- Two new directives modernise product guarantees and regulate for the first time contracts for digital content and services.
- They will apply from 2022, after being transposed into each state’s law.
- Online sellers and manufacturers should review their sales terms and their agreements with suppliers.
The European Union has approved two directives, dated 20 May 2019, which were published in the Official Journal on 22 May: Directive (EU) 2019/771 on certain aspects of contracts for the sale of goods, and Directive (EU) 2019/770 on contracts for the supply of digital content and digital services. The two complement each other: one covers physical products and the other software, apps, online music or cloud storage.
Member states must transpose them by 1 July 2021 at the latest, and they will apply from 1 January 2022. The sale of goods directive replaces the 1999 directive on consumer goods guarantees. For shops, manufacturers and platforms that sell to consumers, it means updating rules that were not designed for e-commerce or connected products.
Product guarantees
The goods directive maintains a legal guarantee of at least two years and presumes that a lack of conformity appearing during the first year already existed when the product was delivered, so it is for the seller to prove otherwise. States may extend that period to two years. Under current Spanish rules the presumption period is six months, so the change will be significant.
If the product does not conform, the consumer is entitled to have it repaired or replaced and, if that is not possible or not done within a reasonable time, to a price reduction or to terminate the contract. The directive also covers goods with digital elements, such as connected devices, for which the seller must ensure the necessary updates for a reasonable period.
Digital content and services
The digital content and services directive regulates for the first time, at European level, the consumer’s rights when something does not work: it requires the product to conform to the contract, to be kept up to date and, if it does not, lets the consumer ask for it to be put right, for a price reduction or for termination of the contract. It also applies when the consumer pays not with money but by providing personal data.
This affects companies in very different sectors: from those selling apps or software as a service to those offering content platforms or storage. The main challenge will be adapting contracts and general terms to a regime of conformity and liability that is more demanding and more uniform across countries.
What to review
Although application is some way off, it is a good time to start reviewing general terms of sale, the guarantee periods offered and the returns policy, and to identify which products have digital elements that will require updates to be ensured. If the company sells in other Union countries, it is worth following how each one transposes.
It is also worth reviewing contracts with suppliers and manufacturers: if the seller answers to the consumer for a defect, it must be able to claim against whoever supplied the product, and the conditions of that claim depend on national law. A commercial law adviser can help organise the guarantee and liability clauses along the chain. It may also be the moment to review the sales documentation given to customers, such as manuals, warranty sheets and terms of use, so that they describe clearly what is offered, for how long and what maintenance or updates each product includes.
Guarantee rules change slowly, but with time contracts adapt better.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
