been transposed by Member States.

As soon as non-conformity is established, consumers are entitled to remedies.