European Consumer Law

What is best for consumers?

Basic tenet of the EU: Liberal market economy
Supply side: profit maximising producers
Demand side: Homo economicus (rational market players, utility-maximising
consumers)
Perfectly competitive market
Medium of exchange: Contracts => freedom of contract
Result: best possible equilibrium price => social welfare
Major motivation for establishing a common market for goods and services, art. 27
More choice = more competition
lower prices
Higher quality products and services

Prohibition of quantitative restrictions between MS

Art. 34 TFEU
Quantitative restrictions on imports and all measures having equivalent effect
shall be prohibited between MS
art. 35 TFEU
quantitative restrictions on exports and all measures having equivalent effect, shall
be prohibited between MS
art. 36 TFEU
The provisions of Articles 34 and 35 shall not preclude prohibitions or restrictions
on imports, exports or goods in transit justified on grounds of public morality,
public policy or public security; the protection of health and life of humans,
animals or plants; the protection of national treasures possessing artistic,
historic or archaeological value; or the protection of industrial and commercial
property. Such prohibitions or restrictions shall not, however, constitute a
means of arbitrary discrimination or a disguised restriction on trade between
Member States. (Remember Cassis de Dijon that regulates on what grounds
this can happen)

Market failures
On supply side
Anticompetitive agreements/abuse of dominant position
Distortion of competition
Protecting competition, art. 101-109
On demand side
 Information asymmetries: information is limited and distributed unequally, and
acquisition of information is costly
Remedy: If we give information, a perfectly rational consumer will act
accordingly
But what if the rational consumer is a myth?
Bounded rationality problem
Cognitive psychology has shown that humans are far more irrational and impulsive and
are led by subjective opinions or fears:
Despite information we tend to take wrong decisions
We decide by using heuristics, and are biased
Unrealistic optimism
myopia and self control problems
Cumulative cost neglect
Status quo bias
we think that status quo is always the better choice. We consider
the transaction cost to switch to high.
Behavioural economics theory shows the limits of efficiency-based theories

Regulatory techniques to protect consumers

Pre-contractual phase: information disclosure
Compensating information asymmetry
Controlling information: advertisement/commercial practices
After contract conclusion: right to withdraw - compensating:
Information assymetries (e.g. distance contracts)
two weeks right to withdraw
Exogenously distorted preferences (e.g. doorstep contracts)
Påverkan från utsidan, dörr till dörrförsäljare kan pressa en konsument till
köp av en specific product. Kunden har inte möjlighet till jämförelse
och all information vid tidpunkten för köpet.
Endogenously distorted preferences (e.g. credit contracts)

Corrective intervention into contract terms

Mandatory rules for contracts => no freedom of contract (e.g. unfair contract
terms)
Judge has discretion to annul provisions in contracts
Strengthening enforcement:
Representative actions to protect collective interests
Effective, dissuasive penalties and redress possibilities

Development of the EU consumer protection law

There are no special provision in the founding treaties
 Harmonisation of national consumer laws has been conducted in the name of promoting
the establishment and functioning of a EU unified trading space
Justification: variation between national laws was presented as an impediment to market
integration, prompting a need for harmonisation at community level - common rules
for a common market

In 1992 the Maastricht treaty introduced a separate chapter on consumer protection, today
art. 169 TFEU
Consumer protection became an explicit EU competence

In order to promote the interests of consumers and to ensure a high level of

consumer protection, the Union shall contribute to protecting the health, safety
and economic interests of consumers, as well as to promoting their right to
information, education and to organise themselves in order to safeguard their
interests.
However, the competence to legislate remained, art. 114 TFEU
It is still related to the functioning of the internal market

The European Parliament and the Council shall, acting in accordance with the
ordinary legislative procedure and after consulting the Economic and Social
Committee, adopt the measures for the approximation of the provisions laid
down by law, regulation or administrative action in Member States which have
as their object the establishment and functioning of the internal market
Evaluation of the Consumer Acquis
Piecemeal approach due to limited competence of the EU
Some problems visibly tied to transnational commercial practice (time-share; package
tour: distance selling)

Some problems with no demonstrative cross border dimension (door-step selling)

One possible idea would be to go a step further and to create a common European code of
obligations.
From specific consumer law to general contract law
Principles of European Contract Law (PECR)
Draft common frame of reference (DCFR)
Proposal for a regulation of the European parliament and of the council on a common
European sales law (CESL), Brussels, 11.10.2011, COM (2011) 635 Final.
See also: Principles of international commercial contracts (PICC)

Terminology: Consumer
Art. 2.2 of directive 2019/771 on sales contract
 Consumer means any natural person who, in contracts covered by this directive, is
acting for purposes which are outside his trade. business, craft or profession;
Art. 3.1 directive 2020/1828 on representative actions:
Consumer means any natural person who acts for purposes which are outside that
person's trade, business, craft or profession.
Joined cases C-541/99 and C-542/99 “Cape Snc v Idealservice Srl (2001)
The purchaser instituted proceedings claiming that the jurisdiction granted in the
sales agreement was unfair
The ECJ held that the the term consumer pursuant to art. 2b directive 93/13/EEC
on unfair terms in consumer contracts, must be interpreted as referring solely
to natural persons

C-269/95, Francesco Benincasa and Dentalkit Srl (1997)

It follows from the foregoing that, in order to determine whether a person has the
capacity of a consumer, a concept which must be strictly construed, reference
must be made to the position of the person concerned in a particular contract,
having regard to the nature and aim of that contract, and not to the subjective
situation of the person concerned. […] the self-same person may be regarded
as a consumer in relation to certain transactions and as an economic operator
in relation to others.

Consequently, only contracts concluded for the purpose of satisfying an

individual’s own needs in terms of private consumption come under the
provisions designed to protect the consumer as the party deemed to be the
weaker party economically. The specific protection sought to be afforded by
those provisions is unwarranted in the case of contracts for the purpose of
trade or professional activity, even if that activity is only planned for the
future, since the fact that an activity is in the nature of a future activity does
not divest it in any way of its trade or professional character

C-497/13, Froukje Faber v Autobedrijf Hazet Ochten BV (2015)

The national court must always determine if the purchaser is a consumer, even if
the purchaser has not relied on the status of a consumer.

Terminology: Trader
art. 2.3 directive 2019/771 on sales contracts:
Seller
‘seller’ means any natural person or any legal person, irrespective of
whether privately or publicly owned, that is acting, including through
any other person acting in that natural or legal person's name or on that
person's behalf, for purposes relating to that person's trade, business,
craft or profession, in relation to contracts covered by this Directive;
art. 3.2
Trader
 ‘trader’ means any natural person, or any legal person irrespective of
whether privately or publicly owned, that acts, including through
another person acting in that person’s name or on that person’s behalf,
for purposes relating to that person’s trade, business, craft or
profession.

Case C-105/17 Evelina Kamenova

a natural person, such as the defendant in the main proceedings, who publishes
simultaneously on a website a number of advertisements offering new and
second-hand goods for sale can be classified as a ‘trader’, and such an activity
can constitute a ‘commercial practice’, only if that person is acting for
purposes relating to his trade, business, craft or profession, this being a matter
for the national court to determine, in the light of all relevant circumstances of
the individual case.
[…] that the mere fact that the sale is intended to generate profit or that a natural
person publishes, simultaneously, on an online platform a number of
advertisements offering new and second-hand goods for sale cannot suffice,
by itself, to classify that person as a ‘trader’ within the meaning of that
provision. It follows that an activity such as that at issue in the main
proceedings cannot be regarded as a ‘commercial practice’ within the meaning
of Article 2(d) of Directive 2005/29.”
Dual purpose contracts
Directive 2011/83/EU on consumer rights/recital 17
The definition of consumer should cover natural persons who are acting
outside their trade, business, craft or profession. However, if the
contract is concluded for purposes partly within and partly outside the
persons trade (dual purpose contracts) and the trade purpose is so
limited as not to be predominant in the overall context of the supply,
that person should also be considered as a consumer.
Cf. C-464/01 Johann Gruber v Bay Wa AG
Sales Law
Relevant directives
1999: Old – Consumer sales directive [1999/44/EC]: in force until 31 December 2021
2019: New – Consumer sales directive [(EU) 2019/771]: in force as of 1 January 2022
MAIN SUBJECT OF THIS CLASS
2019: Directive on contracts for the supply of digital content and digital services [(EU)
2019/770]
CONFER TO COMPARE
Subject matter and purpose, art. 1
The purpose of this directive is:
contribute to the proper functioning of the internal market while providing high
level of consumer protection

This is done by laying down common rules on certain requirements concerning

sales contracts concluded between sellers and consumers
rulers on the conformity of goods with the contract
Remedies in lack of conformity
modalities for the exercise of those remedies
and on commercial guarantees

Only valid in the post-contractual phase = no information duties, no right of

withdrawal

No regulation regarding non-performance or late performance

Only rights of the buyer/consumer, not of the seller
No provisions regarding damages

Definitions, art. 2
Sales contract, art. 2.1
Any contract under which the seller transfer or undertakes to transfer ownership of
goods to a consumer, and the consumer pays or undertakes to pay the price
thereof
Consumer, art. 2.2
consumer’ means any natural person who, in relation to contracts covered by this
Directive, is acting for purposes which are outside that person's trade,
business, craft or profession
Recital 22
MS are free to determine in the case of dual purpose contracts
Seller, art. 2.3
 any natural person or any legal person, irrespective of whether privately or
publicly owned, that is acting, including through any other person acting in
that natural or legal person's name or on that person's behalf, for purposes
relating to that person's trade, business, craft or profession, in relation to
contracts covered by this Directive.
C 149/15, Sabrina Wathelet v Garage Bietheres
“The concept of ‘seller’ […] must be interpreted as covering also a trader
acting as intermediary on behalf of a private individual who has not
duly informed the consumer of the fact that the owner of the goods
sold is a private individual, which it is for the referring court to
determine, taking into account all the circumstances of the case. The
above interpretation does not depend on whether the intermediary is
remunerated for acting as intermediary.
Goods, art. 2.5
any tangible movable items; water, gas and electricity are to be considered as
goods within the meaning of this Directive where they are put up for sale in a
limited volume or a set quantity; (no rights, e.g. licenses, patents and
copyrights; no intangible goods)

any tangible movable items that incorporate or are inter-connected with digital
content or a digital service in such a way that the absence of that digital
content or digital service would prevent the goods from performing their
functions (‘goods with digital elements’)

Digital content
Means data which are produced and supplied in digital form

Digital service
a service that allows the consumer to create, process, store or access data in a
digital form; or

A service that allows the sharing of or any other interaction with data in digital
form uploaded or created by the consumer or other users of service

Scope, art. 3
Art. 3.2: contracts between a consumer and a seller for the supply of goods to be
manufactured or produced shall also be deemed sales contracts for the purpose of this
directive

C-247/16 Heike Schottelius v Falk Seifert

a contract whose subject is the sale of an asset that must first be manufactured or
produced by the seller does fall within the scope of the directive.
 the service for the installation of goods, when associated with the sale, does fall
within the scope of that directive.

Art. 3.3: This directive shall not apply to contracts for the supply of digital content or
digital services. It shall, however,
apply to digital content or digital services which are incorporated or inter-
connected with goods in the meaning of point 5b of art. 2, and

are provided with the goods under the sales contracts, irrespective of whether such
digital content or digital service is supplied by the seller or by a third party

In the event of doubt, the digital content or digital service shall be presumed to be
covered by the sales contract

This directive shall not apply to

any tangible medium which serves exclusively as a carrier for digital content
e.g. buying Windows OS, the OS may be provided through a USB stick,
the stick itself is however not the good purchased, therefore it is not a
transfer of a good.
Recital 13
Directive 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.
Example of digital services subject to Dir. 2019/770
Zoom, google cloud, Onedrive, Netflix, Spotify, social media
platform membership
Problematic: Amazon audible, Microsoft OS
Since they are bought through a tangible medium, USB
stick or so.
This directive shall not apply to:
Any goods sold by way of execution or otherwise by authority of law
Member states may exclude from the scope of this directive contracts for the sale of
Second-hand goods sold at public auction
Second-hand goods are included!
Sales on e.g. e-bay is included
public auction means a method of sale where seller and buyer are
in a physical meeting.
And living animals
Conformity of goods - subjective requirements for conformity, art. 6
In order to conform with the sales contract, the goods shall, in particular, where
applicable,
be of description, type, quantity and quality, and possess the functionality,
compatibility, interoperability and other features, as required by the sales
contract

be fit for any particular purpose for which the consumer requires them and which
the consumer made known to the seller at the latest at the time of the
conclusion of the sales contract, and in respect of which the seller has given
acceptance;

be delivered with all accessories and instructions, including on installation, as

stipulated by the sales contract; and

be supplied with updates as stipulated by the sales contract.

Conformity of goods - objective requirements for conformity, art. 7

In addition to complying with any subjective requirement for conformity, the goods shall
be fit for the purposes for which goods of the same type would normally be used,
taking into account, where applicable, any existing Union and national law,
technical standards or, in the absence of such technical standards, applicable
sector-specific industry codes of conduct

Where applicable, be of quality and correspond to the description of a sample or

model that the seller made available to the consumer before the conclusion of
the contract;

where applicable, be delivered along with such accessories, including packaging,

installation instructions or other instructions, as the consumer may reasonably
expect to receive; and

Be of the quantity and possess the qualities and other features, including in
relation to durability, functionality, compatibility and security normal for
goods of the same type and which the consumer may 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,
including the producer, particularly in advertising or on labelling.

the seller shall not be bound by public statements if the seller shows that
 the seller was not, and could not reasonably have been, aware of the public
statement in question;
by the time of conclusion of the contract, the public statement had been
corrected in the same ways as, or in a way comparable to how, it had been
made; or
the decision to buy the goods could not have been influenced by the public
statement.

In the case of goods with digital elements, the seller shall ensure that the consumer is
informed of and supplied with updates, including security updates, that are necessary
to keep those goods in conformity for the period of time:
that the consumer may reasonably expect given the type and purpose of the
goods and the digital elements, and taking into account the circumstances and
nature of the contract, where the sales contract provides for a single act of
supply of the digital content or digital service; or
indicated in art. 10.2 or 10.5, as applicable, where the sales contract provides
for a continuous supply of the digital content or digital service over a period of
time.

Where the consumer fails to install within a reasonable time updates supplied
pursuant to paragraph 3, the seller shall not be liable for any lack of conformity
resulting solely from the lack of the relevant update, provided that:
the seller informed the consumer about the availability of the update and the
consequences of the failure of the consumer to install it; and
the failure of the consumer to install or the incorrect installation was not due to
shortcomings in the installation instructions provided to the consumer.
there shall be no lack of conformity if, at the time of the conclusion of the sales
contract, the consumer was specifically informed that a particular characteristic of the
goods was deviating from the objective requirements for the conformity laid down in
paragraphs 1 or 3 and the consumer expressly and separately accepted that deviation
when concluding the sales contract.

Conformity of goods - incorrect installation, art. 8

The “IKEA Clause”
any lack of conformity resulting from the incorrect installation of the goods shall
be regarded as lack of conformity of the goods, if:
the installation forms part of the sales contract and was carried out by the
seller or under the seller’s responsibility; or
 the installations, intended to be carried out by the consumer, was done by
the consumer and the incorrect installation was due to shortcomings in
the installation instructions provided by the seller or, in the case of
goods with digital elements, provided by the seller or by the supplier of
the digital content or digital service

Time of conformity, art. 10

Time of conformity: the seller shall be liable to the consumer for any lack of conformity
which exists at the time when the goods were delivered
Rule: when risk passes from seller to buyer
no specific provision in Dir. 2019/771

Consumer rights directive, art. 20: in contracts where the trader dispatches the
goods to the consumer, the risk of loss of or damage to the goods shall pass to
the consumer when he or a third party indicated by the consumer and other
than the carrier has acquired the physical possession of the goods.

Duration of conformity: and lack of conformity that becomes apparent within two years
of that time. Without prejudice to art. 7.3, this paragraph shall also apply to goods
with digital elements
this is not a limitation period, this is left to national law according to paragraph 4.

the duration period cannot be shortened by party agreement

For second-hand goods, shorter periods of a minimum of 1 year is possible.

C-133/16 Christian Ferenschild v JPC Motor SA (2017)

must be interpreted as precluding a rule of a MS which allows the
limitation period for action to be shorter than two years from
the time of delivery of the goods.

Burden of proof, art. 11

Any lack of conformity which becomes apparent within one year of the time when the
goods were delivered shall be presumed to have existed at the time when the goods
were delivered, unless proved otherwise.
This relaxation of the burden of proof for the consumer is motivated because it is
far easier for the professional to prove that the deficiency did not exist at the
time of delivery than for the consumer to prove that the deficiency did exist
before delivery.
See C-497/13, Froukje Faber v Autobedrijf Hazet Ochten BV 2015.
MS can extend this period to the full 2 years.
Obligation to notify, art. 12
MS may impose restrictions that the consumer must inform the seller of any deficiency
within 2 months of detecting such lack of conformity.

Remedies for lack of conformity, art. 13

Consumer shall have the right to:
Have the goods brought into conformity
Consumer may choose between repair or replacement of the faulty
product, unless this compared to the other remedies impose
disproportionate costs for the seller.

Receive proportionate reduction in the price

Terminate the contract

Withhold payment of any outstanding part of the price until the seller has fulfilled
its obligations under this directive.

Pursuant to art. 14, repairs or replacements shall be carried out

free of charge,

Within a reasonable time from the moment the seller was informed of the
conformity,

Without any significant inconvenience to the consumer.

The seller shall take back the replaced goods at the seller’s expense
C-52/18 Christian Fülla v Toolport GmbH 2019

Obligation to repair or replace included the installation of replacement foods or

bearing the costs of removal and installation.
C-65/09 Gebr. Weber 2011
The consumer shall not be held liable to pay for normal use made of the replaced
goods during the period prior to the replacement.
C-404/06 Quelle AG v Bundesverband.

Prerequisites of price reduction and termination, art. 13

Consumer is entitled to price reduction (art. 15) or termination of sales contract (art. 16)
if:
the seller has not completed repair or replacement in accordance with art. 14.2 and
3 or otherwise refused to bring the goods in conformity according to art. 3
 A lack of conformity appears despite the seller having attempted to bring the
goods into conformity

The lack of conformity is of such a serious nature as to justify an immediate price

reduction or termination of the sales contract.

The seller has declared, or it is otherwise clear, that they will not bring the goods
into conformity within a reasonable time or without significant inconvenience
for the consumer.

Price reduction and termination are secondary rights to the primary right of repair or
replacement.

Price reduction, art. 15

The price reduction shall be proportionate to the decrease in the value which were
received by the consumer compared to the value the goods would have if they were in
conformity
C 32/12 Soledad Duarte Hueros v. Autociba SA et al. 2013.
The national courts must be allowed to grant of its own motion an
appropriate reduction

Termination, art. 16
Additional prerequisite: the consumer shall not be entitled to termination of contract if the
lack of conformity is only minor.
Seller has burden of proof that it is only minor, see art. 13.5

Declaration: The consumer must declare that he wants to terminate the contract by means
of a statement to the seller.

Partial non-conformity: If the lack of conformity is only for some of the goods delivered
under the sales contract, the right to termination under art. 13 is only in relation to the
faulty goods. The conforming goods are not subject to the termination.

When the consumer terminates sales contract as a whole or in parts

the consumer shall return the goods to the seller at the seller’s expense; and
the seller shall reimburse to the consumer the price paid for the goods upon receipt
of the goods or of evidence provided by the consumer of having sent back the
goods.
MS may determine modalities for return and reimbursement.

Commercial guarantees, art. 17

Principles:
guarantees are voluntary
 they are mostly offered by the seller and/or producer

If offered they have to conform to the requirements of this article

Any commercial guarantee shall be binding on the guarantor under the conditions laid
down in the commercial guarantee statement and associated advertising available at
the time, or before the conclusions, of the contract.

Where a producer offers to the consumer a commercial guarantee of durability for certain
goods for a certain period of time, the producer shall be liable directly to the
consumer, during the entire period of the commercial guarantee of durability for
repair or replacement of the goods according to art. 14

The commercial guarantee statement shall be provided to the consumer on a durable

medium at the latest at the time of the delivery of the goods. The commercial
guarantee statement shall be expressed in plain, intelligible language. It shall include
the following:
a clear statement that the consumer is entitled by law to remedies from the seller
free of charge in the event of a lack of conformity of the goods and that those
remedies are not affected by the commercial guarantee;

the name and address of the guarantor;

the procedure to be followed by the consumer to obtain the implementation of the

commercial guarantee;

the designation of the goods to which the commercial guarantee applies; and

the terms of the commercial guarantee

Mandatory nature, art. 21

Unless otherwise provided for in this Directive, any contractual agreement which, to the
detriment of the consumer, excludes the application of national measures transposing
this Directive, derogates from them, or varies their effect, before the lack of
conformity of the goods is brought to the seller's attention by the consumer, shall not
be binding on the consumer.
Product Liability
Relevant directives
Council directive 85/374/EEC of 25 July 1985 on the approximation of the laws,
regulations and administrative provisions of the Member States concerning liability
for defective products
Purpose – Recitals
“[...] approximation of the laws of the Member States concerning the liability of the
producer for damage caused by the defectiveness of his products is necessary because
the existing divergences may distort competition and affect the movement of goods
within the common market and entail a differing degree of protection of the consumer
against damage caused by a defective product to his health or property;
Whereas liability without fault on the part of the producer is the sole means of adequately
solving the problem, peculiar to our age of increasing technicality, of a fair
apportionment of the risks inherent in modern technological production;”
Product Liability – strict liability?
Art. 1: “the producer shall be liable for damage caused by a defect in his product.”
Strict liability vs. fault-based liability vs. qualified liability?
Producer has the state of the art / development risk defence, art. 7e
Allocation of liability is a policy decision (insurance factor vs allocation of risk)

Economic arguments for strict liability

Risk spreading
Producer is in the best situation to anticipate the risk
Producer is in the best situation to cover cost of risk through insurance
Producer is in the best situation to allocate cost of risk back to the consumer via
pricing of goods and services
Cheapest cost avoider principle
Activity generates losses => society wants to reduce the size of those losses in the
cheapest possible way
cheapest cost avoider: the party who could have most cheaply taken precautions
against the loss
An incentive to take precautions, while minimising the cost of those precautions.

Product, art. 2
Product: for purposes of this directive, “product” means all movables even if incorporated
into another movable or into an immovable
product included electricity
Finished product / component product / raw material
 Problem with the product definition today: digital content and services / artificial
intelligence.
C-65-20 VI v Krone – Verlag Gesselschaft mbH & Co KG, 2021
Article 2 of Council Directive 85/374/EEC of 25 July 1985 [...], must be
interpreted as meaning that a copy of a printed newspaper that, concerning
paramedical matters, gives inaccurate health advice relating to the use of a
plant which, when followed, has proved injurious to the health of a reader of
that newspaper, does not constitute a ‘defective product’ within the meaning
of those provisions.
C-691/21 Capfi SA, Aviva assurances SA v Enedis SA
Art. 3.1 of the directive must be interpreted as meaning that an electricity
distribution system operator must be regarded as a producer when it changes
the voltage lebel of electricity with a view to distribute it to the final customer

Producer, art. 3
Producer means the manufacturer of a finished product, the producer of any raw material
or the manufacturer of a component part and any person who, by putting his name,
trade mark or other distinguishing feature on the product presents himself as its
producer.

Without prejudice to the liability of the producer, any person who imports into the
community a product for sale, hire, leasing or any form of distribution in the course of
his business shall be deemed to be a producer within the meaning of this Directive
and shall be responsible as a producer.

Where the producer of the product cannot be identified, each supplier of the product shall
be treated as its producer. Unless he informs the injured person, within a reasonable
time of the actual producer. The same shall apply to importers.

What about Amazon market place?

Distributors are usually not regarded as producers, see however:
Oberdorf v. Amazon.com Inc, 3rd circuit court of appeals.
Bolger v Amazon.com, LLC.
C-691/21 Capfi SA, Aviva assurances SA v Enedis SA 2022
Article 3(1) of Council Directive 85/374/EEC of 25 July 1985 [...] must be
interpreted as meaning that an electricity distribution system operator must be
regarded as a ‘producer’, within the meaning of that provision, where it
changes the voltage level of electricity with a view to its distribution to the
final customer.
C-495/10, Centre hospitalier universitaire de Besançon v Thomas Dutreaux
The hospital used heated mattresses to keep patients warm during surgery, the
mattress used was old and overheated, causing burn wounds on the patient.
 Patient wanted liability from hospital for the damages. Court ruled that the
hospital was not a producer since they only used the product, not altering it in
any way. The claim was therefore unfounded within the limits of product
liability.

Defectiveness, art. 6
A product is defective when it does not provide the safety which a person is entitled to
expect (“justified consumer expectations paradigm), taking all circumstances into
account, including
the presentation of the product;

the use to which it could reasonably be expected that the product would be put;

the time when the product was put into circulation.

A product shall not be considered defective for the sole reason that a better product is
subsequently put into circulation.

Type of defects:
manufacturing defects
design defects
insufficient warnings (A.K.A instruction defects)

Burden of proof, art. 4

The injured person shall be required to prove the
damage
defect
the casual relationship between defect and damage.
“res ipsa luqitur” doctrine: If, under the circumstances of the case, common sense
strongly suggests that things were as the plaintiff says, the court may presume that
they were so even if the plaintiff cannot really prove it.

Cases C-503/13 and C-504/13, Boston Scientific v. AOK and Betriebskrankenkasse

RWE, 05.03.2015
The Directive must be interpreted that where it is found that products belonging to
the same group or forming part of the same production series, such as
pacemakers and implantable cardioverter defibrillators, have a potential
defect, such a product may be classified as defective without there being any
need to establish that that product has such a defect.
C-621/15, N.W et al. v. Sanofi Pasteur MSD SNC et al., 21.06.2017
The Directive must be interpreted as not precluding national evidentiary rules
such as those at issue in the main proceedings under which, when a court
 ruling on the merits of an action involving the liability of the producer of a
vaccine due to an alleged defect in that vaccine, in the exercise of its exclusive
jurisdiction to appraise the facts, may consider that, notwithstanding the
finding that medical research neither establishes nor rules out the existence of
a link between the administering of the vaccine and the occurrence of the
victim’s disease, certain factual evidence relied on by the applicant constitutes
serious, specific and consistent evidence enabling it to conclude that there is a
defect in the vaccine and that there is a causal link between that defect and that
disease. National courts must, however, ensure that their specific application
of those evidentiary rules does not result in the burden of proof introduced by
Article 4 being disregarded or the effectiveness of the system of liability
introduced by that directive being undermined.

Exonerating Circumstances, art. 7

The producer shall not be held liable as a result of this Directive if he proves:
that he did not put the product into circulation; or

that, having regard to the circumstances, it is probable that the defect which
caused the damage did not exist at the time when the product was put into
circulation by him or that this defect came into being afterwards;

that the product was neither manufactured by him for sale or any form of
distribution for economic purposes nor manufactured or distributed by him in
the course of his business; or

that the defect is due to compliance of the product with mandatory regulations
issued by the public authorities; or

that the state of scientific and technical knowledge at the time when he put the
product into circulation was not such as to enable the existence of the defect to
be discovered (development risk defence); or

in the case of a manufacturer of a component, the defect is attributable to the

design of the product in which the component has been fitted or to the
instructions given by the manufacturer.

Joint liability, art. 5

Where, as a result of the provisions of this Directive, two or more persons are liable for
the same damage, they shall be held liable jointly and severally, without prejudice to
the provisions of national law concerning the rights of contribution or recourse.
Damage, art. 9
For the purpose of art. 1, “damage” means:
damage caused by death or by personal injuries;

damage to, or destruction of, any item of property other than the defective product
itself, with a lower threshold of 500 EUR, provided that the item of property:
is of a type ordinarily intended for private use or consumption, and
was used by the injured person mainly for his own private use or
consumption
This article shall be without prejudice to national provisions relating to non-
material damage.

Cases C-503/13 and C-504/13, Boston Scientific v AOK and Betriebskrankenkasse RWE,
05.03.2015
Art. 1 and art. 9.1(a) are to be interpreted as meaning that the damage caused by a
surgical operation for the replacement of a defective product, such as a
pacemaker or an implantable cardioverter defibrillator, constitutes ‘damage
caused by death or personal injuries’ for which the producer is liable, if such
an operation is necessary to overcome the defect in the product in question. It
is for the national court to verify whether that condition is satisfied in the main
proceedings.

Reduction of liability and contributory negligence, art. 8

Without prejudice to the provisions of national law concerning the right of contribution or
recourse, the liability of the producer shall not be reduced when th damage is caused
both by a defect in product and by the act or omission fo a third party.
The liability of the producer may be reduced or disallowed when, having regard to all the
circumstances, the damage is caused both by a defect in the product and by the fault
of the injured person or any person for whom the injured person is responsible.

Limitation and expiry period, art. 10-11

MS shall provide in their legislation that a limitation period of 3 years shall apply to
proceedings for the recovery of damages as provided for in this Directive. The
limitation period shall begin to run from the day on which the plaintiff became aware,
or should reasonably have become aware, of the damage, the defect and the identity of
the producer.

Member States shall provide in their legislation that the rights conferred upon the injured
person pursuant to this Directive shall be extinguished upon the expiry of a period of
10 years from the date on which the producer put into circulation the actual product
which caused the damage, unless the injured person has in the meantime instituted
proceedings against the producer.
Limitation of liability, art. 12
The liability of the producer arising from this Directive may not, in relation to the injured
person, be limited or excluded by a provision limiting his liability or exempting him
from liability.
Unfair Contract Terms
Relevant Directive
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contract
Purpose
Art. 1: The purpose of this Directive is to approximate the laws, regulation and
administrative provisions of the Member States relating to unfair terms in contracts
concluded between a seller or supplier and a consumer

Recital 6: in order to facilitate the establishment of the internal market and to safeguard
the citizen in his role as a consumer when acquiring goods and services under
contracts

Case C-147/16 Karel de Grote, para 54: “[...] the idea [...] that the consumer is in a weak
position vis-à-vis the seller or supplier, as regards both his bargaining power and his
level of knowledge, which leads to the consumer agreeing to terms drawn up in
advance by the seller or supplier without being able to influence the content of those
terms[...].”

Economic arguments for protecting against standard terms

Market failure: competition does not function in the realm of contract terms
information problem: consumer cannot understand which terms are more
favourable.

Transaction costs are too high: consumer cannot hire a lawyer to understand and
bargain the terms (rational ignorance)

Contract terms have no signalling function like quality or price

Result of the market failure: everybody uses the worst terms = race to the bottom
All risks involved with the contract are transferred to the consumer
Inefficient contracts

Scope of application
A contractual term which has not been individually negotiated shall be regarded as unfair
if, see art. 3.1

A term shall always be regarded as not individually negotiated when it has been drafted in
advance and the consumer has not been able to influence the contract terms,
especially in the context of pre-formulated standard contract, art. 3.2
 The fact that certain aspects of a term or one specific term have been individually
negotiated shall not exclude the application of this article to the rest of a contract if an
overall assessment of the contract indicates that it is nevertheless a pre-formulated
standard contract, art. 3.3

Where any seller or supplier claims that a standard term has been individually negotiated,
the burden of proof in this respect shall be incumbent on him, art. 3.4

Unimportant factors
If the contract was concluded in written or verbal form.
In case of written contract conclusion, if the terms are contained in one or more
documents
Whether these terms are used by traders, businesses or professions of a public
nature

Unfairness according to Directive 93/13 (Art. 3-4)

Art. 3(1): A contractual term which has not been individually negotiated shall be regarded
as unfair if, (1) contrary to the requirement of good faith, it causes a (2) significant
imbalance in the parties' rights and obligations arising under the contract, (3) to the
detriment of the consumer.

Art. 4(1): Without prejudice to Article 7, the unfairness of a contractual term shall be
assessed, taking into account the nature of the goods or services for which the contract
was concluded and by referring, at the time of conclusion of the contract, to all the
circumstances attending the conclusion of the contract and to all the other terms of the
contract or of another contract on which it is dependent.

The Annex of the Directive contains and indicative, non exhaustive, list of terms which
may be regarded as unfair, art. 3.3 (svarta listan)

Case C-226/12, Constructora Principado

para 21: “In that regard, the Court has held that in order to ascertain whether a
term causes a “significant imbalance” in the parties' rights and obligations
under a contract to the detriment of the consumer, particular account must be
taken of which rules of national law would apply in the absence of an
agreement by the parties in that regard. Such a comparative analysis will
enable the national court to evaluate whether and, as the case may be, to what
extent, the contract places the consumer in a legal situation less favourable
than that provided for by the national law in force
Unfairness and Price, art. 4.2
Assessment of the unfair nature of the terms shall relate neither to the definition of the
main subject matter of the contract nor to the adequacy of the price and remuneration,
on the one hand, as against the services or goods supplies in exchange, on the other, in
so far as these terms are in plain intelligible language (Art 4, 2).

The main principle is to not regulate the terms regarding price because the price is subject
to competition whereas the standard contract terms are not.

Plain and intelligible language, art. 5

Art. 5: Securing transparency
All written terms offered to the consumer must be drafted in plain, intelligible
language.
In order to ensure competition.
See Case C-421/14 Banco Primus, p. 67
If the court finds that a term is not in plain intelligible language
according to art. 4.2 it must be examined if it is unfair according to art.
3.1

Mandatory Nature, art. 6

Art. 6: unfair terms used in a contract concluded with a consumer by a seller or supplier
shall not be binding on the consumer and that the contract shall continue to bind the
parties upon those terms if it is capable of continuing in existence without the unfair
terms.
Cases C-154/15, C-307/15 and C-308/15 Naranjo Gutierrez, p. 54 & 60
Article 6 thereof must be regarded as a provision of equal standing to national
rules which rank, within the domestic legal system, as rules of public policy
[…]. It must be held that that classification extends to all the provisions of the
directive which are essential for the purpose of attaining the objective pursued
by Article 6 thereof.”
C-473/00 Cofidis para 38
The Directive precludes national provisions that prohibits the national courts
from finding a contract term unfair of its own motion.