What is the effect of the European Directive 1999/44/EC?

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What is the effect of the European Directive 1999/44/EC?

In 1999 the European Parliament and Council of the European Union passed Directive 1999/44/EC on certain aspects of the sale of consumer goods and associated guarantees. It relied upon Article 153(1) and (3) of the Convention, which states “the Community should contribute to the achievement of a high level of consumer protection by the measures it adopts.” The Directive required Member States to implement it into their National Law.

The Directive was designed to give consumers across Europe a minimum standard of rules that would strengthen consumer confidence and enable consumers to make the most of the internal market.

The 2002 Regulations have been implemented in 4 major pieces of legislation. The Sale of Goods Act 1979 (SGA), the Supply of Goods and Services Act 1982 (SGSA), the Supply of Goods (Implied Terms) Act 1973 and the Unfair Contract Terms Act 1977 have all had provisions inserted. In general the Regulations deal with consumer remedies for faulty goods and consumer guarantees.

To assess the impact of the 2002 Regulations it is necessary to examine the provisions it implemented into UK law. If we compare these new regulations to the pre-regulations system we can identify the benefits consumers gain from these new regulations. We can establish whether the new regulation rights are different to the already existing provisions and assess whether they are better? We can then establish if they provide a better system of recourse for the consumer? The important changes are highlighted and explained briefly.

Who is a ‘consumer’?

Regulation 2 defines a ‘consumer’ for the purpose of the regulationsin the Unfair Contract Terms Act 1977. It provides that “consumer’ means any natural person who, in the contracts covered by these Regulations, is acting for purposes that are outside his business (emphasis added).”  The Regulations do not apply to services in general nor do they apply to second hand goods sold at auctions where the consumer had the opportunity to appear in person. By ‘attending in person’ they mean that web based auctions are not excluded.

Conformity with the Contract

The SGA governs whether there is a lack of conformity with the contract. Traditionally the buyer could only claim if either there had been a breach of condition or a breach of warranty. A condition is a term that goes to the heart of the contract. They are the important terms of the contract. A breach of warranty is a breach of the less serious terms of the contract. A breach of warranty only entitles the buyer to claim damages, however a breach of condition entitles him to damages and/or the option of repudiating the contract. Establishing if a term is or is not a condition or warranty has been a problem for the courts using the traditional system.

Under the new 2002 Regulations the test is whether the goods ‘conform to the contract’ or not. This can be interpreted as relating to all or any of the terms in a contract. However, when comparing the traditional system and the new provisions it is not immediately obvious of the advantages that consumers gain from this differing cause of action. Where the buyer communicates to the seller the specific purpose of the goods it will lead to an implied term of fitness for the purpose communicated. In relation to the implied term (s.14 SGA), that of ‘satisfactory quality’ Regulation 3 added the provisions that a seller can be responsible for statements made by him or others, ss.14(2D)-(2F). This section makes the seller liable for misrepresentations made by him, the producer or his representative where the representations, made with actual or constructive knowledge, were made to the world at large about specific characteristics of goods that enticed the buyer into the contract. For example, a consumer could bring a possible action against the seller because of the advertising claims of either the seller himself or the producer. The idea here is that the consumer is the weakest party and as such he can sue the seller who in turn can sue the producer for the advertising claim if it is wrong. 

However, there is a defence available to the seller. Under ss14(2E) if the seller can show that when the contract was made he could not reasonably have been aware of the statement, or that the statement had been withdrawn or corrected in public, or that the buyer could not have been influenced by the statement, then he will not be liable for statements made. Then ss14(2F) states that ss(2D) and (2E) do not prevent any public statement from being a relevant circumstance for the purposes of (2A) if the statement had been such a circumstance apart from those subsections. This allows the buyer to pursue a remedy under ‘satisfactory quality’ in ss(2A).The ‘satisfactory quality’ test is that goods must meet a standard that the reasonable man would regard as satisfactory, taking account of any description of the goods, the price and all other relevant circumstances. As such the buyer could argue that the description breaches the implied term of satisfactory quality without having to rely on the additional provisions.

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Under the new Regulations the onus of proof is on the seller to show that the buyer was not enticed into the contract by the misrepresentation (ss.14(2E)(c)).  It can be argued that as there is no requirement of ‘reasonableness’ the test can be construed as being subjective. However, it should be noted that there is no definition of what a ‘public statement’ is in the Regulations. This leaves the question open as to how exactly the courts are going to interpret this phrase in coming case law.

Fair Wear and Tear

Consumers cannot be expected to hold the ...

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