European Union: ECJ Clarifies Interpretation Of Consumer Sales And Guarantees Directive

On 23 May 2019, the Court of Justice of the European Union (the "ECJ") held that EU Member States are competent to establish the place where the consumer is required to make goods acquired under a distance contract available to the seller, in order for these goods to be brought into conformity in accordance with Article 3 of Directive 1999/44/EC of 25 May 1999 on specific aspects of the sale of consumer goods and associated guarantees (the "Directive"). This provision entitles the consumer to "require the seller to repair the goods or [...] to replace them, in either case free of charge, unless this is impossible or disproportionate". The ECJ also held that the consumer's right to have goods brought into conformity "free of charge" does not include the seller's obligation to pay for the cost of transporting those goods (subject to limited exceptions) (ECJ, 23 May 2019, Case C-52/18, Christian Fülla v. Toolport GmbH).

The ECJ delivered its judgment in response to a request for a preliminary ruling from the District Court of Norderstedt in Germany (the "Court") in a dispute between a consumer, Christian Fülla, and a German company, Toolport GmbH ("Toolport") regarding the purchase of a defective tent. Having bought the tent from Toolport by telephone and having had it delivered to his place of residence, Mr. Fülla discovered that the tent was defective. He asked Toolport to bring the tent into conformity at his place of residence. Toolport, however, considered that Mr. Fülla's claims were unfounded, following which Mr. Fülla requested the rescission of the contract and reimbursement of the purchase price of the tent. Toolport failed to comply with that request and Mr. Fülla consequently brought an action against Toolport before the Court. The main issue at hand regarded the place where the tent was to be brought into conformity.

Under German law, the consumer is required to place the item in question at the seller's place of business for it to be brought into conformity. The Court, however, was unsure whether such a requirement would be compatible with Article 3 of the Directive, as transport is likely to be seen as a significant inconvenience for the consumer, which the Directive seeks to avoid. Furthermore, the Court was uncertain as to whether the mention "free of charge" under Article 3 of the Directive implies that the seller also has to take charge of the consumer's transportation fee. Finally, the Court raised doubts as to when to ensure the consumer's right to rescission of the contract. The Court thus decided to stay the proceedings and refer these questions of interpretation to the ECJ for a preliminary ruling.

At the outset, the ECJ explained the purpose of Article 3 of the Directive: if the goods delivered are not in conformity, the consumer has the right to require the goods to be brought into conformity by repair or replacement, without any significant inconvenience to the consumer. If that is not possible, Article 3(5) and (6) dictate that an appropriate reduction in price or the rescission of the contract must be granted.

Finding that the place in question can vary depending on the specific circumstances of each individual case, the ECJ left it up to the national court to specify such a place, taking into account the three-pronged requirement that the goods must be brought into conformity: (i) free of charge; (ii) within a reasonable time and (iii) without significant inconvenience to the consumer.

With respect to the "free of charge" requirement, the ECJ clarified that it refers to the costs necessary to bring the goods into conformity, such as the cost of postage, labour and materials. The ECJ concluded that this does not include an obligation on the seller to pay for the cost of transporting those goods to the seller's place of business, unless such cost constitutes such a burden as to deter the consumer from asserting his rights. According to the ECJ, this is for the national court to determine.

Finally, with respect to the rescission of the contract, the ECJ first noted that the consumer may require the seller to repair or replace the goods, unless this is impossible or disproportionate. The ECJ made clear that rescission is only available if neither of the two options is convenient, or if the seller fails to comply with the requirements set out above. Accordingly, the ECJ favours the performance of the contract instead, rescission should be considered as a solution of last resort.

In the case at hand, where Toolport neither responded to Mr. Fülla's request nor specified any appropriate steps to bring Mr. Fülla's tent into conformity, Mr. Fülla was unable to have his item repaired or replaced within a reasonable time. In these circumstances, the ECJ found that the Court should ensure Mr. Fülla's right to a rescission of the contract.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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