LeX-Ray

In order to remain competitive on global markets, the Union needs to improve the functioning of the internal market and successfully meet the multiple challenges posed today by an increasingly technology-driven economy. The Digital Single Market Strategy lays down a comprehensive framework facilitating the integration of the digital dimension into the internal market. The first pillar of the Digital Single Market Strategy tackles fragmentation in intra-EU trade by looking at all major obstacles to the development of cross-border e-commerce, which constitutes the most significant part of cross-border business-to-consumer sales of goods.

Article 26(1) and (2) of the Treaty on the Functioning of the European Union ( TFEU ) provide that the Union is to adopt measures with the aim of establishing or ensuring the functioning of the internal market, which is to comprise an area without internal frontiers in which the free movement of goods and services is ensured. Article 169(1) and point (a) of Article 169(2) TFEU provide that the Union is to contribute to the attainment of a high level of consumer protection through measures adopted pursuant to Article 114 TFEU in the context of the completion of the internal market. Τhis Directive aims to strike the right balance between achieving a high level of consumer protection and promoting the competitiveness of enterprises, while ensuring respect for the principle of subsidiarity.

Certain aspects concerning contracts for the sale of goods should be harmonised, taking as a base a high level of consumer protection, in order to achieve a genuine digital single market, increase legal certainty and reduce transaction costs, in particular for small and medium-sized enterprises (‘SMEs’).

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.

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.

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 CRD 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 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 significantly diverge today on essential elements, such as the absence or existence of a hierarchy of remedies.

Existing disparities can adversely affect businesses and consumers. Pursuant to RI 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.

While consumers enjoy a high level of protection when they purchase from abroad as a result of the application of RI, 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.

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.

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, 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.

This Directive complements CRD. While CRD 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.

This Directive should only apply to tangible movable items that constitute goods within the meaning laid down in this Directive. Member States should therefore be free to regulate contracts for the sale of immovable property, such as residential buildings, and its main components intended to constitute a major part of such immovable property.

This Directive and Directive 2019/770 of the European Parliament and of the Council ( 6 ) should complement each other. While Directive 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 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.

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.

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.

In contrast, if the absence of the incorporated or inter-connected digital content or digital service does not prevent the goods from performing their functions, or if the consumer concludes a contract for the supply of digital content or a digital service which does not form part of the contract concerning the sale of goods with digital elements, that contract should be considered to be separate from the contract for the sale of the goods, even if the seller acts as an intermediary of that second contract with the third-party supplier, and could fall within the scope of Directive 2019/770 if the conditions of that Directive are met. For instance, if the consumer downloads a game application from an app store onto a smart phone, the contract for the supply of the game application is separate from the contract for the sale of the smart phone itself. This Directive should therefore only apply to the sales contract concerning the smart phone, while the supply of the game application should fall under Directive 2019/770, if the conditions of that Directive are met. Another example would be where it is expressly agreed that the consumer buys a smart phone without a specific operating system and the consumer subsequently concludes a contract for the supply of an operating system from a third party. In such a case, the supply of the separately bought operating system would not form part of the sales contract and therefore would not fall within the scope of this Directive but could fall within the scope of Directive 2019/770, if the conditions of that Directive are met.

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.

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.

This Directive should not affect the freedom of Member States to allow consumers to choose a specific remedy if the lack of conformity of the goods becomes apparent shortly after delivery, namely national provisions which provide for a right for the consumer to reject goods with a defect and to treat the contract as repudiated or ask for immediate replacement, within a specific short period of time after the delivery of the goods, which should not exceed 30 days.

Member States should remain free to regulate information obligations of the seller in connection with the conclusion of the contract or the duty of the seller to warn the consumer about, for instance, certain characteristics of the good, the suitability of materials provided by the consumer or possible disadvantages resulting from specific requests of the consumer, for example a request by the consumer to use a specific fabric for the tailoring of a ball gown.

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.

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.

This Directive should apply to any contract whereby the seller transfers or undertakes to transfer the ownership of goods to the consumer. Platform providers could be considered to be sellers under this Directive if they act for purposes relating to their own business and as the direct contractual partner of the consumer for the sale of goods. Member States should remain free to extend the application of this Directive to platform providers that do not fulfil the requirements for being considered a seller under this Directive.

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.

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.

Therefore, the goods should comply with the requirements agreed between the seller and the consumer in the sales contract. Such requirements could cover, inter alia, the quantity, quality, type and description of the goods, their fitness for a specific purpose, as well as the delivery of the goods with the agreed accessories and any instructions. The requirements in the sales contract should include those resulting from pre-contractual information which, in accordance with CRD, forms an integral part of the sales contract.

The notion of functionality should be understood to refer to the ways in which the goods can perform their functions having regard to their purpose. The notion of interoperability relates to whether and to what extent the goods are able to function with hardware or software that is different from those with which goods of the same type are normally used. Successful functioning could include, for instance, the ability of the goods to exchange information with such other software or hardware and to use the information exchanged.

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.

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.

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.

In principle, in the case of goods with digital elements whereby the digital content or digital service incorporated in or inter-connected with the goods is supplied through a single act of supply, the seller should only be liable for a lack of conformity that exists at the time of delivery. However, the obligation to provide updates should reflect the fact that the digital environment of any such good constantly changes. Therefore, updates are a necessary tool in order to ensure that the goods are able to function in the same way that they did at the time of delivery. Furthermore, in contrast to traditional goods, goods with digital elements are not completely separate from the seller's sphere because the seller, or a third person supplying the digital content or digital service under the sales contract, is able to update the goods from a distance, usually over the internet. Therefore, if the digital content or digital service is supplied by a single act of supply, the seller should be liable to provide the updates necessary to keep the goods with digital elements in conformity for a period of time that the consumer can reasonably expect, even if the goods were in conformity at the time of delivery. The period of time during which the consumer can reasonably expect to receive updates should be assessed based on the type and purpose of the goods and the digital elements, and taking into account the circumstances and nature of the sales contract. A consumer would normally expect to receive updates for at least as long as the period during which the seller is liable for a lack of conformity, while in some cases the consumer's reasonable expectation could extend beyond that period, as might be the case particularly with regard to security updates. In other cases, for instance as regards goods with digital elements the purpose of which is limited in time, the seller's obligation to provide updates would normally be limited to that time.

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.

Under this Directive, the seller should be obliged to deliver to the consumer goods which are in conformity at the time of delivery. It is possible that sellers would make use of spare parts in order to fulfil their obligation to repair goods in the event of a lack of conformity that existed at the time of delivery. While this Directive should not impose an obligation on sellers to ensure the availability of spare parts throughout a period of time as an objective requirement for conformity, it should not affect other provisions of national law obliging the seller, the producer or other person constituting a link in the chain of transactions, to ensure that spare parts are available or to inform consumers about such availability.

A large number of goods have to be installed before they can be used effectively by the consumer. In addition, in the case of goods with digital elements, the installation of the digital content or digital service is usually necessary for the consumer to be able to use such goods in line with their intended purpose. Therefore, any lack of conformity resulting from an incorrect installation of the goods, including from the incorrect installation of the digital content or digital service incorporated in or inter-connected with the goods, should be regarded as a lack of conformity, where the installation was performed by the seller or under the seller's control. Where the goods were intended to be installed by the consumer, a lack of conformity resulting from incorrect installation should be regarded as a lack of conformity of the goods, irrespective of whether the installation was performed by the consumer or by a third party under the consumer's responsibility, if the incorrect installation was due to shortcomings in the installation instructions, such as incompleteness or a lack of clarity making the installation instructions difficult to use for the average consumer.

Conformity should cover material defects as well as legal defects. Restrictions resulting from a violation of third-party rights, in particular intellectual property rights, could prevent or limit the use of the goods in accordance with the contract. Member States should ensure that in such cases the consumer is entitled to remedies for the lack of conformity as set out in this Directive, unless national law provides for the nullity of the contract or for its rescission in such cases.

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.

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.

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 CRD and accordingly implemented in the law of the Member States.

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.

Where goods require installation by the seller, the consumer in certain cases is unable to use the goods or notice a defect before the installation has been completed. Accordingly, where, under the sales contract, the goods are to be installed by the seller or under the seller's responsibility, the goods should be considered to be delivered to the consumer when the installation is complete.

In order to ensure that there is legal certainty for sellers and overall consumer confidence in cross-border purchases, it is necessary to provide for a period during which the consumer is entitled to remedies for any lack of conformity that exists at the relevant time for establishing conformity. Given that when implementing Directive 1999/44, a large majority of Member States have provided for a period of two years, and in practice that period is considered reasonable by market participants, that period should be maintained. The same period should apply in the case of goods with digital elements. However, where the contract provides for continuous supply for more than two years, the consumer should be entitled to remedies for any lack of conformity of the digital content or the digital service that occurs or becomes apparent within the period during which the digital content or digital service is to be supplied under the contract. In order to ensure that there is flexibility for Member States to increase the level of consumer protection in their national law, Member States should be free to provide for longer time limits for the liability of the seller than those laid down in this Directive.

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.

As regards certain aspects, different treatment of second-hand goods could be justifiable. Although a liability or limitation period of two years or more usually reconciles the interests of both the seller and the consumer, this might not be the case with regard to second-hand goods. Member States should, therefore, be allowed to enable the parties to agree on a shortened liability or limitation period for such goods. Leaving this question to a contractual agreement between the parties increases contractual freedom and ensures that the consumer has to be informed both about the nature of the good as a second-hand good, and the shortened liability or limitation period. However, such a contractually agreed period should not be shorter than one year.

This Directive should not regulate the conditions under which the liability period, as provided for in this Directive, or a limitation period can be suspended or interrupted. Member States should, therefore, be able to provide for the suspension or interruption of the liability period or limitation period, for example in the event of repair, replacement or negotiations between the seller and the consumer with a view to an amicable settlement.

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.

Member States should be allowed to maintain or introduce provisions stipulating that, in order to benefit from the consumer's rights, the consumer has to inform the seller of a lack of conformity within a period not shorter than two months from the date on which the consumer detected such lack of conformity. Member States should be allowed to ensure that consumers have a higher level of protection, by not introducing such an obligation.

In order to increase legal certainty and to eliminate one of the major obstacles inhibiting the internal market, this Directive should fully harmonise the remedies available to consumers for lack of conformity of goods, and the conditions under which such remedies can be exercised. In particular, in the event of lack of conformity, consumers should be entitled to have the goods brought into conformity or to receive a proportionate reduction in the price or to terminate the contract.

As regards bringing goods into conformity, consumers should enjoy a choice between repair or replacement. Enabling consumers to require repair should encourage sustainable consumption and could contribute to greater durability of products. The consumer's choice between repair and replacement should only be limited where the option chosen would be legally or factually impossible or would impose costs on the seller that would be disproportionate, compared to the other option available. For instance, it might be disproportionate to request the replacement of goods because of a minor scratch, where such replacement would create significant costs and the scratch could easily be repaired.

The seller should be allowed to refuse to bring the goods into conformity if both repair and replacement are impossible, or they would impose disproportionate costs on the seller. The same should apply if either repair or replacement is impossible and the alternative remedy would impose disproportionate costs on the seller. For instance, if goods are located in a place that is different from where they were originally delivered, the costs of postage and carriage could become disproportionate for the seller.

When a lack of conformity becomes apparent, the consumer should inform the seller about it in order to give the seller the opportunity to bring the good into conformity. The seller should do that within a reasonable period of time. Accordingly, the consumer should not, in principle, be immediately entitled to a price reduction or termination of the contract but should give the seller reasonable time to repair or replace the non-conforming good. If the seller has not repaired or replaced the good within that time, the consumer should be entitled to claim and obtain a price reduction or termination of the contract without waiting any longer.

If repair or replacement have not provided the consumer with a proper remedy for the lack of conformity, the consumer should be entitled to a price reduction or to terminate the contract. That should be the case, in particular, where the seller has not completed repair or replacement, or where it is clear from the circumstances that the seller will not complete repair or replacement, or the seller has refused to bring the goods into conformity because repair and replacement are impossible or would impose disproportionate costs on the seller.

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.

In order to maintain a balance between the rights and obligations of the contracting parties, the consumer should enjoy the right to terminate the contract only in cases where the lack of conformity is not minor.

Member States should be able to regulate the conditions under which the performance of the debtor can be fulfilled by another person, for example the conditions under which the seller's obligation to repair a good can be performed by the consumer or a third party at the seller's expense.

In order to protect consumers against the risk of extended delays, any repair or replacement should be successfully completed within a reasonable period of time. What is considered to be a reasonable time for completing a repair or replacement should correspond to the shortest possible time necessary for completing the repair or replacement. That time should be objectively determined by considering the nature and complexity of the goods, the nature and severity of the lack of conformity, and the effort needed to complete repair or replacement. When implementing this Directive, Member States should be able to interpret the notion of reasonable time for completing repair or replacement, by providing for fixed periods that could generally be considered reasonable for repair or replacement, in particular with regard to specific categories of products.

This Directive should not lay down provisions on where the obligations of a debtor have to be performed. This Directive should, therefore, neither specify the place of delivery, nor prescribe where the repair or replacement should take place; such questions should be left to national law.

Where the seller brings the good into conformity by replacement, the consumer should not be obliged to pay for the normal use of the goods before they were replaced. The use of the goods should be considered normal if it is in accordance with the nature and purpose of the goods.

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.

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.

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.

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.

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 CRD. 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.

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.

Persons or organisations regarded under national law as having a legitimate interest in protecting consumer contractual rights should be afforded the right to initiate proceedings, either before a court or before an administrative authority which is competent to decide upon complaints or to initiate appropriate legal proceedings.

Nothing in this Directive should prejudice the application of rules of private international law, in particular RI and Regulation 2012/1215 of the European Parliament and of the Council ( 7 ) .

Directive 1999/44 should be repealed. The date of repeal should be aligned with the transposition date of this Directive. In order to ensure that the laws, regulations and administrative provisions necessary for Member States to comply with this Directive are applied in a uniform manner to contracts concluded from the transposition date onwards, this Directive should not apply to contracts concluded before its transposition date.

The Annex to Regulation 2017/2394 of the European Parliament and of the Council ( 8 ) should be amended to include a reference to this Directive so as to facilitate cross-border cooperation on enforcement of this Directive.

Annex I to Directive 2009/22 of the European Parliament and of the Council ( 9 ) should be amended to include a reference to this Directive so as to ensure that the collective interests of consumers laid down in this Directive are protected.

In accordance with the Joint Political Declaration of 28 September 2011 of Member States and the Commission on explanatory documents ( 10 ) , Member States have undertaken to accompany, in justified cases, the notification of their transposition measures with one or more documents explaining the relationship between the components of a directive and the corresponding parts of national transposition instruments. With regard to this Directive, the legislator considers the transmission of such documents to be justified.

Since the objective of this Directive, namely to contribute to the functioning of the internal market by tackling in a consistent manner contract law-related obstacles for the cross-border sales of goods in the Union, cannot be sufficiently achieved by the Member States, due to the fact that each Member State individually is not in a position to tackle the existing fragmented legal framework by ensuring the coherence of its law with the laws of other Member States, but can rather, by removing the principal contract law-related obstacles through full harmonisation, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Directive does not go beyond what is necessary in order to achieve this objective.

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 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.

This Directive respects the fundamental rights and freedoms and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union, including those enshrined in Articles 16, 38 and 47 thereof,