What is it called?

Directive (EU) 2019/771 on certain aspects concerning contracts for the sale of goods (the “SGD”). The SGD updates the EU’s sale of goods and consumer remedies legislation (most notably, the Consumer Sales and Guarantees Directive).

What is it about?

The SGD has consumer protection at its core. In particular, it makes the seller liable for any lack of conformity with the sales contract which existed at the time of delivery. It also sets out common rules for sales contracts, creates a minimum statutory warranty and establishes consumer remedies in the event of non-conformity (such as repair, replacement or refund). Alongside this, it sets out rules on how these statutory consumer remedies and any additional commercial guarantees should operate. It also, for the first time, sets minimum requirements for the provision of software updates.

Who and what does it apply to?

The SGD applies to B2C sales contracts between a seller and a consumer for the supply of goods. Importantly, it is the seller that has liability under the SGD (not the manufacturer, unless the manufacturer also sold the goods to the consumer).

The “goods” can be any physical movable items, including products with digital elements (e.g. consumer electronics preloaded with software). Standalone digital content and digital services are covered by the accompanying Directive (EU) 2019/770 concerning contracts for the supply of digital content and digital services (“Digital Content Directive”), which was introduced together with and complements the SGD.

Why does it matter?

A component of the European Commission’s Digital Single Market Strategy, the SGD aimed to cement the EU’s position as a world leader in consumer rights and the digital economy by improving access to goods with digital elements and by harmonising previous rules in this area across the EU (where divergence in consumer law requirements had been considered as a barrier to cross-border trade).

Of note, as a piece of “maximum harmonization” legislation, unless a specific derogation is provided in the SGD provision in question, it is not possible for EU member states to exceed the terms set out in the legislation. In practice, this means that consumers have broadly similar remedies available across the EU, though a small number of derogations were included to accommodate certain pre-existing rights under national laws that were more advantageous than those being offered in the SGD.

The deadline for EU member states to transpose the SGD into national law was 1 July 2021 and to apply the SGD was 1 January 2022. We are aware that a number of member states have missed this deadline.

As the UK has left the EU, the SGD does not apply in the UK and businesses should be aware that different regimes now govern B2C sales contracts in these markets.

Where can I find it?

The SGD is available here.

Are there any upcoming changes?

Yes – it’s worth noting that, although the SGD only started to apply in member states from January this year, it is already subject to potential revision. As part of its public consultation “Sustainable consumption of goods – promoting the right to repair and reuse”, the European Commission is considering sustainability-related amendments to the SGD. Potential updates focus on the right to repair (over replacement) and discuss the use of refurbished products by sellers. Feedback on the call for evidence and the public consultation is open 5 April 2022. See here to find out more.

Posted by Cooley