Harmonisation in the EU
Whereas the old consumer protection directive from 1999 only organised a minimum level of harmonisation in the European Union, the new directives fully harmonise the European consumer protection. The aim of this harmonisation is to provide one single set of rules in the EU market, in order to make it easier for sellers of consumer products to offer their products in all the member states.
The Directive Digital Content and the Directive Sale of Goods do not harmonise all aspects of consumer contracts, though. For example, the formation, validity, termination, nullity and effect of contracts are not covered by the directives and therefore defer in each member state.
Implementation in the Dutch Civil Code
Because of their close connection, the Directive Sale of Goods and the Directive Digital Content have been implemented in one act: the Implementation Act Directives Sale on Goods and Digital Content.
Sale of goods
The Directive Sale of Goods has been implemented in paragraph 7.1 of the Dutch Civil Code ("DCC"). This legislation applies to consumer sales: contracts in which a physical product is bought by the consumer, for which the consumer pays a purchase price to the seller. Following the new directives, this paragraph also applies to products with digital elements. Those are physical products on which digital content is delivered to such an extent that without the digital services the product becomes useless, such as a computer or a games console.
The products that are offered to the consumers need to conform with the sales contract. Under the new legislation, this aspect has been further specified into subjective and objective requirements.
Subjective conformity has been implemented in article 7:18 (1) DCC and stipulates that the products must be suitable for any particular use that the consumer intends and that is accepted by the consumer. Moreover, under the subjective conformity, the seller must provide an instruction manual with the goods and ensure the goods get proper updates, if that can be reasonably expected.
Objective conformity has been implemented in article 7:18 (2) DCC and stipulates that the goods should also have the characteristics necessary for normal use. In order to establish what falls under 'normal use' of the goods, the functionality of similar products, potential technical standards and specific codes of conducts may be relevant. If the product would not be suitable for normal use, the product will not conform with the sales contract, unless before entering into the contract, the seller explicitly pointed out the aspects on which the product did not meet the standards and the consumer explicitly and separately accepted these defaults.
On the point of objective conformity, the new legislation is stricter for the seller. Before, the consumer could not hold that the product was defective, if at the time of entering into the contract the consumer was aware of the default. Under the new legislation the seller would have to inform the consumer about the default, which default has to be explicitly and separately accepted by the consumer. Paragraph (36) of the Directive Sale on Goods elaborates that the consumer has to accept the default in a statement, separate from any other statement or contract. In that respect, including the consumer's consent in standard terms and conditions of the seller would most likely not be enough under the new legislation.
Longer evidentiary presumption
Another thing that changed with the Directive Sale of Goods is the evidentiary presumption for defaults. As a general rule, the consumer has to proof that the product already was defective on the moment that the product was (physically) offered to the consumer. Under the old legislation, if the defect arose within 6 months after the consumer obtained the product, there would be de evidentiary presumption that the product would have been defective as of the moment on which it was handed over to the consumer. Under the new legislation, this period has been extended to 1 year.
The Directive Sale on Goods also provided new rules on commercial warrantees. Article 7:6a DCC stipulates that the warranty should be presented on a data carrier that enables the consumer to store the warranty for a longer period (such as paper or email). The warranty should include information as for example which specific rights the consumer is entitled to under the warranty, which procedure the consumer has to follow in order to exercise those rights and which conditions apply.
Moreover, article 7:6a (6) DCC makes clear that also expressions on the products made by the seller in advertising will fall under the scope of the warranty, unless the expressions in the advertising have been corrected and (re)published before the contract with the consumer was concluded.
Digital content has been implemented in paragraph 7.1aa DCC and applies to all data that is produced and delivered digitally, such as digital subscriptions and streaming services. In that respect, this paragraph does not apply to physical assets on which digital content is implemented that fall under the scope of the sale of goods.
Conformity and remedies
As well as with the sale of physical goods, the digital content needs to (subjectively and objectively) conform to the contract (article 7:50ae DCC). The digital contact therefore must be in line with the contract (subjective) and contain the required characteristics for normal use (objective). Unless agreed otherwise, the trader needs to start offering the (diligent) digital content to the consumer immediately after the contract has been concluded.
If the digital content does not conform with the sales contract, the consumer will be entitled to either claim performance, price reduction or to terminate the contract. If it would be impossible to repair the digital content, or if the costs for the reparation would not be proportionate, the consumer would have to settle for another remedy.
Obligation to complain
The most important difference between sale of goods and digital content concerns the obligation to complain. With regard to sale of goods, article 7:23 DCC makes clear that the consumer has to notify the seller about the default in the product within due time. This provision elaborates that if the consumer complains within two months after he became aware of the default, his obligation to complain in due time would be met. If the consumer complains after the two-month period, the consumer would have to proof that he complained in due time.
Article 7:50ap (2) DCC on the other hand, stipulates that no obligation to complain will apply to contracts for digital content. This means that even if the consumer is aware of a default in the digital content – and notwithstanding the two-year limitation period that applies to both sale of goods and digital content – the consumer would not have any active obligation to notify the trader about the default.
Feel free reaching out to Laurent van der Bruggen and Mathijs van Riet should you have any questions on this subject.
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