(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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(5) Technological evolution has led to a growing market for goods that incorporate or are inter-connected with digital_content or digital_services.
Due to the increasing number of such devices and their rapidly growing uptake by consumers, action at Union level is needed in order to ensure that there is a high level of consumer protection and to increase legal certainty as regards the rules applicable to contracts for the sale of such products.
Increasing legal certainty would help to reinforce the trust of consumers and sellers.
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(6) Union rules applicable to the sales of goods are still fragmented, although rules on delivery conditions and, as regards distance or off-premises contracts, pre-contractual information requirements and the right of withdrawal have already been fully harmonised by Directive 2011/83/EU of the European Parliament and of the Council (3).
Other key contractual elements, such as the conformity criteria, the remedies for a lack of conformity with the contract and the main modalities for their exercise, are currently subject to minimum harmonisation under Directive 1999/44/EC of the European Parliament and of the Council (4).
Member States have been allowed to go beyond the Union standards and introduce or maintain rules that ensure that an even higher level of consumer protection is achieved.
In doing so, they have acted on different elements and to different extents.
Thus, national provisions transposing Directive 1999/44/EC significantly diverge today on essential elements, such as the absence or existence of a hierarchy of remedies.
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(7) Existing disparities can adversely affect businesses and consumers.
Pursuant to Regulation (EC) No 593/2008 of the European Parliament and of the Council (5), businesses directing their activities to consumers in other Member States are required to take account of the mandatory consumer contract law rules of the consumer's country of habitual residence.
As those rules differ among Member States, businesses can be faced with additional costs.
Consequently, many businesses might prefer to continue trading domestically or only export to one or two Member States.
That choice of minimising exposure to costs and risks associated with cross-border trade results in lost opportunities for commercial expansion and economies of scale.
SMEs in particular, are affected.
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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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(10) This Directive should cover rules applicable to the sales of goods, including goods with digital elements, only in relation to key contract elements needed to overcome contract-law related barriers in the internal market.
For this purpose, rules on requirements for conformity, remedies available to consumers for a lack of conformity of the goods with the contract and on the main modalities for their exercise should be fully harmonised, and the level of consumer protection, as compared to Directive 1999/44/EC, should be increased.
Fully harmonised rules on some essential elements of consumer contract law would make it easier for businesses, especially SMEs, to offer their products in other Member States.
Consumers would benefit from a high level of consumer protection and welfare gains by fully harmonising key rules.
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(11) This Directive complements Directive 2011/83/EU.
While Directive 2011/83/EU mainly lays down provisions regarding pre-contractual information requirements, the right of withdrawal from distance and off-premises contracts and rules on delivery and passing of risk, this Directive introduces rules on conformity of the goods, remedies in the event of a lack of conformity and modalities for their exercise.
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(13) This Directive and Directive (EU) 2019/770 of the European Parliament and of the Council (6) should complement each other.
While Directive (EU) 2019/770 lays down rules on certain requirements concerning contracts for the supply of digital_content or digital_services, this Directive lays down rules on certain requirements concerning contracts for the sale of goods.
Accordingly, in order to meet the expectations of consumers and ensure a clear-cut and simple legal framework for traders of digital_content or digital_services, Directive (EU) 2019/770 applies to the supply of digital_content or digital_services, including digital_content supplied on a tangible medium, such as DVDs, CDs, USB sticks and memory cards, as well as to the tangible medium itself, provided that the tangible medium serves exclusively as a carrier of the digital_content.
In contrast, this Directive should apply to contracts for the sale of goods, including goods with digital elements which require digital_content or a digital_service in order to perform their functions.
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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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(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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(24) In order to balance the need for legal certainty with an appropriate flexibility of the legal rules, any reference in this Directive to what can be expected from or by a person should be understood as a reference to what can reasonably be expected.
The standard of reasonableness should be objectively ascertained, having regard to the nature and purpose of the contract, the circumstances of the case and to the usages and practices of the parties involved.
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(25) In order to provide clarity as to what a consumer can expect from the goods and what the seller would be liable for in the event of failure to deliver what is expected, it is essential to fully harmonise rules for determining whether goods are in conformity.
Any reference to conformity in this Directive should refer to conformity of the goods with the sales_contract.
In order to safeguard the legitimate interests of both parties to a sales_contract, conformity should be assessed based on both subjective and objective requirements for conformity.
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(36) In order to ensure that there is sufficient flexibility in the rules, for instance in relation to the sale of second-hand goods, it should be possible for the parties to deviate from the objective requirements for conformity provided for in this Directive.
Such a deviation should only be possible if the consumer was specifically informed about it and if the consumer accepts it separately from other statements or agreements, and by way of active and unequivocal conduct.
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(38) This Directive should not regulate the meaning of ‘delivery’, which should be left to national law, in particular, as regards the question of what the seller has to do in order to fulfil the seller's obligation to deliver the goods.
Furthermore, references to the time of delivery in this Directive should be without prejudice to the rules on the passing of risk provided for in Directive 2011/83/EU and accordingly implemented in the law of the Member States.
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(59) Where the consumer terminates the contract due to the lack of conformity, this Directive should prescribe rules only on the main effects of and modalities for the right of termination, in particular the obligation for the parties to return what they have received.
Thus, the seller should be obliged to refund the price received from the consumer and the consumer should return 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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(62) In order to ensure that there is transparency, certain requirements as regards commercial_guarantees should be provided, alongside the pre-contractual information requirements on the existence and conditions of commercial_guarantees set out in Directive 2011/83/EU.
Moreover, in order to improve legal certainty and to avoid consumers being misled, this Directive should provide that, where commercial_guarantee conditions contained in associated advertisements are more favourable to the consumer than those included in the guarantee statement, the more advantageous conditions should prevail.
Finally, this Directive should provide rules on the content of the guarantee statement and on the way it should be made available to consumers.
For instance, the guarantee statement should include the terms of the commercial_guarantee and state that the legal guarantee of conformity is unaffected by the commercial_guarantee, making it clear that the commercial_guarantee terms constitute an undertaking that is additional to the legal guarantee of conformity.
Member States should be free to lay down rules on other aspects of commercial_guarantees not covered by this Directive, for example on associating debtors other than the guarantor with the commercial_guarantee, provided that those rules do not deprive consumers of the protection afforded to them by the fully harmonised provisions of this Directive on commercial_guarantees.
While Member States should remain free to require that commercial_guarantees be provided free_of_charge, they should ensure that any undertaking by the seller or the producer which falls under the definition of commercial_guarantees as set out in this Directive complies with the harmonised rules of this Directive.
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(65) Nothing in this Directive should prejudice the application of rules of private international law, in particular Regulation (EC) No 593/2008 and Regulation (EU) No 1215/2012 of the European Parliament and of the Council (7).
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