On October 8th, the European Commission published its latest proposed consumer rights directive, the primary purpose of which is to harmonise consumer rights legislation across the EU. Essentially the proposed directive consolidates and updates the following existing pieces of legislation:
- Sale of Consumer Goods and Guarantees Directive (99/44/EC)
- Unfair Contract Terms Directive (93/14/EC)
- Door Step Selling Directive (85/577/EC)
- Distance Selling Directive (97/7/EC)
An important aspect to note from the outset is that the proposal is to have 'full harmonisation' across the EU which means that, except where it is specifically stated, individual Member States are not permitted to introduce more or less stringent levels of protection for consumers. This is in line with the Commission's aim of ensuring that, where possible, the same levels of protection are afforded to all consumers across the EU, regardless of the contracting jurisdiction.
Although this article's primary aim is to address the likely implications of the proposed directive from an e-commerce perspective, equally the proposals are applicable to all contracts for the sale of goods or services from businesses to consumers regardless of the method of contracting.
1. Provision of Information
Distance sellers are required to provide a host of information relating to the product prior to the contract being concluded with the consumer, such as total price inclusive of all taxes, any applicable delivery charges, existence of guarantees and availability of an after sales service. Further, where the contracting medium has limited space to show all of the required information (i.e. the screen of a mobile phone) the information must be provided to the consumer by some other means, e.g. by providing a link to a website with these details.
2. Cooling-off Period
It is also proposed that the time during which a consumer is entitled to withdraw from a contract should be doubled from 7 to 14 days. However, there is an exception in the case of contracts which arise as a result of an auction, lottery or gaming contract, where no such right to withdraw will exist.
It is also proposed that an obligation is placed upon traders that they must deliver goods to the consumer within 30 days of the date on which the contract was made.
3. Unfair Contract Terms
Of particular interest is the provision of a list of contract terms which will always be considered or presumed to be unfair. This signifies a marked change from the existing unfair contract terms legislation which simply provides a list of indicative terms which may be considered to be unfair.
An example of such an unfair clause would be where, for example, where a contract appears to attempt to exclude or limit the legal rights of a consumer in the event of non-performance or inadequate performance by the business.
In light of this, as far as businesses are concerned, developments such as this in relation to limitation of liability should make them review and consider their current terms and conditions for consumer contracts, particularly in relation to limitation of liability as, ultimately, this could potentially lead to limitation of liability clauses being held to be invalid by the courts should any dispute occur.
In order for the directive to become law, approval must first be obtained from both the European Parliament and European Council. Should it overcome these hurdles and the proposed directive becomes law, benefits should be felt by both businesses and consumers who, at the moment, are often confused by the 'patchwork' of differing laws across the EU in relation to consumer rights legislation.
A further update on the progress of this proposed directive will be provided in future bulletins when the views of the European Parliament and European Council have been obtained.