CONSUMER SALES IN THE NETHERLANDS AFTER

Transcription

1 CONSUMER SALES IN THE NETHERLANDS AFTER IMPLEMENTATION OF THE CONSUMER RIGHTS DIRECTIVE AND WITH A VIEW TO THE FUTURE COMMON EUROPEAN SALES LAW Marco B.M. Loos Amsterdam Law School Legal Studies Research Paper No Centre for the Study of European Contract Law Working Paper No Electronic copy available at:

2 Centre for the Study of European Contract Law Working Paper Series No Consumer sales in The Netherlands after implementation of the Consumer Rights Directive and with a view to the future Common European Sales Law Marco B.M. Loos m.b.m.loos@uva.nl Centre for the Study of European Contract Law Universiteit van Amsterdam P.O. Box BA Amsterdam The Netherlands Electronic copy available at:

3 Consumer sales in The Netherlands after implementation of the Consumer Rights Directive and with a view to the future Common European Sales Law Prof. Dr. Marco B.M. Loos * 1. Introduction In this paper I will describe the implementation of the Consumer Rights Directive, 1 or CRD, in The Netherlands. Section 2 will deal with the provisions of the implementing act and the relation between these provisions and other provisions of consumer law. Section 3 will discuss the relationship between the rules on consumer sales and the general rules on sales contracts in The Netherlands. In section 4, I will indicate whether and to what extent Dutch law would be affected if the proposal for a Common European Sales law would be enacted. Section 5 will summarize the main findings of the paper. 2. Implementation of Directive 2011/83/EU in The Netherlands 2.1. The implementation procedure According to Article 107 of the Dutch Constitution, civil law is to be codified in the Civil Code, but the legislator is allowed to regulate specific matters, e.g. matters of consumer protection law, also in specific legislation. As Article 120 of the Constitution forbids the courts to test the constitutionality of the laws this is seen as an exclusive task of the two Chambers of Parliament the legislator appears to be free how to implement European directives. However, the Dutch government is required to take the so-called Aanwijzingen voor de regelgeving (hereinafter referred to as: Aanwijzingen) 2 into account. Formally, these instructions for regulation are not a binding instrument, but ministers, secretaries of state and their staff at the ministries are nevertheless required to follow them or to explain when and why they derogate from them. Parliament and the Council of State (that advises the government and Parliament with regard to legislation) are not bound by the Aanwijzingen, but tend to follow them where possible. Aanwijzing 333 requires the government to incorporate directives as much as possible in existing legislation. 3 In The Netherlands, in accordance with Article 107 of the Constitution, civil law is largely codified in the 1992 Civil Code. As Dutch law does not have a separate Consumer Code, this implies that European consumer law directives are normally implemented in the Civil Code. This has been the case with important European directives such as the Unfair Contract Terms * Marco Loos is Professor of Private law, in particular of European Consumer Law, at the Centre for the Study of European Contract Law (CSECL) of the University of Amsterdam. This paper was originally prepared for the 1 st Ferrara Forum on European Consumer and Contract Law Consumer sales in the law of EU-Member States after the implementation of Directive 2011/83/EU on Consumer Rights and towards a Common European Sales Law, held in Ferrara on 9-10 October Directive 2011/83/EU of the European Parliament and of the Council of 25 October 2011 on consumer rights, amending Council directive 93/13/EEC and directive 1999/44/EC of the European Parliament and of the Council and repealing Council directive 85/577/EEC and directive 97/7/EC of the European Parliament and of the Council, OJ 2011, L 304/64. 2 The first version of the Aanwijzingen was published on 18 November 1992, Staatscourant 1992, 230. The latest amendments of the Aanwijzingen have led to a new formulation of Chapter 8 on the Preparation, adoption and implementation of binding EU legal acts, see the regulation of the Prime-Minister of 1 April 2011, no , houdende vaststelling van de negende wijziging van de Aanwijzingen voor de regelgeving, Staatscourant 2011, This latter publication contains both the amended text of the Aanwijzingen and the official explanation thereof. Both the Aanwijzingingen themselves and the explanation thereof are available on wetten.overheid.nl (last visited on 3 September 2014). 3 Aanwijzing 333 reads as follows: Bij implementatie wordt zoveel mogelijk aangesloten bij instrumenten waarin de bestaande regelgeving reeds voorziet. (In so far as possible, implementation takes place by amending of or adhering to existing legislation.) 1 Electronic copy available at:

4 Directive, 4 which was implemented through changes of section of Book 6 BW (Burgerlijk Wetboek, i.e. the Dutch Civil Code), and the Consumer Sales Directive, 5 which is incorporated in title 7.1 BW on sales contracts. Similarly, the 1997 Distance Selling Directive 6 had led to the introduction of section 7.1.9A BW. However, the Doorstep Selling Directive 7 was incorporated in the Doorstep Selling Act, which dated back to The provisions of the CRD mostly pertain to the conclusion of contracts, in particular precontractual obligations to inform, and a right of withdrawal with regard to distance contracts and contracts concluded off-premises. Moreover, the provisions apply to a great many of different types of consumer contracts. Because of the generic nature of the provisions of the Directive, the government considered it appropriate not to implement it in Book 7 of the Civil Code on specific contracts, but to introduce a new section 6.5.2B in Book 6, Title 5 on Contract Law in general, directly following the civil law provisions of the Services Directive and preceding the provisions on unfair terms. 9 As a result, the Civil Code now contains the Articles 6:230g to 230z BW. However, the provisions of Articles 18 and 20 CRD apply only to sales contracts and, for systematical reasons, were implemented through changes in title 7.1 BW. 10 Since the CRD covers the substance of both the Distance Selling Directive and the Doorstep Selling Directive, the existing provisions of section 7.1.9A BW and the whole of the Doorstep Selling Act have been repealed. 11 The bill to amend the Civil Code and to repeal the Doorstep Selling Act was introduced by the government on 13 January That was of course fairly late, since Member States were required to transpose the Consumer Rights Directive no later than 13 December 2013 and to apply these measures from 13 June The Netherlands have failed to meet the first of these deadlines, as the Act implementing the CRD was published in the Staatsblad, the official journal of The Netherlands, only on 3 April Article X of the Act determines that the act enters into force on 13 June The Act is applicable to contracts concluded as of that date; contracts concluded earlier remain to be covered by the legislation applicable before that date. 15 This implies that the second, more important deadline has been met by The Netherlands. 4 Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, OJ 1993, L 95/29. 5 Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees, OJ 1999, L 171/12. 6 Directive 97/7/EC of the European Parliament and of the Council of 20 May 1997 on the protection of consumers in respect of distance contracts, OJ 1997, L 144/19. 7 Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises, OJ 1985, L 372/31. 8 Colportagewet, Act of 7 September 1973, Staatsblad 1973, Cf. Kamerstukken II, 2012/13, , no. 7, p See the Explanatory Memorandum accompanying the bill, Kamerstukken II, 2012/13, , no. 3, p Kamerstukken II, 2012/13, , no. 3, p. 6-7; Kamerstukken II, 2012/13, , no. 7, p The few remaining provisions of the Doorstep Selling Act, applicable with regard to financial products concluded by way of canvassing techniques, were also incorporated in section 6.5.2B BW, see Kamerstukken II, 2012/13, , no. 3, p. 7. See also J. Luzak, V. Mak, Implementation of the Consumer Rights Directive The Netherlands, EUVR 2014/2, p Kamerstukken II, 2012/13, , nos Articles II under H, and VI repeal section 7.1.9A BW and the Doorstep Selling Act. 13 Article 28, paragraph 1, CRD. 14 Wet van 12 maart 2014 tot wijziging van de Boeken 6 en 7 van het Burgerlijk Wetboek, de Wet handhaving consumentenbescherming en enige andere wetten in verband met de implementatie van Richtlijn 2011/83/EU van het Europees Parlement en de Raad van 25 oktober 2011 betreffende consumentenrechten, tot wijziging van Richtlijn 93/13/EEG van de Raad en van Richtlijn 1999/44/EG van het Europees Parlement en de Raad en tot intrekking van Richtlijn 85/577/EEG en van Richtlijn 97/7/EG van het Europees Parlement en de Raad (PbEU L 304/64) (Implementatiewet richtlijn consumentenrechten), Staatsblad 2014, Cf. Article 190a Overgangswet nieuw Burgerlijk Wetboek (the Act pertaining to the Transition to the new Civil Code), introduced by Article VII of the Act of 12 March

5 2.2. Options in the CRD The first major question the Dutch legislator has had to answer, was whether or not the scope of the CRD was to be expanded to all contracts or to be limited to B2C-contracts, and whether or not the provisions should be applied also to these contracts which were excluded from the scope of the CRD, such as contracts for the construction or sale of immovables. Here, again, the Aanwijzingen offer guidance. Aanwijzing 331 indicates that the legislator should not make use of the options in a directive offered to the Member States to derogate from the directive or to provide specified additional rules. 16 This default option is explained by the fact that when the legislator abstains from such additional measures it is easier to meet the deadlines set by the European legislator, as the preparatory work for the ministerial staff is much more limited. For instance, impact studies on the costs of the additional measures need not take place. 17 As a result, the Dutch legislator has chosen not introduce additional precontractual information obligations or additional language requirements, as is allowed under Articles 5, paragraph 4, and 6, paragraph 7, CRD. 18 This implies that when a contract is concluded between a Dutch consumer and an Italian seller or service provider, that seller or service provider may provide the information he is required to give under the directive in Italian, provided of course that he does so in a clear and comprehensible manner. The government expressly confirmed that it follows from the principle of freedom of contract that the trader may determine in which language the contract is concluded, and that the consumer may subsequently take the choice of the contracting language into account when deciding whether or not to conclude the contract with the trader. 19 This does suggest, however, that the information is to be provided in the language in which the contract is concluded. Although the Civil Code does not contain an explicit provision to this extent, it may be argued that this follows from the transparency principle, which is implied in Articles 5, paragraph 1, and 6, paragraph 1, CRD and their counterparts in Articles 6:230l, paragraph 1, and 230m, paragraph 1, BW. Therefore, where the information is provided in a different language than the contracting language, this is likely to be a breach of the transparency principle and may therefore be considered an unfair commercial practice if the average consumer might have made a different decision whether or not to conclude the contract had she been aware of the fact that the information could be supplied in a language that she may not master. 20 Article 5, paragraph 3, CRD offers Member States the option not to apply the information obligations to on-premises contracts where the contract pertains to a day-to-day transaction that is performed immediately at the time of its conclusion. The Dutch legislator was of the view that the notion of a day-to-day transaction is unclear for both traders and consumers and that it would therefore lead to legal uncertainty in practice. Moreover, the aim of the provision is to alleviate the information burden of the trader, but that aim has already been met by the fact that the trader need not provide information that is already apparent from the context. 21 For these reasons the Dutch legislator did not exclude such contracts from the scope of the information obligations Aanwijzing 331 reads as follows: Bij implementatie worden in de implementatieregeling geen andere regels opgenomen dan voor de implementatie noodzakelijk zijn. (In case of implementation, the implementing act will not include any other rules than are required for the implementation.) 17 See the official commentary to Aanwijzing Kamerstukken II, 2012/13, , no. 3, p. 6; Kamerstukken II, 2012/13, , no. 7, p Kamerstukken II, 2012/13, , no. 7, p Cf. Articles 6:193d and 193f under b BW. 21 See Articles 5, paragraph 1, CRD and 6:230l BW. 22 Kamerstukken II, 2012/13, , no. 3, p. 6. 3

6 Notwithstanding the government s intention not to make use of the options provided for in the directive, the Dutch legislator decided to make use of three options mentioned in the CRD. Firstly, the de minimis exception for off-premises contracts with a value of 50 or less, provided for in Article 3, paragraph 4, CRD, was taken over: such contracts are excluded from the scope of section 6.5.2B, Article 6:230h, paragraph 2 under a, BW provides. The legislator was of the opinion that for such contracts the information obligations would be too burdensome for the trader. For this reason the legislator copied the pre-existing exception of the Doorstep Selling Act. 23 Whereas the exception for de minimis off-premises contracts was taken over to alleviate the administrative burdens of the directive, for the same reason the simplified information obligation for off-premises contract for immediately performed repair and maintenance services below 200 is not taken over. The government argued that this scheme, which follows from Article 7, paragraph 4, CRD, would hardly lead to any decrease in the administrative burdens for traders since the information is to be provided at a later moment or in a different manner anyway. 24 Taking over the exception would therefore complicate matters rather than simplifying them. Thirdly, the government made use of the option of Article 8, paragraph 6, CRD. According to this provision, Member States may provide that where a distance contract is to be concluded by telephone the trader is required to confirm the offer made to the consumer and that the consumer is bound by that offer only once she has signed the offer or has sent her consent in writing or, if the Member State so provides, on a durable medium. The Dutch government took up this opportunity in order to meet a previous demand by Parliament, but restricted the scope of the provision to distance contracts for the regular supply of services or gas, electricity, water or district heating that are concluded as a result of a telephone conversation initiated by the trader. 25 The government considered that in the case of these types of contracts there is a substantive risk that the contract is concluded by the use of misleading and aggressive sales techniques, as reports from the Authority Consumer and Markets had confirmed. Moreover, in the case of the regular supply of services, water or energy, the contractual period during which the consumer is bound may be long, and the financial risks that the consumer is subjected to may be higher than for services that are performed on a one-time basis only. The provision is, however, restricted to new contracts: where an existing contract is extended or renewed as a result of such a phone call the formal requirement does not apply, Article 6:230v, paragraph 6, BW provides. With regard to other services, the reports of the Authority Consumer and Markets did not show any evidence of problems. Moreover, with regard to the supply of (ordinary) goods, whether or not on the basis of a subscription, the government argues that there is less need for this type of protection as the consumer may withdraw from the contract after having received the goods. For this reason, such contracts are not covered by the form requirement. 26 The wording of Article 6:230v, paragraph 6, BW suggests that for contracts that are subject to the form requirement, the trader s confirmation of the conclusion of the contract must be in writing. However, during the parliamentary proceedings the government clarified that, in accordance with the general rule in Article 6:227a BW for electronic communications, an electronic declaration suffices provided that the authenticity of the contract is sufficiently guaranteed, and the moment of conclusion of the contract and the identity of the parties can be established Under the Doorstep Selling Act, the exclusion applied to contracts with a value of 34 or less. This amount had not been amended since the introduction of the Doorstep Selling Act in 1973; the Dutch legislator decided that the introduction of the new rules was the appropriate moment to extend the exclusion to contracts with a value between 34 and 50. See Kamerstukken II, 2012/13, , no. 3, p Kamerstukken II, 2012/013, , no. 3, p. 6; Kamerstukken II, 2012/013, , no. 7, p This is the commercial practice of cold calling. See also Luzak/Mak 2014, p Kamerstukken II, 2012/13, , no. 3, p ; Kamerstukken II, 2012/13, , no. 7, p Kamerstukken II, 2012/13, , no. 3, p. 52; Kamerstukken II, 2012/13, , no. 7, p

7 2.3. Goldplating Aanwijzing 331 not only suggests that the legislator should refrain from making use of the options offered by a directive, more generally it aims at preventing goldplating. The term goldplating refers to the situation where the implementation of a directive is taken up as an opportunity to introduce additional national provisions supplementing the provisions of the directive. Obviously, in the case of goldplating a Member State runs the risk of not being able to meet the deadlines set by the European legislator. Moreover, goldplating provisions may be subject to differing opinions in the doctrine and lead to lobbying, which may lead to differing views in Parliament and, therefore, additional delay in transposing the directive. 28 In this respect it is not surprising that the Dutch legislator has not chosen to extend the scope of the Act implementing the CRD to contracts which are not covered by the directive itself. First of all, all of the exceptions listed in Article 3, paragraph 3, CRD have been taken over in Article 6:230h, paragraphs 2 under b-m, 3 and 4, and with regard to contracts for the transport of persons only the provisions indicated in Article 3, paragraph 3 under k, CRD are applicable, Article 6:230h, paragraph 5 makes clear. Moreover, the scope of section 6.5.2B BW is explicitly restricted to B2Ccontracts. 29 The government was of the opinion that the provisions of the CRD and those of the Unfair Commercial Practices Directive 30 (hereinafter also referred to as: UCPD) do not lend themselves to be extended to B2B-contracts as they are too much focused on the position of consumers and as such cannot offer a solution to the problems that traders face, such as fake invoices for contracts that have never been concluded ( acquisition fraud ). The government did indicate that it would consider whether a limited number of these provisions could form inspiration for legislation specifically focussing on B2B-situations, either at the European or the national level. 31 Notwithstanding the restrictive approach to goldplating, the legislator has introduced one important change to the law which, in itself, has nothing to do with the implementation of the Consumer Rights Directive. The Unfair Commercial Practices Directive was implemented in the new section 6.3.3a BW as a specific tort. This implies that where a contract was concluded due to an unfair commercial practice, the consumer could claim damages on the basis of tort law. However, this does not offer any relief if the remedy the consumer wants is to no longer be bound by the contract. This suggests that damages do not provide the consumer with an effective remedy. In some cases the consumer could invoke mistake under Article 6:228 BW or unfair exploitation under Article 3:44 BW, or even fraud or threat under Article 3:44 BW, and thus invalidate the contract, but in order for the consumer to invoke any of these defects of consent she must be able to prove that the specific requirements of the relevant defect of consent have been met, and that will not always be possible. Again, this casts doubt on the effectiveness of regulating unfair commercial practices as a tort. In order to meet an earlier demand by Parliament, 32 the government has taken the opportunity to amend section 6.3.3a BW by introducing a new Article 6:193j, paragraph 3, BW. This provision now reads as follows: 28 See the official commentary to Aanwijzing See Article 6:230h, paragraph 1, BW. 30 Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-toconsumer commercial practices in the internal market and amending Council Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the European Parliament and of the Council and Regulation (EC) No 2006/2004 of the European Parliament and of the Council, OJ 2005, L 149/ Kamerstukken II, 2012/013, , no. 7, p. 9-10, See Kamerstukken II, 2012/13, , no. 3, p

8 3. Een overeenkomst die als gevolg van een oneerlijke handelspraktijk tot stand is gekomen, is vernietigbaar. (A contract concluded as a result of an unfair commercial practice is voidable.) This provision therefore does not change the criteria for an unfair commercial practice, but changes the consequences of such a practice as the resulting contract may be invalidated. As such, it escapes the full harmonisation nature of the UCPD, Article 3, paragraph 2, of that Directive makes clear. And the same applies with regard to the Consumer Rights Directive, as Article 3, paragraph 5, of the CRD also indicates that it does not affect national general contract law as regards the validity as this matter is not regulated in the CRD either. In addition, Article 6:193f, under b, BW qualifies the information to be provided under most of the information provisions for distance and off-premises contracts as essential information within the meaning of Article 6:193d BW. This means that this information is to be considered essential for the average consumer to make a decision whether or not to contract with the trader. Where the information is not provided and the consumer might have made a different transactional decision if the information had been provided, this then qualifies as a misleading omission and thus as a misleading commercial practice. On the basis of Article 6:193j, paragraph 3, BW, discussed above, this implies that the consumer can then invalidate the contract. During the parliamentary proceedings the government confirmed that if the information that was not provided pertained to the right of withdrawal, the consumer has the choice between invalidating the contract on the basis of a misleading omission if she proves that she might have made a different transactional decision had she been properly informed, and withdrawing from the contract on the basis of the extended period to exercise the right of withdrawal under Articles 9 and 10 CRD, as codified in Article 6:230o, paragraphs 1 and 2, BW. 33 A third example of goldplating is the extension of the definition of a consumer sales contract in Article 7:5 BW to include contracts for the supply of digital content within the scope of the consumer sales provisions. This will be further explorer below in section The relationship with existing consumer law and general contract law The amendment of the rules on unfair commercial practices and the decision where to implement the provisions of the CRD in the Civil Code indicate that the Dutch legislator was aware of the possible interaction between the provisions implementing the CRD and the existing consumer law and general contract law. The legislator has also indicated that where the trader breaches an information obligation which has not been specifically sanctioned in the CRD, 34 the consumer may 33 Cf. Kamerstukken II, 2012/013, , no. 7, p The Consumer Rights Directive and the implementation thereof in the Dutch Civil Code only provide an explicit remedy for the breach of certain information obligations. First, Article 6, paragraph 7, CRD and Article 6:230n, paragraph 3, BW) provide that the consumer is not required to pay additional charges if the trader has neglected to inform the consumer thereof before the contract was concluded. Secondly, Articles 11 CRD and Article 6:230o, paragraph 2, BW set out that where the trader has not properly informed the consumer as to the existence of the right of withdrawal or the conditions for the exercise thereof, the cooling-off period is extended with a maximum of one year after the original cooling-off period has ended. Finally, Articles 14, paragraph 4, CRD and 6:230s, paragraph 5, BW provide that when services, energy or water are delivered during the cooling-off period without the consumer having been informed of the information on the right of withdrawal or without the consumer having expressly requested the performance of the contract during the cooling-off period, and the consumer subsequently withdraws from the contract, she is not required to pay for the performances rendered. Similarly, these provisions indicate that where the contract pertained to the provision of digital content other than on a durable medium and the consumer did not expressly agree to the delivery before the end of the cooling-off period, did not expressly waive her right to withdraw, or the trader has neglected to confirm the consumer s express agreement to the early performance, the consumer need not pay for the digital content provided during the cooling-off period. 6

9 invoke one of the remedies available under general contract law for breach of contract. 35 As discussed above in section 2.3, a failure to provide the required information may also amount to an unfair commercial practice, which opens up the possibility to invalidate the contract and to claim damages under tort law. 36 And finally, the legislator indicated, the consumer may also be able to invalidate the contract on the basis of mistake (Article 6:228 BW). 37 Moreover, where the requirements to invalidate the contract on the basis of mistake have been met, Article 6:230 BW offers the mistaken party the possibility to ask the court to amend the contract instead of avoiding it altogether. The court may then alter the contract in such a way that the disadvantage the consumer has sustained as a consequence of the missing information is taken away. In other words: where the trader has not provided information he was required to give to the consumer, the consumer has a whole range of remedies he may invoke, which remedies may cumulate where they do not exclude each other Enforcement of the CRD Article 23 CRD requires the Member States to ensure that adequate and effective means exist to ensure compliance with this Directive. With regard to individual enforcement, the remedies mentioned above, in section 2.4, meet these requirements. In order to effect them, consumers may resort both to ADR (which is available at a low price in many sectors, provided that the trader is a member of an organization of professionals) and to court-based action. 39 Under Article 23, paragraph 2, CRD, Member States are required to enable collective enforcement procedures by competent public authorities, consumer organizations and organizations of professionals. Dutch law offers such actions. 40 In accordance with Article 24 CRD, the Authority Consumers and Markets has the power to impose penalties on the trader who infringes the implemented provisions of the CRD. Until recently, the maximum fine was only 70, However, the maximum has recently been raised to 450,000, 42 and this amount is likely to be further raised to 900,000 in the near future. Moreover, where the annual turnover of the trader exceeds the amount of 45 million, the maximum will be 1% of the annual turnover for minor and 10% of the annual turnover for serious infringements. 43 The maximum for minor infringements is likely to be raised to 2% of the annual turnover. 44 Moreover, the legislator has indicated that it will consider whether the annual turnover should be calculated on the basis of the trader s annual worldwide turnover instead of the trader s annual turnover in the Dutch market In particular specific performance (Article 3:296 or, in the case of a consumer sales contract, Article 7:21 BW), damages for breach of contract (Article 6:74 BW) and termination or price reduction for non-performance (Article 6:265 or, in the case of a consumer sales contract, Article 7:22 BW). 36 Cf. Articles 6:193b, 193d, 193f, under b, and 193j BW. 37 Cf. Kamerstukken II, 2012/13, , no. 3, p See also M.Y. Schaub, Contracteren op afstand met consumenten: dat gaat zomaar niet!, Tijdschrift voor de Procespraktijk 2014/2, p Cf. Kamerstukken II, 2012/013, , no. 7, p. 8. For instance, the remedies termination and damages may cumulate, but termination and avoidance, termination and specific performance, and specific performance and avoidance exclude one another. 39 Cf. Kamerstukken II, 2012/13, , no. 3, p See Articles 3:305a-305c BW. 41 See Luzak/Mak 2014, p See Articles 12l and 12m of the Instellingswet Autoriteit Consument en Markt (Staatsblad 2013, 103), introduced by the Act of 25 June 2014, Staatsblad. 2014, 247 and entered into force on 1 August 2014 (Staatsblad 2014, 266). 43 See Article 12m of the Instellingswet Autoriteit Consument en Markt. 44 Kamerstukken II, 2012/013, , no. 3, p. 8, 10-11; Kamerstukken I, 2012/13, , no. C, p Cf. Kamerstukken I, 2013/14, , no. C, p. 23. A draft bill was published online for public consultation; reactions could be submitted until 5 September 2014, see (last visited on 3 September 2014). 7

10 3. Consumer sales provisions versus general rules on sales contracts 3.1. Delivery and late delivery Articles 18 (on delivery) and 20 CRD (on risk) relate specifically to sales contracts and add to the pre-existing provisions of the Consumer Sales Directive. These provisions have been implemented in Title 7.1 BW, where the provisions of the Consumer Sales Directive also had been implemented. In accordance with the general approach to consumer law, the general rules on sales contracts apply unless a specific derogation is made for consumer sales contracts. Normally, such derogation is to the advantage of the consumer, 46 but in the case of Article 18 CRD the opposite is true. Under general contract law, in the absence of an agreement between the parties the creditor may demand immediate performance by the debtor. The new provision of Article 7:9, paragraph 4, BW, now provides that in the case of a consumer sales contracts where the parties have not made a different arrangement (either explicitly or tacitly), delivery is due within 30 days after the moment of conclusion of the contract. It could be argued, however, that in most cases the parties will have made a tacit agreement allowing the consumer to claim immediate performance it would be rather odd if a consumer would be allowed to claim delivery of the purchased loaf of bread only one month after concluding the sales contract The rest of Article 18 CRD is implemented by means of the new Article 7:19a BW. By and large this provision mirrors in different wording what is the content of the provisions of Articles 6:81-83 BW, which apply in case of non-delivery of goods in other sales contracts, but since the CRD is based on full harmonisation, the legislator had to ensure that the directive is transposed to the letter. 47 Moreover, there are some differences, as the notice which is required to put the seller in default (the mise-en-demeure) need not be in writing under the CRD, where it would have to be under Articles 6:81 and 82 BW. Under the new Article 7:19a BW, it is clarified that no such form requirement applies in the case of a consumer sales contract. Therefore, an oral complaint satisfies the requirements of Article 7:19a BW, provided that the seller is given a reasonable period to deliver after having received the complaint. 48 Yet, not regulated in so many words is what the legal consequences are if the set period for delivery is deemed to be unreasonable by the court. One could argue that the notice does not meet the formal requirements of Article 7:19a BW and therefore is void. This line of reasoning is difficult to reconcile with the views on the corresponding Article 6:82 BW, where it is argued that such a notice period is to be converted into a notice period of reasonable length. In my view, this is indeed the proper approach also to the notice period set under Article 7:19a BW Digital content Article 17, paragraph 1, CRD makes clear that Article 18 CRD does not apply to contracts for the supply of energy or the supply of digital content which is not supplied on a tangible medium. The Dutch legislator has qualified such contracts as consumer sales contracts by amending Article 7:5 BW. However, the legislator has drafted the definition of the types of contracts for the supply of digital content so broadly that the consumer sales rules now also apply to streaming of digital content, for instance the streaming of films and video and online radio. Obviously, this was not 46 Although there are some exceptions to that rule in Dutch consumer law. In particular, Article 7:24, paragraph 2, BW brings about that where both the seller on the basis of non-conformity, and the producer on the basis of product liability would be liable, the seller is liable only if the seller knew or ought to have known of the defect, if he had guaranteed the absence of the defect, or in so far as the producer is not liable on the basis of the 500 threshold for damage to other consumer goods. 47 See also Luzak/Mak 2014, p Kamerstukken II, 2012/13, , no. 3, p See more extensively M.B.M. Loos, Consumentenkoop, Monografie BW 65-B, Deventer: Kluwer, third edition, 2014, no. 34, p

11 intended, and after critique in literature 50 the legislator announced that it will introduce a bill to restrict the application of consumer sales law to cases where the digital content will be supplied for unlimited use in time and where the consumer has the physical control over the digital content after delivery, e.g. because he was able to store it on a hard disk for later use. 51 When amending the definition of a consumer sales contract in order to apply consumer sales law to contracts for the supply of digital content, the legislator encountered a second problem: it thought that as a consequence of Article 17, paragraph 1, CRD, Article 7:9 BW should not be applicable to such contracts. 52 In the doctrine this decision has been criticized as unconvincing: Article 17, paragraph 1, CRD only provides that the Articles 18 and 20 CRD are not applicable to such contracts, which means that for contracts for the supply of energy or the supply of digital content which is not supplied on a tangible medium no harmonized rules on delivery exist. This implies that the Member States remain free to determine which rules on delivery apply to such contracts. A consequence of the exclusion of Article 7:9 BW to such contracts is that also the general rule in paragraph 1 of this Article that the trader is required to perform is not applicable, which would suggest that the contract is not-enforceable. 53 This, of course, was not intended by the legislator. The government has indicated that a new bill will be introduced to rectify this legislative mistake Passing of risk Article 7:10 BW contains the general rule for sales contracts on the passing of risk. It provides that risk normally passes at delivery (paragraph 1). However, on the basis of general contract law delivery would normally take place at the seller s place of business, 55 which implies that if the goods are identified to the contract (e.g. by labelling them) and the seller has notified the buyer thereof, delivery has taken place at that moment and risk has passed to the buyer. Moreover, if the buyer s co-operation in delivery is required and the buyer is in default in accepting delivery, risk passes when the buyer should have taken delivery (paragraph 2). On the other hand, risk remains with the seller even after delivery if the buyer on good grounds has invoked termination of the sales contract or replacement of the defective goods (paragraph 3). Where the parties had agreed on delivery at the consumer s house the general rule on passing of risk could be unfair to the consumer. For that reason, Article 7:11 BW (old) provided that in the case of a consumer sales contract where the parties had agreed on transportation of the goods by the seller to the consumer s house, risk would only pass when the consumer obtained the physical possession of the goods. However, the parties could derogate from this provision by an individually negotiated term. 56 The implementation of Article 20 CRD has led to a new formulation of Article 7:11 BW and, more importantly, deleted the possibility for the parties to derogate from this provision by an individually negotiated term Cf. Chr. Jeloschek, V. van Druenen, De implementatie van het nieuwe regime voor overeenkomsten op afstand. Is de wetgever te ver doorgeschoten wat betreft de levering van digitale inhoud?, Tijdschrift voor Internetrecht 2013/2, p ; E. Neppelenbroek, Stop het consumentenkooprecht voor digitale inhoud!, Nederlands Juristenblad 2013/33, no. 2014, p ; M.B.M. Loos, Onvolkomenheden bij de implementatie van de richtlijn consumentenrecht, Nederlands Juristenblad 2013/38, no. 2255, p Kamerstukken I, 2013/14, , no. E, p Kamerstukken II, 2012/13, , no. 3, p Cf. Jeloschek/Van Druenen 2013, p ; Neppelenbroek 2013, p. 2261; Loos 2013, p Kamerstukken I, 2013/14, , no. E, p Cf. Article 6:41 BW. 56 Article 7:6, paragraph 2, BW (old). 57 Article 7:6, paragraph 2, BW now no longer lists Article 7:11 BW as a provision from which the parties may derogate by an individually negotiated term. 9

12 Article 7:11 BW does not apply to contracts for the supply of energy or the supply of digital content which is not supplied on a tangible medium, but this exclusion is likely to be deleted as well in the near future Effects of the adoption of CESL to Dutch sales law 4.1. CESL, CISG and domestic sales law If the proposal for a Common European Sales Law (hereinafter referred to as: CESL) 59 would be adopted, this would introduce yet another regime that may be applicable to a sales contract, in addition to the ordinary sales rules and the specific consumer sales rules in the Civil Code, and with regard to international commercial contracts pertaining to the sale of movable goods the provisions of the Vienna Sales Convention (hereinafter referred to as: CISG). 60 It is uncertain how this would affect Dutch sales law, but it stands to reason that it contributes to the growing complexity of sales law. This may to some extent be softened by the fact that parties must opt-in to CESL, whereas CISG applies automatically in a cross-border commercial sales contract that is governed by Dutch sales law, and domestic sales law applies automatically to other contracts where the law applicable is that of The Netherlands. The complexity would be slightly diminished if the scope of CESL would be restricted to cross-border distance contracts, as the European Parliament proposes. 61 The Parliament did not propose to restrict the scope of CESL to consumer contracts. Instead, it suggested extending the scope to all B2B-contracts, whether or not any of the parties is a small or medium-sized enterprise. 62 The consequence remains, however, that B2B-contracts may be governed by 3 instruments (national law, CISG and CESL), and consumer contracts by 2 (national law and CESL). Moreover, in those areas where CESL (or CISG) is silent, the otherwise applicable national law must be applied. This means that where the parties opt into CESL, problems of private international law continue to exist, but in fewer cases than presently is the case, since CESL covers more subjects than CISG, 63 and CESL may be applied to consumer contracts, whereas CISG is available only for B2B-contracts. Yet, CESL does not cover the whole of sales law. In fact, there are important caveats that prevent that CESL may be considered an effective instrument for sales contracts. 64 First, matters of invalidity of the contract for reasons of public policy and good morals, and matters of representation have been left out of CESL and will therefore have to be determined on the basis of the applicable national law. The same is true for matters of invalidity arising from incapacity of the buyer. The absence of Europeanised rules for the capacity of minors is problematic, in particular for businesses that conclude contracts online. 65 In this respect it is relevant to note that a relatively large number of 58 Kamerstukken I, 2013/14, , no. E, p Proposal for a Regulation on a Common European Sales Law (COM (2011) 635 final, available online at (last visited on 3 September 2014). 60 United Nations Convention on Contracts for the International Sale of Goods, See amendment 60 amending Article 4, paragraph 1, CESL. The text adopted by the European Parliament in its first reading is produced in: European Parliament, Texts adopted Part III at the sitting of Wednesday 26 February 2014, P7_TA(2014)0159, available at DOC+XML+V0//EN&language=EN (last visited on 3 September 2014). 62 See amendment 70 amending Article 7 CESL, deleting the second sentence of paragraph 1 and deleting paragraph 2 altogether. 63 See M.B.M. Loos, H.N. Schelhaas, Commercial sales: the Common European Sales Law compared to the Vienna Sales Convention, European Review of Private Law 2013/1, p These, and other, matters not regulated in CESL are listed in recital (27) of the preamble to CESL (as proposed by the European Commission) and amendment 76 of the European Parliament introducing the new Article 11a, paragraph 2, CESL. 65 See M.B.M. Loos, N. Helberger, L. Guibault, C. Mak, L. Pessers, K.J. Cseres, B. van der Sloot, R. Tigner, Analysis of the applicable legal frameworks and suggestions for the contours of a model system of consumer protection in relation to digital content contracts, FINAL REPORT: Comparative analysis, Law & Economics analysis, assessment and development of recommendations for possible future rules on digital content contracts, 2011, p This report 10

13 distance contracts concluded online are concluded by minors, in particular in so far as the supply of digital content (including music and gaming) is concerned, and that Member States have very differing laws on incapacity of minors. 66 Thirdly, and probably most problematic, is the absence of any rules pertaining to the transfer of ownership from seller to buyer. This implies that the dispute between consensual systems, such as French and Italian law, and those that make the transfer of ownership conditional upon delivery, such as Dutch and German law, remains unsettled: CESL requires the seller to transfer ownership, 67 but the time at which ownership is transferred has expressly been left unregulated. 68 This implies that the law applicable must determine whether or not a buyer has already obtained the ownership of the goods which is particularly relevant in case of insolvency of any of the contracting parties. This does not seem to provide sufficient trust for the parties to be able to rely on CESL: even for this fundamental issue a return to national law and to private international law is still needed Differences between Dutch (consumer) sales law and CESL Digital content In some areas, CESL differs from the existing rules in Dutch (consumer) sales law. This is not so much the case with regard to digital content as such contracts are qualified as consumer sales contracts if the trader is a professional and the buyer a consumer. However, CESL is available also where the digital content is not supplied in exchange for the payment of a price in money, 69 whereas Dutch sales law requires payment of a price in money Duty to notify An important difference between CESL and Dutch law pertains to the duty to notify. Prior to the 1999 Consumer Sales Directive, Article 7:23, paragraph 1, BW (old) already recognized a duty to notify in all sales contracts. 71 The purpose of the duty to notify is to protect the seller against late claims from the buyer which as a result of their tardiness are difficult for the seller to contest. In Dutch law, this provision is interpreted extensively: if the buyer fails to timely notify the seller of a defect he not only loses the rights based on non-conformity, but also the right to claim avoidance of the contract on the basis of mistake or fraud or to claim damages on the basis of tort law in so far as the facts sustaining such claims are the same as those which could be used to justify a claim based on non-conformity. 72 The idea behind this extensive interpretation of the duty to notify is that the same facts may allow for different remedies, and the purpose of the duty to notify would be was prepared for the European Commission and is available online at and at (last visited on 3 September 2014). 66 See Loos/Helberger/Guibault/Mak/Pessers/Cseres/Van der Sloot/Tigner 2011, p , referring to the laws of Finland, France, Germany, Hungary, Italy, The Netherlands, Poland, Spain, the United Kingdom, and that of non- Members Norway and the United States. See also the first report to the European Commission, which contains the national reports on these matters and which is also available at (last visited on 3 September 2014). 67 Cf. Article 91 sub (b) CESL. 68 The same is true for CISG, see Article 4 under b CISG. 69 See Article 5 under (b) of the Regulation. 70 See Article 7:1 BW. 71 And even more generally, Article 6:89 BW requires the creditor of any defective performance to notify the defect to the debtor within reasonable time after the creditor has or should have discovered the defect. 72 See Parl. Gesch. Boek 7, p , 152 with regard to mistake, HR 15 April 2011, ECLI:NL:HR:2011:BP0630, NJ 2013, 139 (Bloemert/Horenberg) and HR 23 November 2007, ECLI:NL:HR:2007:BB3733, NJ 2008, 552 (Ploum/Smeets en Geelen I) with regard to tort law, and Court of Appeal Amsterdam 6 December 2011, as reproduced in the conclusion of Advocate-General Wissink of 31 May 2013, ECLI:NL:PHR:2013:CA

14 undermined if the buyer could still invoke another remedy than those based on non-conformity. 73 After the implementation of the Consumer Sales Directive, the duty to notify was amended for consumer sales contracts in order to comply with the directive. Therefore, under the current text of Article 7:23, paragraph 1, BW the consumer is not required to examine the goods as the duty to notify only applies after the actual discovery of the defect, and the consumer has complied with the duty if he notifies the seller of the defect within 2 months after the actual discovery of the defect. However, if the duty is breached, the consumer still loses all rights related with the non-conformity, including the right to invoke to claim damages under tort law, or to claim avoidance of the contract based on mistake or fraud based on the same factual circumstances. 74 This is different under the Commission s proposal, as Article 106, paragraph 3, CESL explicitly excludes the duty to notify where the buyer is a consumer. However, in the text adopted by the European Parliament in its first reading, amendment 201 amends Article 119 CESL in such a way that the consumer does lose the right to terminate the contract if he does not give notice of termination within two months from when the right arose or the consumer became aware of the non-performance, whichever is later. The amendment therefore re-introduces a limited duty to notify in consumer sales contracts, restricted to the exercise of the right to terminate the contract. However, even the text adopted by the Parliament gives no room for an extensive interpretation of the duty to notify in consumer sales contracts as defended under Dutch law. It is difficult to predict whether this restrictive approach to the duty to notify will have effect on Dutch consumer sales law. On the one hand, it could convince the Dutch courts that the duty to notify should not be interpreted as extensively as at present is the case. Although the duty to notify applies to consumer sales contract, the extensive interpretation of that duty does not follow from the text of the Civil Code itself. On the other hand, the fact that CESL does not recognize the duty to notify in consumer sales contract or (in the text adopted by the European Parliament) only in a limited way could also withhold traders from offering consumers the possibility to have CESL govern the contract Prescription Yet, CESL does have something to offer to traders which Dutch law does not: finality. In Dutch law, a claim based on non-conformity may arise even many years after delivery if the defect only then becomes apparent. Obviously, consumers will need to take into account that defects may occur due to normal tear and wear, but some defects simply should not (yet) occur, even years later. For instance, suppose a consumer has bought a new car. Thirteen years later it becomes clear that the car does and never did meet the standards that applied when the sales contract was concluded, e.g. because the coach-work had not been welded properly. If this is the case, under Dutch law the consumer can still claim that at the time of delivery the car did not conform to the contract, and subsequently she may claim damages or price reduction, or even termination of the contract, provided that the defect is notified within 2 months after discovery of the defect. 75 The claim based on non-conformity subsequently prescribes 2 years after the notification of the defect, Article 7:23, paragraph 2, BW provides. Paragraph 3 adds that prescription is suspended as long as the buyer cannot exercise her rights due to intentional conduct of the trader. Moreover, if the consumer demands performance of a remedy for non-conformity in court before the claim has prescribed, the period of prescription is renewed (Article 3:316 BW), and the same applies if the consumer in a 73 The extensive interpretation is both supported and disputed in legal writing, see M.B.M. Loos, Consumentenkoop, Monografie BW 65B, Deventer: Kluwer, third edition, 2014, no. 40, p , with references. 74 Recent case-law shows, however, that where the late notification of a defect has not led to any detriment for the seller, this is to be taken into account when determining whether the notification was still timely, see HR 8 February 2013, ECLI:NL:HR:2013:BY4600, RvdW 2013, 253 (Van de Steeg/Rabobank Noord-Holland Noord). 75 See Articles 7:17 and 18 (non-conformity), 7:21 (repair and replacement), 7:22 (price reduction and termination), 7:23, paragraph 1 (duty to notify) and 7:24, read together with Article 6:74 ff BW (damages). 12