(4) E-commerce is a key driver for growth within the internal market.
However, its growth potential is far from being fully exploited.
In order to strengthen Union competitiveness and to boost growth, the Union needs to act swiftly and encourage economic actors to unleash the full potential offered by the internal market.
The full potential of the internal market can only be unleashed if all market participants enjoy smooth access to cross-border sales of goods including in e-commerce transactions.
The contract law rules on the basis of which market participants conclude transactions are among the key factors shaping business decisions as to whether to offer goods cross-border.
Those rules also influence consumers' willingness to embrace and trust this type of purchase.
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(8) While consumers enjoy a high level of protection when they purchase from abroad as a result of the application of Regulation (EC) No 593/2008, legal fragmentation also negatively affects consumers' levels of confidence in cross-border transactions.
While several factors contribute to this mistrust, uncertainty about key contractual rights ranks prominently among consumers' concerns.
This uncertainty exists independently of whether or not consumers are protected by the mandatory consumer contract law rules of their own Member State in the event that sellers direct their cross-border activities to them, or of whether or not consumers conclude cross-border contracts with sellers without the respective seller pursuing commercial activities in the consumer's Member State.
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(9) While online sales of goods constitute the vast majority of cross-border sales in the Union, differences in national contract laws equally affect retailers using distance sales channels and retailers selling face-to-face and prevent them from expanding across borders.
This Directive should cover all sales channels, in order to create a level playing field for all businesses selling goods to consumers.
By laying down uniform rules across sales channels, this Directive should avoid any divergence that would create disproportionate burdens for the growing number of omni-channel retailers in the Union.
The need for retaining consistent rules on sales and guarantees for all sales channels was confirmed in the Commission's Fitness Check on consumer and marketing law published on 29 May 2017, which also covered Directive 1999/44/EC.
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(14) The term ‘ goods’ as provided for under this Directive should be understood to include ‘ goods with digital elements’, and therefore to also refer to any digital_content or digital_service that is incorporated in or inter-connected with such goods, in such a way that the absence of that digital_content or digital_service would prevent the goods from performing their functions.
Digital content that is incorporated in or inter-connected with a good can be any data which are produced and supplied in digital form, such as operating systems, applications and any other software.
Digital content can be pre-installed at the moment of the conclusion of the sales_contract or, where that contract so provides, can be installed subsequently.
Digital services inter-connected with a good can include services which allow the creation, processing or storage of data in digital form, or access thereto, such as software-as-a-service offered in the cloud computing environment, the continuous supply of traffic data in a navigation system, or the continuous supply of individually adapted training plans in the case of a smart watch.
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(15) This Directive should apply to contracts for the sale of goods, including goods with digital elements where the absence of the incorporated or inter-connected digital_content or digital_service would prevent the goods from performing their functions and where that digital_content or service is provided with the goods under the sales_contract concerning those goods.
Whether the supply of the incorporated or inter-connected digital_content or digital_service forms part of the sales_contract with the seller should depend on the content of this contract.
This should include incorporated or inter-connected digital_content or digital_services the supply of which is explicitly required by the contract.
It should also include sales_contracts which can be understood as covering the supply of specific digital_content or a specific digital_service because they are normal for goods of the same type and the consumer could reasonably expect them given the nature of the goods and taking into account any public statement made by or on behalf of the seller or other persons in previous links of the chain of transactions, including the producer.
If, for example, a smart TV were advertised as including a particular video application, that video application would be considered to be part of the sales_contract.
This should apply regardless of whether the digital_content or digital_service is pre-installed in the good itself or has to be downloaded subsequently on another device and is only inter-connected to the good.
For example, a smart phone could come with a standardised pre-installed application provided under the sales_contract, such as an alarm application or a camera application.
Another possible example is that of a smart watch.
In such a case, the watch itself would be considered to be the good with digital elements, which can perform its functions only with an application that is provided under the sales_contract but has to be downloaded by the consumer onto a smart phone; the application would then be the inter-connected digital element.
This should also apply if the incorporated or inter-connected digital_content or digital_service is not supplied by the seller itself but is supplied, under the sales_contract, by a third party.
In order to avoid uncertainty for both sellers and consumers, in the event of doubt as to whether the supply of the digital_content or the digital_service forms part of the sales_contract, the rules of this Directive should apply.
Furthermore, ascertaining a bilateral contractual relationship, between the seller and the consumer, of which the supply of the incorporated or inter-connected digital_content or digital_service forms part should not be affected by the mere fact that the consumer has to consent to a licensing agreement with a third party in order to benefit from the digital_content or the digital_service.
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(17) For the purpose of legal clarity this Directive should lay down a definition of a sales_contract and also clearly define its scope.
The scope of this Directive should also cover contracts for goods that are yet to be produced or manufactured, including under the consumer's specifications.
Furthermore, an installation of the goods could fall within the scope of this Directive if the installation forms part of the sales_contract and has to be carried out by the seller or under the seller's responsibility.
Where a contract includes elements of both sales of goods and provision of services, it should be left to national law to determine whether the whole contract can be classified as a sales_contract within the meaning of this Directive.
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(18) This Directive should not affect national law to the extent that the matters concerned are not regulated by this Directive, in particular with regard to the legality of the goods, damages and general contract law aspects such as the formation, validity, nullity or effects of contracts.
The same should apply in relation to the consequences of the termination of the contract and to certain aspects regarding repair and replacement that are not regulated in this Directive.
When regulating the rights of parties to withhold the performance of their obligations or part thereof until the other party performs its obligations, Member States should remain free to regulate the conditions and modalities regarding the withholding of payment of the price by the consumer.
Member States should also remain free to regulate the consumer's entitlement to compensation for damage suffered as a consequence of an infringement by the seller of this Directive.
This Directive should also not affect national rules that do not specifically concern consumer contracts and provide for specific remedies for certain types of defects that were not apparent at the time of conclusion of the sales_contract, namely national provisions which may lay down specific rules for the seller's liability for hidden defects.
This Directive should also not affect national laws providing for non-contractual remedies for the consumer, in the event of lack of conformity of goods, against persons in previous links of the chain of transactions, for example manufacturers, or other persons that fulfil the obligations of such persons.
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(21) Member States should also remain free to extend the application of the rules of this Directive to contracts that are excluded from the scope of this Directive, or to otherwise regulate such contracts.
For instance, Member States should remain free to extend the protection afforded to consumers by this Directive also to natural or legal persons that are not consumers within the meaning of this Directive, such as non-governmental organisations, start-ups or SMEs.
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(22) The definition of a consumer should cover natural persons who are acting outside their trade, business, craft or profession.
However, Member States should also remain free to determine in the case of dual purpose contracts, where the contract is concluded for purposes that are partly within and partly outside the person's trade, and where the trade purpose is so limited as not to be predominant in the overall context of the contract, whether, and under which conditions, that person should also be considered a consumer.
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(28) Given that the digital_content or digital_services incorporated in or inter-connected with goods are constantly developing, sellers may agree with consumers to provide updates for such goods.
Updates, as agreed in the sales_contract, can improve and enhance the digital_content or digital_service element of goods, extend their functionalities, adapt them to technical developments, protect them against new security threats or serve other purposes.
The conformity of goods with digital_content or digital_services which are incorporated in or inter-connected with the goods should, therefore, also be assessed in relation to whether the digital_content or digital_service element of such goods is updated in accordance with the sales_contract.
Failure to supply updates that had been agreed in the sales_contract should be considered as a lack of conformity of the goods.
Moreover, defective or incomplete updates should also be considered as a lack of conformity of the goods, given that that would mean that such updates are not performed in the manner stipulated in the sales_contract.
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(29) In order to be in conformity, the goods should not only comply with the subjective requirements for conformity but should in addition comply with the objective requirements for conformity set out in this Directive.
Conformity should be assessed, inter alia, by considering the purpose for which goods of the same type would normally be used, whether they are supplied with the accessories and instructions that the consumer can reasonably expect to receive or whether they correspond to the sample or model that the seller made available to the consumer.
The goods should also possess the qualities and features which are normal for goods of the same type and which the consumer can reasonably expect, given the nature of the goods and taking into account any public statement made by or on behalf of the seller or other persons in previous links of the chain of transactions.
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(30) In addition to contractually agreed updates, the seller should also provide updates, including security updates, in order to ensure that goods with digital elements remain in conformity.
The seller's obligation should be limited to updates which are necessary for such goods to maintain their conformity with the objective and subjective requirements for conformity laid down in this Directive.
Unless the parties have contractually agreed otherwise, the seller should not be obliged to provide upgraded versions of the digital_content or digital_service of the goods or to improve or extend the functionalities of goods beyond the conformity requirements.
If an update provided by the seller, or by a third party supplying the digital_content or digital_service under the sales_contract, causes a lack of conformity of the good with digital elements, the seller should be liable for bringing the good into conformity again.
The consumer should remain free to choose whether to install the updates provided.
Where the consumer decides not to install the updates which are necessary for the goods with digital elements to maintain their conformity, the consumer should however not expect such goods to remain in conformity.
The seller should inform the consumer that the consumer's decision not to install updates which are necessary for keeping the goods with digital elements in conformity, including security updates, will affect the seller's liability for conformity of those features of the goods with digital elements which the relevant updates are supposed to maintain in conformity.
This Directive should not affect obligations to provide security updates laid down in other Union law or in national law.
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(32) Ensuring longer durability of goods is important for achieving more sustainable consumption patterns and a circular economy.
Similarly, keeping non-compliant products out of the Union market by strengthening market surveillance and providing the right incentives to economic operators is essential in order to increase trust in the functioning of the internal market.
For those purposes, product-specific Union legislation is the most appropriate means of introducing durability and other product-related requirements in relation to specific types or groups of products, using for this purpose adapted criteria.
This Directive should therefore be complementary to the objectives pursued in such Union product-specific legislation, and should include durability as an objective criterion for the assessment of conformity of goods.
Durability in this Directive should refer to the ability of the goods to maintain their required functions and performance through normal use.
In order for goods to be in conformity, they should possess the durability which is normal for goods of the same type and which the consumer can reasonably expect given the nature of the specific goods, including the possible need for reasonable maintenance of the goods, such as the regular inspection or changing of filters in a car, and any public statement made by or on behalf of any person constituting a link in the chain of transactions.
The assessment should also take into account all other relevant circumstances, such as the price of the goods and the intensity or frequency of the use that the consumer makes of the goods.
In addition, insofar as specific durability information is indicated in any pre-contractual statement which forms part of the sales_contract, the consumer should be able to rely on them as a part of the subjective requirements for conformity.
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(37) Enhancing legal certainty for both consumers and sellers requires a clear indication of the time when the conformity of the goods should be assessed.
The relevant time for assessing the conformity of the goods should be the time when the goods are delivered.
This should also apply to goods which incorporate or are inter-connected with digital_content or a digital_service supplied through a single act of supply.
However, where the digital_content or digital_service incorporated in or inter-connected with the goods is to be supplied continuously over a period of time, the relevant time for the purpose of establishing conformity of that digital_content or digital_service element should not be one specific moment in time but rather a period of time, starting from the time of delivery.
For reasons of legal certainty, that period of time should be equal to the period during which the seller is liable for a lack of conformity.
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(39) Goods with digital elements should be deemed to have been delivered to the consumer when both the physical component of the goods has been delivered and the single act of supply of the digital_content or digital_service has been performed or the continuous supply of the digital_content or digital_service over a period of time has begun.
This means that the seller should also make the digital_content or digital_service available or accessible to the consumer in such a way that the digital_content or digital_service, or any means suitable for downloading or accessing it, has reached the sphere of the consumer and no further action is required by the seller in order to enable the consumer to use the digital_content or digital_service in accordance with the contract, for example by providing a link or a download option.
Therefore, the relevant moment for establishing conformity should be the time when the digital_content or digital_service is supplied, if the physical component was delivered earlier.
As a result, it can be ensured that there is a uniform starting point for the liability period for the physical component, on the one hand, and for the digital element on the other hand.
Moreover, in many cases the consumer is unable to notice a defect in the physical component before the digital_content or digital_service is supplied.
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(42) For reasons of coherence with the existing national legal systems, Member States should be free to provide either that sellers are liable for a lack of conformity that becomes apparent within a specific period of time, possibly coupled with a limitation period, or that consumers' remedies are only subject to a limitation period.
In the former case, Member States should ensure that the period for the seller's liability is not circumvented by the limitation period for the consumer's remedies.
While this Directive should, therefore, not harmonise the starting point of national limitation periods, it should ensure that such limitation periods do not curtail the consumers' right to exercise their remedies for any lack of conformity which becomes apparent in the period during which the seller is liable for a lack of conformity.
In the latter case, Member States should be able to maintain or introduce only a limitation period for the consumer's remedies, without introducing a specific period within which the lack of conformity has to become apparent in order for the seller to be liable.
In order to ensure that consumers are equally protected also in such cases, Member States should ensure that where only a limitation period applies, it should still allow consumers to exercise the remedies for any lack of conformity that becomes apparent at least during the period of time provided for in this Directive as a liability period.
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(45) For a period of one year, or for a period of two years if Member States choose to apply a two-year period, the consumer should only need to prove that the good is not in conformity, without also needing to prove that the lack of conformity actually existed at the relevant time for establishing conformity.
In order to rebut the consumer's claim, the seller would need to prove that the lack of conformity did not exist at that time.
In addition, in some cases the presumption that the lack of conformity existed at the relevant time for establishing conformity could be incompatible with the nature of the goods or the nature of the lack of conformity.
The former could be the case with goods that by nature deteriorate, such as perishable products, for example flowers, or goods which are only intended for a single use.
An example of the latter would be a lack of conformity, which can only be a result of an action by the consumer or of an evident external cause which occurred after the goods were delivered to the consumer.
In the case of goods with digital elements where the contract provides for continuous supply of the digital_content or digital_service, the consumer should not have to prove that the digital_content or digital_service was not in conformity during the respective period of time for establishing conformity.
In order to rebut the consumer's claim, the seller would need to prove that the digital_content or digital_service was in conformity during that period.
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(52) In certain situations, it could be justified that the consumer should be entitled to have the price reduced or the contract terminated immediately.
Where the seller has taken action to bring the goods into conformity but a lack of conformity becomes apparent subsequently, it should be objectively determined whether the consumer should accept further attempts by the seller to bring the goods into conformity, taking into account all the circumstances of the case, such as the type and the value of the goods, and the nature and the significance of the lack of conformity.
In particular, for expensive or complex goods it could be justified to allow the seller another attempt to remedy the lack of conformity.
It should also be taken into account whether the consumer can be expected to maintain confidence in the ability of the seller to bring the goods into conformity or not, for instance, due to the same problem appearing twice.
Similarly, in certain situations, the lack of conformity could be of such a serious nature that the consumer cannot maintain confidence in the ability of the seller to bring the goods into conformity, such as where the lack of conformity severely affects the ability of the consumer to make normal use of the goods and the consumer cannot be expected to trust that repair or replacement by the seller would remedy the problem.
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(58) In order to make the right to terminate effective for consumers, in situations where the consumer acquires multiple goods and the lack of conformity only affects some of the goods delivered under the contract, the consumer should have the right to terminate the contract also in relation to the other goods acquired together with the non-conforming goods, even if those other goods are in conformity, if the consumer cannot reasonably be expected to accept to keep only the conforming goods.
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(60) This Directive should not affect the freedom of Member States to regulate the consequences of termination other than those provided for in this Directive, such as the consequences of the decrease of the value of the goods or of their destruction or loss.
Member States should also be allowed to regulate the modalities for reimbursement of the price to the consumer, for example the modalities concerning the means to be used for such reimbursement or concerning possible costs and fees incurred as a result of the reimbursement.
Member States should, for instance, also have the freedom to provide for certain time limits for the reimbursement of the price or for the return of the goods.
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(61) The principle of the seller's liability for damages is an essential element of sales_contracts.
Consumers should, therefore, be entitled to claim compensation for any detriment caused by an infringement by the seller of this Directive, including for damage suffered as a consequence of a lack of conformity.
Such compensation should put the consumer as much as possible into the position in which the consumer would have been had the goods been in conformity.
As the existence of such a right to damages is already ensured in all Member States, this Directive should be without prejudice to national rules on the compensation of consumers for harm resulting from infringement of those rules.
Member States should also remain free to regulate consumers' entitlement to compensation for situations in which the repair or replacement caused significant inconvenience or was delayed.
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(63) Considering that the seller is liable towards the consumer for any lack of conformity of the goods resulting from an act or omission of the seller or a third party, the seller should be able to pursue remedies against the person responsible in previous links of the chain of transactions.
Such remedies should include those for a lack of conformity which results from the omission of an update, including a security update, which would have been necessary to keep the good with digital elements in conformity.
However, this Directive should not affect the principle of freedom of contract between the seller and other parties in the chain of transactions.
The details for exercising that right, in particular against whom and how such remedies are to be pursued and whether the remedies are of a mandatory nature, should be provided by the Member States.
The question as to whether the consumer can also raise a claim directly against a person in previous links of the chain of transactions should not be regulated by this Directive, except in cases where a producer offers the consumer a commercial_guarantee for the goods.
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(71) It is appropriate for the Commission to review the application of this Directive five years after its entry into force, including in particular the provisions regarding remedies, the burden of proof – also with respect to second-hand goods as well as goods sold at public_auctions – and the producer's commercial_guarantee of durability.
The Commission should also assess whether the application of this Directive and of Directive (EU) 2019/770 ensures a consistent and coherent legal framework with regard to the supply of digital_content or digital_services and goods with digital elements.
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