Implied Terms II

Additional EU Rights in Consumer Sales

The Consumer Sales Regulations (European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003) put the 1999 EU Consumer Sales Directive into effect in Irish law.  Accordingly, they provide a common minimum standard through Europe.  They supplement the existing Sale of Goods and the Unfair Terms in Consumer Contracts legislation.   Consumers may invoke remedies under any of them.

The provisions of the regulations are mandatory and cannot be varied by a contract.  In this regard, they are similar to the consumer provisions in the Sale of Goods Act.  Contractual terms concluded with the seller before the lack of conformity of the goods is brought to the seller’s attention, which directly or indirectly waives and restrict rights under the regulations, do not bind a consumer.

The 2013 EU derived Consumer Regulations amend certain aspects of the Sale of Goods Act in consumer cases. They make mandatory provision for the passing of the risk and delivery in consumer cases. They also make further provision for unsolicited goods.


Consumer

A consumer in this context is a natural person acting outside of its business. A service includes any services including digital content, water, gas and electricity not put up for sale in a fixed volume or said quantity and district heating.

A trader is a natural person or legal person acting, for purposes related to his trade, business, craft or profession and includes any person acting in the trader’s name. Unsolicited in the context of goods or services provided to a consumer means that they are supplied are provided without any request by or on behalf of the consumer


Scope of Additional Rights

The Regulations apply to a sale of consumer goods between a seller and consumer.  A seller is any corporate or natural person, who sells consumer goods in the course of a trade, business or profession.  A consumer is a natural person, who as regards a sale or associated guarantee, is acting for purposes which are outside his trade, business or profession.

A contract for the supply of consumer goods to be manufactured or produced is a sale of goods under the Regulations. Lack of conformity which arises due to the incorrect installation of consumer goods is deemed lack of conformity of the goods if they are installed in the course of or as part of the contract for the sale of the goods by the seller or by a person under the seller’s responsibility.  This is also the case if the installation by the consumer is incorrect or is defective due to errors in the installation instructions.


Requirement for Conformity

The goods delivered to the consumer under the contract must be in conformity with the contract.  They are presumed to be in conformity with the sale contract if:

  • they comply with the description(s) given by the seller and possess the quality of goods which the seller has held out to the consumer as a sample or model;
  • they are fit for any particular purpose for which the consumer requires them and which he has made known to the seller at the time of conclusion of the contract and which the seller has accepted;
  • they are fit for the purpose for which goods of the same type are normally used;
  • they show the quality and performance which are normal in goods of the same type which the consumer can reasonably expect given the nature of the goods and taking into account any public statements on the specific characteristics of the goods, made about them by the seller, the producer or his representative, taking into account advertising or labelling.

Seller’s Defences

There is no lack of conformity if at the time the contract was concluded, the consumer was aware or ought to reasonably to have been aware of the lack of conformity or if the lack of conformity had its origin in material supplied by the consumer. The above criteria correspond broadly with the key conditions and warranties in the Sale of Goods Act.

The seller is not bound by a public statement if

  • he shows that he or she was not or could not reasonably be expected to have been aware of the statement,
  • he shows at the time of conclusion of the contract, that the statement had been corrected or
  • he shows that the decision to buy could not have been influenced by the statement.

Stricter Requirements than Sale of Goods Act

In some respects, the regulations are stricter than the Sale of Goods Act provisions.  “Merchantable quality” requires that the goods be fit for the purpose for which they are commonly bought as is reasonable to expect.  The regulations refer to normal use and do not make reference to reasonableness.

The regulations cover installations, which gives it a broader scope than the Sale of Goods Acts provisions.  The requirement for conformity in respect of installations is unconditional.  In contrast, in the context of a service of installation, fair and reasonable exclusions of liability may be permissible.


Conform at Time of Delivery

The goods must conform at the time of delivery.  This may be later than the time at which the contract is made or the time when the property or risk passes under the Sale of Goods Act.  Accordingly, there may be slight differences in timing as to when the obligations first are applicable.

The Sale of Goods Act has been amended regarding the passing of property and the passing of risk, in consumer cases.  The effect of the regulations, by making the conformity obligations applicable at the time of delivery effectively, is to place the risk on the seller up to this point.  Under the Sale of Goods Act position, the risk may have passed earlier on.  If the goods are destroyed before delivery, then they will not conform.  The place of delivery becomes an important consideration in this context.


Consumer Remedy

A buyer who deals as consumer has additional right to reject defective goods which is not available to other buyers, once they have accepted the goods. Where there is a breach of a condition by the seller which the buyer would be compelled to treat as a breach of warranty in an non-consumer  case Sale of Goods by reason of acceptance then the consumer buyer has the folowing additional option.
Te buyer, promptly upon discovering the breach, makes a request to the seller that he either remedy the breach or replace any goods which are not in conformity with the condition. If the seller refuses to comply with the request or fails to do so within a reasonable time, the buyer is entitled to reject the goods and repudiate the contract, or to have the defect constituting the breach remedied elsewhere and to maintain an action against the seller for the cost thereby incurred by him.
The onus of proving that the buyer acted with promptness lies on him. The measure of damages for breach of warranty is the estimated loss directly and naturally resulting, in the ordinary course of events, from the breach of warranty. In the case of breach of warranty of quality such loss is presumed to be the difference between the value of the goods at the time of delivery to the buyer and the value they would have had if they had answered to the warranty.
The fact that the buyer has set up the breach of warranty in diminution or extinction of the price or that the seller has replaced goods or remedied a breach does not of itself prevent the buyer from maintaining an action for the same breach of warranty if he has suffered further damage.


Further Rights of Consumer Buyer; Repair, Replace or Refund

A seller is liable to the consumer for the consequences of nonconformity.  The regulations provide that the buyer is entitled to repair, replacement, reduction in price or rescission of contract (i.e. cancellation of the contract and refund).  Any variation of these rights occurring before the customer’s actual knowledge of nonconformity is unenforceable.

There is a right to repair free of charge unless this is impossible or disproportionate.  A remedy is disproportionate if it places costs on the seller, which in comparison with those of other remedies are unreasonable, taking into account the value of the goods had they conformed, the significance of the lack of conformity and whether an alternative remedy could be completed without significant inconvenience to the consumer.

Repair or replacement must take place within a reasonable time.  The consumer must not be significantly inconvenienced.  The burden of undertaking the repair, removing goods and installing the replacement goods, appears to rest with the seller.

The specific statutory right to repair or replacement was introduced by the regulations.  The right under the Sale of Goods is to reject the goods for breach of condition.  This may in practice have enabled a buyer to bargain for a replacement or repair.  However, the 2003 Regulations make the position explicit.


Buyer’s Right to Price Reduction

The consumer buyer may alternatively, require a reduction in price, where

  • he is entitled to neither replacement or repair;
  • where the seller has not completed the replacement or repair within a reasonable time; or
  • where he has not completed the replacement or repair without significant inconvenience to the consumer buyer.

The price is reduced in the proportion that the value of the goods as delivered, bears to the value of conforming goods.

If the nonconformity is minor, the consumer is not entitled to rescind the contract under the regulation.  In this case, the buyer is entitled to damages only, which is in effect a reduction in price.

In contrast, under the Sale of Goods Act, there may be breaches of a condition which arise from a relatively minor lack of conformity.  This is because the Sale of Goods Act terms as to merchantable quality are “conditions”.  Breach of a condition entitles the buyer to terminate the contract.  Accordingly, the consumer may rely on the stricter rights if available under the Sale of Goods Act, whereby it may terminate the contract for breach of condition.


Time Scales for emergence of Defect

The Consumer Sales Directive provides that the seller is liable if the lack of conformity emerges within two years.  This may be reduced in relation to second-hand goods. Where the lack of conformity becomes apparent within six months of delivery, it is presumed until the contrary is shown, to have existed at the time of delivery.

The presumption does not apply if it would not be a reasonable inference, that the lack of conformity existed at the time of delivery by reason of the nature of goods or the nature of the lack of conformity concerned.


Guarantees and Warranties

So-called guarantees or warranties may be provided by manufacturers and others, in relation to the quality of the goods supplied.  Typically, the buyer will have purchased from a retailer so that his contractual relationship will be with it.  Accordingly, recourse for defective products will lie in the first instance, against the retailer.

In some cases, there may be civil liability on the part of the manufacturer in respect of dangerous products and defective products.  See the sections in relation to defective and dangerous products.

Product guarantees or warranties in this context are in the nature of a standard form undertaking by the manufacturer to repair or replace faulty goods within a certain period. Generally, the guarantee will undertake to replace or repair the product, if a defect emerges within the guarantee period, without proof that there was a defect or lack of conformity at the time of sale.

The guarantee may be granted automatically or it may require completion and return of a form of agreement to the manufacturer by the buyer or an online or telephone registration. In some cases, guarantees may be purchased for a price.  A free “guarantee” period may be offered. An additional guarantee or warranty may be purchased for a price.


Statutory Rights Against Guarantor

The Sale of Goods and Supply of Services Act 1980 provides that a buyer may take action directly against a manufacturer or supplier who fails to observe the terms of the guarantee as if he had supplied the goods.  Accordingly, the principle of privity of contract may not be invoked by the guaranteeing party against the buyer.

The buyer may take action for damages for breach of the guarantee.  An order may be made for an award of damages of the difference in the value of the goods as required by the guarantee and their value in the circumstances of the breach of the guarantee.  The court may order the guarantor to comply with the guarantee on such terms as it sees fit.  In effect, this is in the nature of order of specific performance.


Retailer’s Guarantee

Where the seller of goods delivers the guarantee, he is liable for non-observance of its terms. Where the guarantee is given by the retailer to the buyer, it is potentially liable. It is argued that this obligation also arises in cases where the guarantee is included in a package of documents, which the retailer has not necessarily seen.

Where the seller provides its own undertaking, or guarantee to service or repair the goods, it is presumed that the seller is not liable under any other guarantee.  A seller’s guarantee is subject to the above provisions as to a manufacturer’s guarantee. This is in addition to any rights under the manufacturer’s guarantee.

The 1980 Act provides that rights under a guarantee shall not exclude common law rights or statutory rights.  Guarantees which impose obligations on the buyer, in addition to those provided for under the contract are of no effect.  Provisions which purport to make the guarantor or its agent the sole arbiter of defects are invalid.


Further EU Consumer Protection re Product Guarantee I

The 2003 Regulations make further provision for guarantees by manufacturers and others.  A guarantee for the purpose of the regulations is an undertaking by a seller or a producer to a consumer, given without extra charge to reimburse the price paid or replace, repair or handle consumer goods in any way, if they do not meet the specifications set out in the guarantee statement or in the relevant advertising.

A producer includes

  • any manufacturer of consumer goods;
  • an importer of consumer goods into the EU;
  • a person purporting to be a producer placing his name, trademark or other distinctive sign on the goods.

The Regulations are limited to free guarantees.

Unlike the 1980 legislation, the 2003 Regulations make provision for the terms of the guarantee.  The guarantee must state that the consumer has the legal rights under the regulations. Other legislation, governing the sale of consumer goods, make clear that those rights are not affected by the guarantee.


Further EU Consumer Protection re Product Guarantee II

The guarantee must set out in plain and intelligible language the contents of the guarantee and the essential particulars for making claims under it.  This is to include the duration and territorial scope of the guarantee as well as the name and address of the guarantor.

On request by the consumer, the guarantee must be made available in writing or another durable medium accessible to the consumer.  It must be available prior to the purchase or by way of a written statement or in another durable medium.  This may include storage in an IT system.

The guarantee is to be legally binding on the guarantor, under the conditions set down in the guarantee and advertising.  National rules apply to breach of the guarantee.


Passing of Risk in Consumer Sales

Under the general default provisions, which continue to apply in non-consumer cases, unless otherwise agreed, the goods remain at the seller’s risk until the property (ownership) is transferred to the buyer. When the property transfers to the buyer, they come to be at the buyer’s risk regardless of whether or not delivery has been made.

Where delivery is delayed through the fault of either the buyer or seller, the goods are at the risk of the party in fault in relation to any loss which might not occurred but for that default.

The above provisions do not apply where the buyer deals as a consumer and the seller sends the goods to the buyer. In this case, the goods remain at the seller’s risk until the buyer or a person indicated by the buyer for that purpose acquires physical possession of the goods.

The latter provision as to delivery to a nominated person, does not apply where the goods are delivered to a carrier whose is commissioned by the buyer for the purpose of carrying the goods and which as not proposed by the seller for that purpose. In this case, the goods are at the buyer’s risk upon delivery to the carrier. The above does not limit the rights of the buyers or the liability of the carrier in respect of the goods.


Delivery in Consumer Sales

The 2013 Regulations amend the general rules in relation to delivery in consumer cases. Where the buyer deals as consumer, the general provision by which the seller is bound to send the  goods within a reasonable time in the absence of specific provision otherwise, does not apply. Unless the parties otherwise agree, the seller shall deliver the goods by transferring the physical possession or custody or control of the goods to the buyer without undue delay and not later than 30 days from the conclusion of the contract.

If the seller does not deliver the goods at the time agreed with the buyer, the buyer may require the seller to make the delivery, within an additional period of time appropriate to the circumstances. This provision does not apply if

  • the seller has refused to deliver the goods;
  • if delivery of goods within the time frame agreed with the buyer is essential taking into account all the relevant circumstances at the time of conclusion of the contract; or
  • if the buyer has informed the seller prior to the conclusion of the contract that delivery on a specified date is essential.

Where the seller fails to deliver the goods

  • within the additional period of time for delivery afforded  above,
  • by the date specified by the buyer (as an essential date), or
  • by the agreed date where delivery of the goods by that date is essential taking into account all the relevant circumstances at the time of the contract, the buyer may treat the failure as a breach of a condition of the contract which entitles the buyer to repudiate the contract.

If the buyer repudiates the contract, in accordance with the above provision, the seller shall without due delay reimburse all sums paid under the contract.


Unsolicited Goods

The 2013 regulations make further provision in relation to the delivery or provision of unsolicited goods or unsolicited services, in respect of consumers. A consumer is exempted from any requirement to provide consideration for unsolicited goods or services supplied by a trader.

The absence of a response from the consumer following the supply of unsolicited goods or the provision of unsolicited services does not constitute consent to the provision of those goods. The non-return or safekeeping of the goods does not constitute consent to or the provision of consideration for the goods or services or the return or safekeeping of the goods.

In the case of the unsolicited supply of goods, the consumer may treat the supply of the goods as if they were an unconditional gift.


References and Sources

Irish Texts

Consumer Law Rights & Regulation    Donnelly & White (2014)

Consumer Protection Act 2007 Annotated  Bird (2008)

Consumer Rights Long (2004)

Commercial & Consumer Law: Annotated Statutes O’Reilly, P (2000)

UK Texts

Consumer Sales Law: The Law Relating to Consumer Sales and Financing of Goods 3rd ed

John MacLeod, James Devenney (2019)

Electronic Consumer Contracts in the Conflict of Laws 2nd ed Zeng Sophia Tang (2018)

The Law of Consumer Redress in an Evolving Digital Market: Upgrading from Alternative to Online Dispute Resolution Pablo Cortes (2017)

Blackstone’s Statutes on Commercial & Consumer Law 2017-2018 Francis Rose

Consumer and Trading Standards: Law and Practice 2017 Bryan Lewin, Jonathan Kirk

Woodroffe and Lowe’s Consumer Law and Practice Woodroffe and Lowe’s Consumer Law and Practice 10th ed Geoffrey Woodroffe, Chris Willett, Christian Twigg-Flesner (2016)

Butterworths Trading and Consumer Law Looseleaf Annual Subscription Deborah L. Parry, Roland Rowell (2016)

Butterworths Commercial and Consumer Law Handbook 8th ed Richard B. Mawrey, Tobias Riley-Smith (2015

Consumer and Trading Standards: Law and Practice 4th ed

Legislation

Sale of Goods Act 1893 56 & 57

Sale of Goods and Supply of Services Act 1980

The 2011 Report of the Sales Law Review Group,

Consumer Protection Act 2007 19/2007

Competition and Consumer Protection Act 2014 29/2014

Orders Re Price Display (retained

Prices Act 1958.

Prices (Amendment) Act 1965

Prices (Amendment) Act1972

Orders made under Prices Acts 1958 and 1965 were carried over on repeal of the 1958 and 1965 Acts by 19/2007

Prices and Charges (Tax-inclusive Statements) Order 1973, S.I.

Charges (Hairdressing) Display Order 1976, S.I. No. 156 of 1976

Retail Prices (Food in Catering Establishments) Display Order 1984, S.I. No. 213 of 1984

Consumer Information (Advertisements) (Disclosure of Business Interest) Order 1984, S.I. No. 168 of 1984417

Consumer Information (Advertisements For Concert Or Theatre Performances) Order 1997, S.I. No. 103 of 1997

Retail Price (Diesel and Petrol) Display Order 1997, S.I. No. 178 of 1997

Retail Price (Beverages in Licensed Premises) Display Order 19/2007

Consumer Information Act Orders

Consumer Information (Advertisements For Airfares) Order 2000, S.I. No. 468 of 2000

Consumer Protection Act 2007 (Commencement) Order 2007,S.I. No. 178 of 2007

Consumer Protection Act 2007 (Establishment Day) Order 2007,S.I. No. 179 of 2007

Consumer Protection (Fixed Payment Notice) Regulations 2007,S.I. No. 689 of 2007

Consumer Protection Act 2007 (National Consumer Agency) Levy Regulations 2011, S.I. No. 560 of 2011

Consumer Protection (Consumer Information) (Articles of Precious Metals) Regulations 2012, S.I. No. 143 of 2012

Consumer Protection Act 2007 (National Consumer Agency) Levy Regulations 2012, S.I. No. 435 of 2012

Consumer Protection Act 2007 (National Consumer Agency) Levy Regulations 2013, S.I. No. 409 of 2013

Consumer Protection Act 2007 (National Consumer Agency) Levy Regulations 2014, S.I. No. 458 of 2014

Consumer Protection Act 2007 (Competition and Consumer Protection Commission) Levy Regulations 2015, S.I. No. 457 of 2015

European Communities (Cooperation Between National Authorities Responsible for the

Enforcement of Consumer Protection Laws) Regulations 2006, S.I. No. 290 of 2006 [Minister

European Communities (Cooperation Between National Authorities Responsible for the

Enforcement of Consumer Protection Laws) (Amendment) Regulations 2008, S.I. No. 316 of 2008  European Communities (Single-Member Private Limited Companies)European Communities (Protection of Consumers in Respect of Contracts made by Means of Distance Communication) (Amendment) Regulations 2010, S.I. No. 370 of 2010

European Communities (Court Orders for the Protection of Consumer Interests) Regulations 2010, S.I. No. 555 of 2010

European Union (Protection of Consumers in respect of Timeshare, Long-term Holiday Product, Resale and Exchange Contracts) Regulations 2011, S.I. No. 73 of 2011

European Communities (Cooperation between National Authorities Responsible for the Enforcement of Consumer Protection Laws) (Amendment) Regulations 2012, S.I. No. 485 of 2012 [

European Union (Public Limited Companies) (Directive 2012/ European Communities (Cooperation between National Authorities Responsible for the Enforcement of Consumer Protection Laws) (Amendment) Regulations 2013, S.I. No. 122 of 2013

European Communities (Unfair Terms in Consumer Contracts) (Amendment) Regulations 2013, S.I. No. 160 of 2013

European Communities (Cooperation between National Authorities Responsible for the Enforcement of Consumer Protection Laws) (Amendment) (No. 2) Regulations 2013, S.I. No. 200 of 2013

European Union (Consumer  nformation, Cancellation and Other Rights) Regulations 2013, S.I. No. 484 of 2013

European Union (Consumer Information, Cancellation and Other Rights) (Amendment) Regulations 2014, S.I. No. 250 of 2014

European Communities (Unfair Terms in Consumer Contracts) (Amendment) Regulations 2014, S.I. No. 336 of 2014

European Union (Protection of Consumers in respect of Timeshare, Long-term Holiday Product, Resale and Exchange Contracts) (Amendment) Regulations 2014

European Union (Alternative Dispute Resolution for Consumer Disputes) Regulations 2015, S.I. No. 343 of 2015

European Union (Alternative Dispute Resolution for Consumer Disputes) (No. 2) Regulations

2015, S.I. No. 368 of 2015

European Union (Traded Companies — Corporate Governance Statements) Regulations 2015, S.I. No. 423 of 2015

European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2015, S.I. No. 500 of 2015

European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2016, S.I. No. 32 of 2016

European Union (Consumer Information, Cancellation and Other Rights) (Amendment) Regulations 2016, S.I. No. 336 of 2016

Competition and Consumer Protection Act 2014 (Commencement) Order 2014, S.I. No. 366 of 2014

Competition and Consumer Protection Act 2014 (Establishment Day) Order 2014, S.I. No. 367 of 2014

Consumer Protection Act 2007 (Grocery Goods Undertakings) Regulations 2016, S.I. No. 35 of 2016

Consumer Protection Act 2007 (Competition and Consumer Protection Commission) Levy Regulations 2016, S.I. No. 479 of

2016

District Court (Consumer Protection Act 2007) Rules 2009, S.I. No. 106 of 2009

European Communities (Unfair Terms in Consumer Contracts) Regulations 1995, S.I. No. 27 of 1995 [

European Communities (Unfair Terms in Consumer Contracts) (Amendment) Regulations 2000, S.I. No. 307 of 2000

European Communities (Certain Aspects of the Sale of Consumer Goods and Associated Guarantees) Regulations 2003, S.I. No. 11 of 2003

European Communities (Protection of Consumers in Respect of Contracts Made by Means of Distance Communication) (Amendment) Regulations 2005, S.I. No. 71 of 2005

European Communities (International Financial  European Communities (Cooperation Between National Authorities Responsible for the Enforcement of Consumer Protection Laws) Regulations 2006, S.I. No. 290 of 2006

European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004, S.I. No. 853 of 2004

Circuit Court Rules (Consumer Protection Act 2007) 2008, S.I. No. 585 of 2008

European Communities (Court Orders for the Protection of Consumer Interests) Regulations 2010, S.I. No. 555 of 2010

European Communities (Unfair Terms in Consumer Contracts) Amendment) Regulations 2013, S.I. No. 160 of 2013

European Union (Consumer Information, Cancellation and Other Rights) Regulations 2013, S.I. No. 484 of 2013

European Union (Consumer Information, Cancellation and Other Rights) (Amendment) Regulations 2014, S.I. No. 250 of 2014

European Communities (Unfair Terms in Consumer Contracts) (Amendment) Regulations 2014, S.I. No. 336 of 2014

European Union (Alternative Dispute Resolution for Consumer Disputes) Regulations 2015, S.I. No. 343 of 2015

European Union (Alternative Dispute Resolution for Consumer Disputes) (No. 2) Regulations 2015, S.I. No. 368 of 2015

European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2015, S.I. No. 500 of 2015

European Union (Online Dispute Resolution for Consumer Disputes) Regulations 2016, S.I. No. 32 of 2016

European Union (Consumer Information, Cancellation and Other Rights) (Amendment) Regulations 2016, S.I. No. 336 of 2016