# EUR-Lex - 52011PC0635 - EN

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# 52011PC0635

**Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on a Common European Sales Law /* COM/2011/0635 final - 2011/0284 (COD) */**

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EXPLANATORY MEMORANDUM

1.           CONTEXT OF THE PROPOSAL

·
Grounds for and objectives of the proposal

Differences in contract law between Member
States hinder traders and consumers who want to engage in cross-border trade
within the internal market. The obstacles which stem from these differences
dissuade traders, small and medium-sized enterprises (SME) in particular, from
entering cross border trade or expanding to new Member States' markets.
Consumers are hindered from accessing products offered by traders in other
Member States.

Currently, only one in ten of Union traders,
involved in the sale of goods, exports within the Union and the majority of
those who do only export to a small number of Member States. Contract law
related barriers are one of the major factors contributing to this situation.
Surveys[1] show that out of the
range of obstacles to cross-border trade including tax regulations,
administrative requirements, difficulties in delivery, language and culture,
traders ranked contract-law-related obstacles among the top barriers to
cross-border trade.

The need for traders to adapt to the
different national contract laws that may apply in cross-border dealings makes
cross-border trade more complex and costly compared to domestic trade, both for
business-to-consumer and for business-to-business transactions.

Additional transaction costs compared to
domestic trade usually occur for traders in cross-border situations. They
include the difficulty in finding out about the provisions of an applicable
foreign contract law, obtaining legal advice, negotiating the applicable law in
business-to-business transactions and adapting contracts to the requirements of
the consumer's law in business-to-consumer transactions.

In cross-border transactions between a
business and a consumer, contract law related transaction costs and legal
obstacles stemming from differences between different national mandatory
consumer protection rules have a significant impact. Pursuant to Article 6 of
Regulation 593/2008 of the European Parliament and of the Council of 17 June
2008 on the law applicable to contractual obligations (Rome I),[2]
whenever a business directs its activities to consumers in another Member
State, it has to comply with the contract law of that Member State. In cases where
another applicable law has been chosen by the parties and where the mandatory
consumer protection provisions of the Member State of the consumer provide a
higher level of protection, these mandatory rules of the consumer's law need to
be respected. Traders therefore need to find out in advance whether the law of
the Member State of the consumer's habitual residence provides a higher level
of protection and ensure that their contract is in compliance with its
requirements. The existing harmonisation of consumer law at Union level has led
to a certain approximation in some areas but the differences between Member
States' laws remain substantial. In e-commerce transactions, traders incur
further contract law related costs which stem from the need to adapt the
business's website to the legal requirements of each Member State where they
direct their activity.

In cross-border transactions between
traders, parties are not subject to the same restrictions on the applicable
law. However, the economic impact of negotiating and applying a foreign law is
also high. The costs resulting from dealings with various national laws are
burdensome particularly for SME. In their relations with larger companies, SME
generally have to agree to apply the law of their business partner and bear the
costs of finding out about the content of the foreign law applicable to the
contract and of complying with it. In contracts between SME, the need to
negotiate the applicable law is a significant obstacle to cross-border trade.
For both types of contracts (business-to-business and business-to-consumer) for
SME, these additional transaction costs may even be disproportionate to the
value of the transaction.

These additional transaction costs grow
proportionately to the number of Member States into which a trader exports.
Indeed, the more countries they export to, the greater the importance traders
attach to differences in contract law as a barrier to trade. SME are
particularly disadvantaged: the smaller a company's turnover, the greater the
share of transaction costs.

Traders are also exposed to increased legal
complexity in cross-border trade, compared to domestic trade, as they often
have to deal with multiple national contract laws with differing
characteristics.

Dealing with foreign laws adds complexity
to cross-border transactions. Traders ranked the difficulty in finding out the
provisions of a foreign contract law first among the obstacles to
business-to-consumer transactions and third for business-to-business
transactions.[3] Legal complexity is
higher when trading with a country whose legal system is fundamentally
different while it has been demonstrated empirically that bilateral trade
between countries which have a legal system based on a common origin is much
higher than trade between two countries without this commonality.[4]

Thus, differences in contract law and the
additional transaction costs and complexity that they generate in cross-border
transactions dissuade a considerable number of traders, in particular SME, from
expanding into markets of other Member States. These differences also have the
effect of limiting competition in the internal market. The value of the trade
foregone each year between Member States due to differences in contract law
alone amounts to tens of billions of Euros.

The missed opportunities for cross-border
trade also have a negative impact upon European consumers. Less cross-border
trade, results in fewer imports and less competitiveness between traders. This
can lead to a more limited choice of products at a higher price in the
consumer's market.

While cross-border shopping could bring
substantial economic advantages of more and better offers, the majority of
European consumers shop only domestically. One of the important reasons for
this situation is that, because of the differences of national laws consumers
are often uncertain about their rights in cross-border situations. For example,
one of their main concerns is what remedies they have when a product purchased
from another Member State is not in conformity with the contract. Many
consumers are therefore discouraged to purchase outside their domestic market.
They miss out on opportunities in the internal market, since better offers in
terms of quality and price can often be found in another Member State.

E-commerce facilitates the search for
offers as well as the comparison of prices and other conditions irrespective of
where a trader is established. However, when consumers try to place orders with
a business from another Member State, they are often faced with the business
practice of refusal to sell which is often due to differences in contract law.

The overall objective of the
proposal is to improve the establishment and the functioning of the internal
market by facilitating the expansion of cross-border trade for business and
cross-border purchases for consumers. This objective can be achieved by making
available a self-standing uniform set of contract law rules including
provisions to protect consumers, the Common European Sales Law, which is to be
considered as a second contract law regime within the national law of each
Member State.

Traders should be able to apply the Common European
Sales Law in all their cross-border dealings within the European Union instead
of having to adapt to different national contract laws, provided that the other
party to the contract agrees. It should cover the full life cycle of a contract
and thus comprise most of the areas which are relevant when concluding
cross-border contracts. As a result, the need for traders to find out about the
national laws of other Member States would be limited to only some, much less
important, matters which are not covered by the Common European Sales Law. In
business-to-consumer transactions there would be no further need to identify the
mandatory consumer protection provisions in the consumer's law, since the Common
European Sales Law would contain fully harmonised consumer protection rules
providing for a high standard of protection throughout the whole of the
European Union. In cross-border transactions between traders, negotiations
about the applicable law could run more smoothly, as the contracting parties
would have the opportunity to agree on the use of the Common European Sales Law
– equally accessible to both of them – to govern their contractual
relationship.

As a direct consequence, traders could save
on the additional contract law related transaction costs and could operate in a
less complex legal environment for cross-border trade on the basis of a single
set of rules across the European Union. Thus, traders would be able to take
better advantage of the internal market by expanding their trade across borders
and, consequently, competition in the internal market would increase. Consumers
would benefit from better access to offers from across the European Union at
lower prices and would face fewer refusals of sales. They would also enjoy more
certainty about their rights when shopping cross-border on the basis of a
single set of mandatory rules which offer a high level of consumer protection.

General context

With its Communication of 2001,[5]
the Commission launched a process of extensive public consultation on the
fragmented legal framework in the area of contract law and its hindering
effects on cross-border trade. In July 2010, the Commission launched a public
consultation by publishing a 'Green Paper on policy options for progress
towards a European contract law for consumers and businesses'[6]
(Green Paper), which set out different policy options on how to strengthen the
internal market by making progress in the area of European contract law.

In response to the Green Paper, the
European Parliament issued a Resolution on 8 June 2011 in which it expressed
its strong support for an instrument which would improve the establishment and
the functioning of the internal market and bring benefits to traders, consumers
and Member States' judicial systems.

The Commission Communication 'Europe 2020'[7]
recognises the need to make it easier and less costly for traders and consumers
to conclude contracts with partners in other Member States, notably by making
progress towards an optional European contract law. The Digital Agenda for
Europe[8] envisages an optional
instrument in European contract law to overcome the fragmentation of contract
law and boost consumer confidence in e-commerce.

·
Existing provisions in the area of the proposal

There are significant differences between
the contract laws in the Member States. The Union initially started to regulate
in the field of contract law by means of minimum harmonisation Directives
adopted in the field of consumer protection law. The minimum harmonisation
approach meant that Member States had the possibility to maintain or introduce
stricter mandatory requirements than those provided for in the acquis. In
practice, this approach has led to divergent solutions in the Member States
even in areas which were harmonised at Union level. In contrast, the recently
adopted Consumer Rights Directive fully harmonises the areas of pre-contractual
information to be given to consumers, the consumer's right of withdrawal in
distance and off-premises contracts, as well as certain aspects of delivery of
goods and passing of risk.

In respect of relations between traders,
the Union has regulated the area of combating late payments by setting up rules
on minimum interest rates. At international level, the Vienna Convention on
International Sales of Goods (the Vienna Convention) applies by default
whenever the parties have not chosen to apply another law. The Vienna
Convention regulates certain aspects in contracts of sales of goods but leaves
important matters outside its scope, such as defects in consent, unfair
contract terms and prescription. Further limitations to its applicability arise
as not all Member States have signed the Vienna Convention[9]
and there is no mechanism which could ensure its uniform interpretation.

Some Union legislation is relevant for both
business-to-consumer and business-to-business relations. The E-commerce
Directive[10] contains rules on the
validity of contracts concluded by electronic means and on certain
pre-contractual requirements.

In the field of private international law,
the Union has adopted instruments on choice of law, in particular Regulation
(EC) No 593/2008 of the European Parliament and of the Council of 17 June 2008
on the law applicable to contractual obligations (Rome I)[11],
and, in relation to pre-contractual information duties, Regulation (EC) No
864/2007 of the European Parliament and of the Council of 11 July 2007 on the
law applicable to non-contractual obligations (Rome II)[12].
The first of those instruments sets out rules for determining the applicable
law in the area of contractual obligations and the second in the field of
non-contractual obligations, including those which arise from pre-contractual
statements.

The Rome I Regulation and Rome II
Regulation will continue to apply and will be unaffected by the proposal. It
will still be necessary to determine the applicable law for cross-border
contracts. This will be done by the normal operation of the Rome I Regulation.
It can be determined by the parties themselves (Article 3 of the Rome I
Regulation) and, if they do not do so, this will be done on the basis of the
default rules in Article 4 of the Rome I Regulation. As regards consumer
contracts, under the conditions of Article 6(1) of the Rome I Regulation, if
the parties have not chosen the applicable law, that law is the law of the
habitual residence of the consumer.

The Common European Sales Law will be a
second contract law regime within the national law of each Member State. Where
the parties have agreed to use the Common European Sales Law, its rules will be
the only national rules applicable for matters falling within its scope. Where
a matter falls within the scope of the Common European Sales Law, there is thus
no scope for the application of any other national rules. This agreement to use
the Common European Sales Law is a choice between two different sets of sales
law within the same national law and does therefore not amount to, and must not
be confused with, the previous choice of the applicable law within the meaning
of private international law rules.

Since the Common European Sales Law will
not cover every aspect of a contract (e.g. illegality of contracts,
representation) the existing rules of the Member State's civil law that is
applicable to the contract will still regulate such residual questions.

Under the normal operation of the Rome I
Regulation there are however restrictions to the choice of law for business-to-consumer
transactions. If the parties choose in business-to-consumer transactions the
law of another Member State than the consumer's law, such a choice may under
the conditions of Article 6(1) of the Rome I Regulation not deprive the
consumer of the protection of the mandatory provisions of the law of his
habitual residence (Article 6 (2) of the Rome I Regulation). The latter
provision however can have no practical importance if the parties have chosen
within the applicable national law the Common European Sales Law. The reason is
that the provisions of the Common European Sales Law of the country's law
chosen are identical with the provisions of the Common European Sales Law of
the consumer's country. Therefore the level of the mandatory consumer protection
laws of the consumer's country is not higher and the consumer is not deprived
of the protection of the law of his habitual residence.

·
Consistency with the other policies and
objectives of the Union

This proposal is consistent with the
objective of attaining a high level of consumer protection as it contains
mandatory rules of consumer protection from which the parties cannot derogate
to the detriment of the consumer. Furthermore, the level of protection of these
mandatory provisions is equal or higher than the current acquis.

The proposal is also consistent with the
Union policy of helping SME benefit more from the opportunities offered by the
internal market. The Common European Sales Law can be chosen in contracts
between traders where at least one of them is an SME, drawing upon the
Commission Recommendation 2003/361[13] concerning the
definition of micro, small and medium-sized enterprises while taking into
account future developments.

Finally, the proposal is consistent with
the international trade policy of the Union, in that it does not discriminate
against parties from third countries who could also choose to apply the Common
European Sales Law as long as one party to the contract is established in a
Member State.

This proposal is without prejudice to
future Commission initiatives concerning the liability for infringements of the
Treaty on the functioning of the European Union, for example relating to the
competition rules.

2.         RESULTS OF CONSULTATIONS WITH
THE INTERESTED PARTIES AND IMPACT ASSESSMENTS

·
Consultation of interested parties

With the publication of the Green Paper,
the Commission launched an extensive public consultation which closed on 31
January 2011. In response to the Green Paper consultation, the Commission
received 320 replies from all categories of stakeholders from across the Union.
Many respondents saw value in Option 1 (publication of the results of the
Expert Group) and Option 2 (a toolbox for the Union legislator). Option 4 (an
optional instrument of European contract law) received support either
independently or in combination with a toolbox from several Member States as
well as other stakeholders; provided that it fulfilled certain conditions, such
as a high level of consumer protection, and clarity and user-friendliness of
the provisions. One of the main concerns in the stakeholders' responses to the
Green Paper was the lack of clarity in relation to the substantive content of a
possible European contract law instrument. The Commission addressed this
concern by giving stakeholders the opportunity to comment on the Feasibility
Study developed by the Expert Group on a European contract law.

The Green Paper responses also expressed
preferences for the material scope of the instrument. As a result, the proposal
focuses on contracts for the sale of goods.

By a Decision of 26 April 2010,[14]
the Commission set up the Expert Group on European contract law. This Group was
tasked with developing a Feasibility Study on a possible future European
contract law instrument covering the main aspects which arose in practice in
cross-border transactions.

A key stakeholder group (businesses and
consumer associations, representatives of the banking and insurance sectors and
of the legal professions of lawyers and notaries) was set up in September 2010 with
the purpose of giving practical input to the Expert Group on the
user-friendliness of the rules developed for the Feasibility Study. The
Feasibility Study was published on 3 May 2011 and an informal consultation was
open until 1 July 2011.

·
Impact Assessment

The Impact Assessment (IA) analysed the
seven policy options set out in the Green Paper; the IA Report contains the
full description and analysis of these options.

These options were: the baseline scenario
(no policy change), a toolbox for the legislator, a Recommendation on a Common
European Sales Law, a Regulation setting up an optional Common European Sales
Law, a Directive (full or minimum harmonisation) on a mandatory Common European
Sales Law, a Regulation establishing a European contract law and a Regulation
establishing a European Civil Code.

On a comparative analysis of the impacts of
these options, the IA Report arrived at the conclusion that the options of an
optional uniform contract law regime, a full harmonisation Directive and a
Regulation establishing a mandatory uniform contract law regime would meet the
policy objectives. While the latter two would considerably reduce transaction
costs for traders and offer a less complex legal environment for those wishing
to trade cross-border, these options would however also create a considerable
burden for traders as those who only traded domestically would also need to
adapt to a new legislative framework. The costs attached to familiarise
themselves with such a new mandatory law would be particularly significant when
compared to an optional uniform contract law regime, because they would impact
upon all traders. An optional uniform contract law regime would on the other
hand only create one-off costs for those traders wishing to use it for their
cross-border trade. The establishment of an optional uniform contract law
regime was therefore reasoned to be the most proportionate action as it would
reduce transaction costs experienced by traders exporting to several Member
States and give consumers more product choice at a lower price. It would also,
at the same time increase the level of consumer protection offered to consumers
who shopped across a border thereby creating confidence as they would
experience the same set of rights across the Union.

3.           LEGAL ELEMENTS OF THE PROPOSAL

·
Summary of the proposed action

The Proposal provides for the establishment
of a Common European Sales Law. It harmonises the national contract laws of the
Member States not by requiring amendments to the pre-existing national contract
law, but by creating within each Member State's national law a second contract
law regime for contracts covered by its scope that is identical throughout the
European Union and will exist alongside the pre-existing rules of national
contract law. The Common European Sales Law will apply on a voluntary basis,
upon an express agreement of the parties, to a cross-border contract.

·
Legal basis

This proposal is based on Article 114
Treaty on the Functioning of the European Union (TFEU).

The proposal provides for a single uniform
set of fully harmonised contract law rules including consumer protection rules
in the form of a Common European Sales Law which is to be considered as a
second contract law regime within the national law of each Member State available
in cross-border transactions upon a valid agreement by the parties. This
agreement does not amount to, and must not be confused with, a choice of the
applicable law within the meaning of private international law rules. Instead,
this choice is made within a national law which is applicable according to the
private international law rules.

This solution has as its objective the
establishment and the functioning of the internal market. It would remove
obstacles to the exercise of fundamental freedoms which result from differences
between national laws, in particular from the additional transaction costs and
perceived legal complexity experienced by traders when concluding cross-border
transactions and the lack of confidence in their rights experienced by
consumers when purchasing from another EU country - all of which have a direct
effect on the establishment and functioning of the internal market and limit
competition.

In accordance with Article 114 (3) TFEU,
the Common European Sales Law would guarantee a high level of consumer
protection by setting up its own set of mandatory rules which maintain or
improve the level of protection that consumers enjoy under the existing EU
consumer law.

·
Subsidiarity principle

The proposal complies with the subsidiarity
principle as set out in Article 5 of the Treaty on
European Union (TEU).

The objective of the proposal – i.e. to contribute to the proper functioning of the internal market by
making available a voluntary uniform set of contract law rules – has a clear cross-border dimension and cannot be sufficiently
achieved by the Member States in the framework of their national systems.

As long as differences of national contract
laws continue to create significant additional transaction costs for
cross-border transactions, the objective of completing the internal market by
facilitating the expansion of cross-border trade for traders and cross-border
purchases for consumers cannot be fully achieved.

By adopting un-coordinated measures at the
national level, Member States will not be able to remove the additional
transaction costs and legal complexity stemming from differences in national
contract laws that traders experience in cross-border trade in the EU.
Consumers will continue to experience reduced choice and limited access to
products from other Member States. They will also lack the confidence which
comes from knowledge of their rights.

The objective of the proposal could
therefore be better achieved by action at Union level,
in accordance with the principle of subsidiarity. The
Union is best placed to address the problems of legal fragmentation by a
measure taken in the field of contract law which approximates the rules
applicable to cross-border transactions. Furthermore, as market trends evolve
and prompt Member States to take action independently, for example in
regulating the emerging digital content market, regulatory divergences leading
to increased transaction costs and gaps in the protection of consumers are
likely to grow.

·
Proportionality principle

The proposal complies with the principle of
proportionality as set out in Article 5 TEU.

The scope of the proposal is confined to
the aspects which pose real problems in cross-border transactions and does not
extend to aspects which are best addressed by national laws. In respect of the
material scope, the proposal contains provisions regulating the rights and
obligations of the parties during the life-cycle of the contract, but it does
not touch for example, upon the rules on representation which are less likely
to become litigious. In terms of territorial scope, the proposal covers
cross-border situations where the problems of additional transactions costs and
legal complexity arise. Finally, the personal scope of the proposal is limited
to transactions where the internal market problems are mainly found, i.e.
business-to-business relations where at least one of the parties is an SME and
business-to-consumer relations. Contracts concluded between private individuals
and contracts between traders none of which is an SME are not included, as
there is no demonstrable need for action for these types of cross-border
contracts. The Regulation leaves Member States two options: to decide to make
the Common European Sales Law also available to parties for use in an entirely
domestic setting and to contracts concluded between traders neither of which is
an SME.

The proposal is a proportionate action,
when compared to other possible solutions analysed, because of the optional and
voluntary nature of the Common European Sales Law. This means that its
application is dependent upon an agreement by the parties to a contract
whenever it is jointly considered beneficial for a particular cross-border
transaction. The fact that the Common European Sales Law represents an optional
set of rules applying only in cross-border cases means also that it can lower
barriers to cross-border trade without interfering with deeply embedded
national legal systems and traditions. The Common European Sales Law will be an
optional regime in addition to pre-existing contract law rules without
replacing them. Thus the legislative measure will only go as far as necessary
to create further opportunities for traders and consumers in the single market.

·
Choice of instruments

The instrument chosen for this initiative
is a Regulation on an optional Common European Sales Law.

A non-binding instrument such as a toolbox
for the EU legislator or a Recommendation addressed to Member States would not
achieve the objective to improve the establishment and functioning of the
internal market. A Directive or a Regulation replacing national laws with a
non-optional European contract law would go too far as it would require
domestic traders who do not want to sell across borders to bear costs which are
not outweighed by the cost savings that only occur when cross-border
transactions take place. In addition, a Directive setting up minimum standards
of a non-optional European contract law would not be appropriate since it would
not achieve the level of legal certainty and the necessary degree of uniformity
to decrease the transaction costs.

4.           BUDGETARY IMPLICATION

After the adoption of the proposal, the
Commission will set up a database for the exchange of information concerning
final judgments referring to the Common European Sales Law or any other
provision of the Regulation, as well as relevant judgements of the Court of
Justice of the European Union. The costs associated with this data-base are
likely to grow as more final judgments become available. At the same time, the
Commission will organise training sessions for legal practitioners using the Common
European Sales Law[15]. These costs are likely
to decrease with time, as knowledge about how the Common European Sales Law
works spreads.

5.           ADDITIONAL
INFORMATION

·
Simplification

The proposal for an optional second
contract law regime has the advantage that, without replacing the national
contract laws in the Member States, it allows parties to use one single set of
contract law rules across the EU. This self-standing, uniform set of rules has
the potential of offering parties a solution to the most prevalent problems
which could arise in cross-border situations in relation to contract law.
Therefore, for traders this option would eliminate the need for research of
different national laws. To help consumers understand their rights in the Common
European Sales Law, a standard information notice would be presented to them
which would inform them about their rights.

Finally, the proposal has the potential of
ensuring the future coherence of the EU legislation in other policy areas where
contract law becomes relevant.

·
Review clause

The proposal provides for a review of the
application of the Common European Sales Law or any other provision of the
Regulation 5 years after its date of application, taking into account, amongst
others, the need to extend further the scope in relation to
business-to-business contracts, market and technological developments in
respect of digital content and future developments of the Union acquis. For this
purpose, the Commission will submit a report, if necessary accompanied by
proposals to amend the Regulation, to the European Parliament, the Council and
the European Economic and Social Committee.

·
European Economic Area

The proposed Regulation concerns an EEA
matter and should therefore extend to the EEA.

·
Explanation of the proposal

The proposal consists of three main parts:
a Regulation, Annex I to the Regulation containing the contract law rules (the Common
European Sales Law) and Annex II containing a Standard Information Notice.

A. The Regulation

Article 1
sets out the objective and subject matter of the Regulation.

Article 2
contains a list of definitions for terms used in the Regulation. While some
definitions already exist in the relevant acquis, others are concepts defined
here for the first time.

Article 3
explains the optional nature of the contract law rules in cross-border
contracts for sale of goods, supply of digital content and provision of related
services.

Article 4
sets out the territorial scope of the Regulation which is limited to
cross-border contracts.

Article 5
states the material scope of contracts for sale of goods and supply of digital
content and related services, such as installation and repair.

Article 6
excludes mixed-purposes contracts and instalment sales from the scope of
application.

Article 7
describes the personal scope of application which extends to
business-to-consumer and those business-to-business contracts where at least
one party is an SME.

Article 8
explains that the choice for the Common European Sales Law requires an
agreement of the parties to that effect. In contracts between a business and a
consumer, the choice of the Common European Sales Law is valid only if the
consumer's consent is given by an explicit statement separate from the
statement indicating the agreement to conclude a contract.

Article 9
contains several information requirements about the Common European Sales Law
in contracts between a trader and a consumer. In particular the consumer shall
receive the information notice in Annex II.

Article 10 requires
Member States to ensure that there are sanctions in place for breaches by the
traders of the duty to comply with the special requirements established by
Articles 8 and 9.

Article 11
explains that as a consequence of the valid choice of the Common European Sales
Law this is the only applicable law for the matters addressed in its rules and
that consequently other national rules do not apply for matters falling within
its scope. The choice of the Common European Sales Law operates retroactively
to cover compliance with and remedies for failure to comply with the
pre-contractual information duties.

Article 12
clarifies that the Regulation is without prejudice to the information
requirements of Directive 2006/123/EC on services in the internal market[16].

Article 13
presents the possibility for Member States to enact legislation which makes the
Common European Sales Law available to parties for use in an entirely domestic
setting and for contracts between traders, neither of which is an SME.

Article 14
requires Member States to notify final judgments of their courts which give an
interpretation of the provisions of the Common European Sales Law or any other
provision of the Regulation. The Commission will set up a database of such
judgments.

Article 15
contains a review clause.

Article 16
provides that the Regulation will enter into force on the twentieth day
following that of its publication in the Official Journal of the European
Union.

B. Annex I

Annex I contains the text of the Common
European Sales Law.

Part I 'Introductory
provisions' sets out the general principles of contract law which all
parties need to observe in their dealings, such as good faith and fair dealing.
The principle of freedom of contract also assures parties that, unless rules
are explicitly designated as mandatory, for example rules of consumer
protection, they can deviate from the rules of the Common European Sales Law.

Part II 'Making a binding contract' contains provisions on the parties' right to receive essential
pre-contractual information and rules on how agreements are concluded between
two parties. This part also contains specific provisions which give consumers a
right to withdraw from distance and off-premises contracts. Finally it includes
provisions on avoidance of contracts resulting from mistake, fraud, threat or
unfair exploitation.

Part III 'Assessing what is in the
contract' makes general provisions for how contract
terms need to be interpreted in case of doubt. It also contains rules on the
content and effects of contracts as well as which contract terms may be unfair
and are therefore invalid.

Part IV 'Obligations and remedies of the
parties to a sales contract' looks closely at the
rules specific to sales contracts and contracts for the supply of digital
content which contain the obligations of the seller and of the buyer. This part
also contains rules on the remedies for non-performance of buyers and sellers.

Part V 'Obligations and remedies of the
parties to a related services contract' concerns
cases where a seller provides, in close connection to a contract of sale of
goods or supply of digital content, certain services such as installation,
repair or maintenance. This part explains what specific rules apply in such a
situation, in particular what the parties' rights and obligations under such
contracts are.

Part VI 'Damages and interest' contains supplementary common rules on damages for loss and on
interest to be paid for late payment.

Part VII 'Restitution' explains the rules which apply on what must be returned when a
contract is avoided or terminated.

Part VIII 'Prescription' regulates the effects of the lapse of time on the exercise of
rights under a contract.

Appendix 1 contains
the Model instruction on withdrawal that must be provided by the trader to the
consumer before a distance or an off-premises contract is concluded, while Appendix
2 provides for a Model withdrawal form.

C. Annex II

Annex II comprises the Standard Information
Notice on the Common European Sales Law that must be provided by the trader to
the consumer before an agreement to use of the Common European Sales Law is
made.

2011/0284 (COD)

Proposal for a

REGULATION OF THE EUROPEAN PARLIAMENT
AND OF THE COUNCIL

on a Common European Sales Law

THE EUROPEAN PARLIAMENT AND THE
COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the
European Commission,

After transmission of the draft legislative
act to the national Parliaments,

Having regard to the opinion of the
European Economic and Social Committee[17],

Having regard to the opinion of the
Committee of the Regions[18],

Acting in accordance with the ordinary
legislative procedure,

Whereas:

(1)
There are still considerable bottlenecks to
cross-border economic activity that prevent the internal market from exploiting
its full potential for growth and job creation. Currently, only one in ten traders
in the Union exports goods within the Union and the majority of those who do,
only export to a small number of Member States. From the range of obstacles to
cross-border trade including tax regulations, administrative requirements,
difficulties in delivery, language and culture, traders consider the difficulty
in finding out the provisions of a foreign contract law among the top barriers
in business-to-consumer transactions and in business-to-business transactions.
This also leads to disadvantages for consumers due to limited access to goods.
Different national contract laws therefore deter the exercise of fundamental
freedoms, such as the freedom to provide goods and services, and represent a
barrier to the functioning and continuing establishment of the internal market.
They also have the effect of limiting competition, particularly in the markets
of smaller Member States.

(2)
Contracts are the indispensable legal tool for
every economic transaction. However, the need for traders to identify or
negotiate the applicable law, to find out about the provisions of a foreign
applicable law often involving translation, to obtain legal advice to make themselves
familiar with its requirements and to adapt their contracts to different
national laws that may apply in cross-border dealings makes cross-border trade
more complex and costly compared to domestic trade. Contract-law-related
barriers are thus a major contributing factor in dissuading a considerable
number of export-oriented traders from entering cross-border trade or expanding
their operations into more Member States. Their deterrent effect is
particularly strong for small and medium-sized enterprises (SME) for which the
costs of entering multiple foreign markets are often particularly high in
relation to their turnover. As a consequence, traders miss out on cost savings
they could achieve if it were possible to market goods and services on the
basis of one uniform contract law for all their cross-border transactions and,
in the online environment, one single web-site.

(3)
Contract law related transaction costs which
have been shown to be of considerable proportions and legal obstacles stemming
from the differences between national mandatory consumer protection rules have
a direct effect on the functioning of the internal market in relation to business–to–consumer
transactions. Pursuant to Article 6 of Regulation 593/2008 of the European
Parliament and of the Council of 17 June 2008 on the law applicable to
contractual obligations (Regulation (EC) No 593/2008),[19]
whenever a trader directs its activities to consumers in another Member State
the consumer protection provisions of the Member State of the consumer's
habitual residence that provide a higher level of protection and cannot be
derogated from by agreement by virtue of that law will apply, even where
another applicable law has been chosen by the parties. Therefore, traders need
to find out in advance whether the consumer's law provides higher protection
and ensure that their contract is in compliance with its requirements. In
addition, in e-commerce, web-site adaptations which need to reflect mandatory
requirements of applicable foreign consumer contract laws entail further costs.
The existing harmonisation of consumer law at Union level has led to a certain
approximation in some areas. However the differences between Member States'
laws remain substantial; existing harmonisation leaves Member States a broad
range of options on how to comply with the requirements of Union legislation
and where to set the level of consumer protection.

(4)
The contract-law-related barriers which prevent
traders from fully exploiting the potential of the internal market also work to
the detriment of consumers. Less cross-border trade results in fewer imports
and less competition. Consumers may be disadvantaged by a limited choice of
goods at higher prices both because fewer foreign traders offer their products
and services directly to them and also indirectly as a result of restricted
cross-border business-to-business trade at the wholesale level. While
cross-border shopping could bring substantial economic advantages in terms of
more and better offers, many consumers are also reluctant to engage in
cross-border shopping, because of the uncertainty about their rights. Some of
the main consumer concerns are related to contract law, for instance whether
they would enjoy adequate protection in the event of purchasing defective
products. As a consequence, a substantial number of consumers prefer to shop
domestically even if this means they have less choice or pay higher prices.

(5)
In addition, those consumers who want to benefit
from price differences between Member States by purchasing from a trader from
another Member State are often hindered due to a trader's refusal to sell.
While e-commerce has greatly facilitated the search for offers as well as the
comparison of prices and other conditions irrespective of where a trader is
established, orders by consumers from abroad are very frequently refused by
traders which refrain from entering into cross-border transactions.

(6)
Differences in national contract laws therefore
constitute barriers which prevent consumers and traders from reaping the
benefits of the internal market. Those contract-law-related barriers would be
significantly reduced if contracts could be based on a single uniform set of
contract law rules irrespective of where parties are established. Such a uniform
set of contract law rules should cover the full life cycle of a contract and
thus comprise the areas which are the most important when concluding contracts.
It should also include fully harmonised provisions to protect consumers.

(7)
The differences between national contract laws
and their effect on cross-border trade also serve to limit competition. With a
low level of cross-border trade, there is less competition, and thus less
incentive for traders to become more innovative and to improve the quality of
their products or to reduce prices. Particularly in smaller Member States with
a limited number of domestic competitors, the decision of foreign traders to
refrain from entering these markets due to costs and complexity may limit
competition, resulting in an appreciable impact on choice and price levels for
available products. In addition, the barriers to cross-border trade may
jeopardise competition between SME and larger companies. In view of the
significant impact of the transaction costs in relation to turnover, an SME is
much more likely to refrain from entering a foreign market than a larger
competitor.

(8)
To overcome these contract-law-related barriers,
parties should have the possibility to agree that their contracts
should be governed by a single uniform set of contract law         rules with
the same meaning and interpretation in all Member States, a Common Sales         Law.
The Common European Sales Law should represent an additional option increasing
the choice available to parties and open to use whenever jointly considered to
be helpful in order to facilitate cross-border trade and reduce transaction and
opportunity costs as well as other contract-law-related obstacles to cross-border
trade. It should become the basis of a contractual relationship only where
parties jointly decide to use it.

(9)
This Regulation establishes a Common European
Sales Law. It harmonises the contract laws of the Member States not by
requiring amendments to the pre-existing national contract law, but by creating
within each Member State's national law a second contract law regime for
contracts within its scope. This second regime should be identical throughout
the Union and exist alongside the pre-existing rules of national contract law.
The Common European Sales Law should apply on a voluntary basis, upon an
express agreement of the parties, to a cross-border contract.

(10)
The agreement to use the Common European Sales
Law should be a choice exercised within the scope of the respective national
law which is applicable pursuant to Regulation (EC) No 593/2008 or, in relation
to pre-contractual information duties, pursuant to Regulation (EC) No 864/2007
of the European Parliament and of the Council of 11 July 2007 on the law
applicable to non-contractual obligations (Regulation (EC) No 864/2007)[20],
or any other relevant conflict of law rule. The agreement to use the Common
European Sales Law should therefore not amount to, and not be confused with, a
choice of the applicable law within the meaning of the conflict-of-law rules
and should be without prejudice to them. This Regulation will therefore not
affect any of the existing conflict of law rules.

(11)
The Common European Sales Law should comprise of
a complete set of fully harmonised mandatory consumer protection rules. In line
with Article 114(3) of the Treaty, those rules should guarantee a high level of
consumer protection with a view to enhancing consumer confidence in the Common
European Sales Law and thus provide consumers with an incentive to enter into
cross-border contracts on that basis. The rules should maintain or improve the
level of protection that consumers enjoy under Union consumer law.

(12)
Since the Common European Sales Law contains a
complete set of fully harmonised mandatory consumer protection rules, there
will be no disparities between the laws of the Member States in this area,
where the parties have chosen to use the Common European Sales Law. Consequently,
Article 6(2) Regulation (EC) No 593/2008, which is predicated on the existence
of differing levels of consumer protection in the Member States, has no
practical importance for the issues covered by the Common European Sales Law.

(13)
The Common European Sales Law should be
available for cross-border contracts, because it is in that context that the
disparities between national laws lead to complexity and additional costs and
dissuade parties from entering into contractual relationships. The cross-border
nature of a contract should be assessed on the basis of the habitual residence
of the parties in business-to-business contracts. In a business-to-consumer
contract the cross-border requirement should be met where either the general
address indicated by the consumer, the delivery address for the goods or the
billing address indicated by the consumer are located in a Member State, but
outside the State where the trader has its habitual residence.

(14)
The use of the Common European Sales Law should
not be limited to cross-border situations involving only Member States, but
should also be available to facilitate trade between Member States and third
countries. Where consumers from third countries are involved, the agreement to
use the Common European Sales Law, which would imply the choice of a foreign
law for them, should be subject to the applicable conflict-of-law rules.

(15)
Traders engaging in purely domestic as well as
in cross-border trade transactions may also find it useful to make use of a
single uniform contract for all their transactions. Therefore Member States
should be free to decide to make the Common European Sales Law available to
parties for use in an entirely domestic setting.

(16)
The Common European Sales Law should be
available in particular for the sale of movable goods, including the
manufacture or production of such goods, as this is the economically single
most important contract type which could present a particular potential for
growth in cross-border trade, especially in e-commerce.

(17)
In order to reflect the increasing importance of
the digital economy, the scope of the Common European Sales Law should also
cover contracts for the supply of digital content. The transfer of digital
content for storage, processing or access, and repeated use, such as a music
download, has been growing rapidly and holds a great potential for further
growth but is still surrounded by a considerable degree of legal diversity and
uncertainty. The Common European Sales Law should therefore cover the supply of
digital content irrespective of whether or not that content is supplied on a
tangible medium.

(18)
Digital content is often supplied not in
exchange for a price but in combination with separate paid goods or services,
involving a non-monetary consideration such as giving access to personal data
or free of charge in the context of a marketing strategy based on the
expectation that the consumer will purchase additional or more sophisticated
digital content products at a later stage. In view of this specific market
structure and of the fact that defects of the digital content provided may harm
the economic interests of consumers irrespective of the conditions under which
it has been provided, the availability of the Common European Sales Law should
not depend on whether a price is paid for the specific digital content in
question.

(19)
With a view to maximising the added value of the
Common European Sales Law its material scope should also include certain
services provided by the seller that are directly and closely related to
specific goods or digital content supplied on the basis of the Common European
Sales Law, and in practice often combined in the same or a linked contract at
the same time, most notably repair, maintenance or installation of the goods or
the digital content.

(20)
The Common European Sales Law should not cover
any related contracts by which the buyer acquires goods or is supplied with a
service, from a third party. This would not be appropriate because the third
party is not part of the agreement between the contracting parties to use the
rules of the Common European Sales Law. A related contract with a third party
should be governed by the respective national law which is applicable according
pursuant to Regulations (EC) No 593/2008 and (EC) No 864/2007 or any other
relevant conflict of law rule.

(21)
In order to tackle the existing internal market
and competition problems in a targeted and proportionate fashion, the personal
scope of the Common European Sales Law should focus on parties who are
currently dissuaded from doing business abroad by the divergence of national
contract laws with the consequence of a significant adverse impact on
cross-border trade. It should therefore cover all business-to consumer
transactions and contracts between traders where at least one of the parties is
an SME drawing upon Commission Recommendation 2003/361 of 6 May 2003 concerning
the definition of micro, small and medium-sized enterprises.[21]
This should, however, be without prejudice to the possibility for Member States
to enact legislation which makes the Common European Sales Law available for
contracts between traders, neither of which is an SME. In any case, in business-to-business transactions, traders
enjoy full freedom of contract and are encouraged to draw inspiration from the
Common European Sales Law in the drafting of their contractual terms.

(22)
The agreement of the parties to a contract is
indispensable for the application of the Common European Sales Law. That
agreement should be subject to strict requirements in business-to-consumer
transactions. Since, in practice, it will usually be the trader who proposes
the use of the Common European Sales Law, consumers must be fully aware of the
fact that they are agreeing to the use of rules which are different from those
of their pre-existing national law. Therefore, the consumer's consent to use
the Common European Sales Law should be admissible only in the form of an
explicit statement separate from the statement indicating the agreement to the
conclusion of the contract. It should therefore not be possible to offer the
use of the Common European Sales Law as a term of the contract to be concluded,
particularly as an element of the trader's standard terms and conditions. The
trader should provide the consumer with a confirmation of the agreement to use
the Common European Sales Law on a durable medium.

(23)
In addition to being a conscious choice, the
consent of a consumer to the use of the Common European Sales Law should be an
informed choice. The trader should therefore not only draw the consumer's
attention to the intended use of the Common European Sales Law but should also
provide information on its nature and its salient features. In order to
facilitate this task for traders, thereby avoiding unnecessary administrative
burdens, and to ensure consistency in the level and the quality of the information
communicated to consumers, traders should supply consumers with the standard
information notice provided for in this Regulation and thus readily available
in all official languages in the Union. Where it is not possible to supply the
consumer with the information notice, for example in the context of a telephone
call, or where the trader has failed to provide the information notice, the
agreement to use the Common European Sales Law should not be binding on the
consumer until the consumer has received the information notice together with
the confirmation of the agreement and has subsequently expressed consent.

(24)
In order to avoid a selective application of
certain elements of the Common European Sales Law, which could disturb the
balance between the rights and obligations of the parties and adversely affect
the level of consumer protection, the choice should cover the Common European
Sales Law as a whole and not only certain parts of it.

(25)
Where the United Nations Convention on Contracts
for the International Sale of Goods would otherwise apply to the contract in
question, the choice of the Common European Sales Law should imply an agreement
of the contractual parties to exclude that Convention.

(26)
The rules of the Common European Sales Law
should cover the matters of contract law that are of practical relevance during
the life cycle of the types of contracts falling within the material and
personal scope, particularly those entered into online. Apart from the rights
and obligations of the parties and the remedies for non-performance, the Common
European Sales Law should therefore govern pre-contractual information duties,
the conclusion of a contract including formal requirements, the right of
withdrawal and its consequences, avoidance of the contract resulting from a
mistake, fraud, threats or unfair exploitation and the consequences of such
avoidance, interpretation, the contents and effects of a contract, the
assessment and consequences of unfairness of contract terms, restitution after
avoidance and termination and the prescription and preclusion of rights. It
should settle the sanctions available in case of the breach of all the
obligations and duties arising under its application.

(27)
All the matters of a contractual or
non-contractual nature that are not addressed in the Common European Sales Law
are governed by the pre-existing rules of the national law outside the Common
European Sales Law that is applicable under Regulations (EC) No 593/2008 and
(EC) No 864/2007 or any other relevant conflict of law rule. These issues
include legal personality, the invalidity of a contract arising from lack of
capacity, illegality or immorality, the determination of the language of the
contract, matters of non-discrimination, representation, plurality of debtors
and creditors, change of parties including assignment, set-off and merger,
property law including the transfer of ownership, intellectual property law and
the law of torts. Furthermore, the issue of whether concurrent contractual and
non-contractual liability claims can be pursued together falls outside the
scope of the Common European Sales Law.

(28)
The Common European Sales Law should not govern
any matters outside the remit of contract law. This Regulation should be
without prejudice to the Union or national law in relation to any such matters.
For example, information duties which are imposed for the protection of health
and safety or environmental reasons should remain outside the scope of the Common
European Sales Law. This Regulation should further be without prejudice to the
information requirements of Directive 2006/123/EC of the European Parliament
and of the Council of 12 December 2006 on services in the internal market[22].

(29)
Once there is a valid agreement to use the Common
European Sales Law, only the Common European Sales Law should govern the
matters falling within its scope. The rules of the Common European Sales Law
should be interpreted autonomously in accordance with the well-established
principles on the interpretation of Union legislation. Questions concerning
matters falling within the scope of the Common European Sales Law which are not
expressly settled by it should be resolved only by interpretation of its rules
without recourse to any other law. The rules of the Common European Sales Law
should be interpreted on the basis of the underlying principles and objectives
and all its provisions.

(30)
Freedom of contract should be the guiding
principle underlying the Common European Sales Law. Party autonomy should be
restricted only where and to the extent that this is indispensable, in
particular for reasons of consumer protection. Where such a necessity exists,
the mandatory nature of the rules in question should be clearly indicated.

(31)
The principle of good faith and fair dealing
should provide guidance on the way parties have to cooperate. As some rules
constitute specific manifestations of the general principle of good faith and
fair dealing, they should take precedent over the general principle. The
general principle should therefore not be used as a tool to amend the specific
rights and obligations of parties as set out in the specific rules. The
concrete requirements resulting from the principle of good faith and fair
dealing should depend, amongst others, on the relative level of expertise of
the parties and should therefore be different in business-to-consumer
transactions and in business-to-business transactions. In transactions between
traders, good commercial practice in the specific situation concerned should be
a relevant factor in this context.

(32)
The Common European Sales Law should aim at the
preservation of a valid contract whenever possible and appropriate in view of
the legitimate interests of the parties.

(33)
The Common European Sales Law should identify
well-balanced solutions taking account the legitimate interests of the parties
in designating and exercising the remedies available in the case of
non-performance of the contract. In business-to-consumer contracts the system
of remedies should reflect the fact that the non-conformity of goods, digital
content or services falls within the trader's sphere of responsibility.

(34)
In order to enhance legal certainty by making
the case-law of the Court of Justice of the European Union and of national
courts on the interpretation of the Common European Sales Law or any other
provision of this Regulation accessible to the public, the Commission should
create a database comprising the final relevant decisions. With a view to
making that task possible, the Member States should ensure that such national
judgments are quickly communicated to the Commission.

(35)
It is also appropriate to review the functioning
of the Common European Sales Law or any other provision of this Regulation
after five years of operation. The review should take into account, amongst
other things, the need to extend further the scope in relation to
business-to-business contracts, market and
technological developments in respect of digital content and future developments
of the Union acquis.

(36)
Since the objective of this Regulation, namely
to contribute to the proper functioning of the internal market by making
available a uniform set of contract law rules that can be used for cross-border
transactions throughout the Union, cannot be sufficiently achieved by the
Member States and can therefore 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 the European Union. In
accordance with the principle of proportionality, as set out in that Article,
this Regulation does not go beyond what is necessary in order to achieve that
objective.

(37)
This Regulation respects the fundamental rights
and observes the principles recognised in particular by the Charter of
Fundamental Rights of the European Union and specifically Articles 16, 38 and
47 thereof,

HAVE ADOPTED THIS REGULATION:

Article 1
Objective and subject matter

1.
The purpose of this Regulation is to improve the
conditions for the establishment and the functioning of the internal market by
making available a uniform set of contract law rules as set out in Annex I ('the
Common European Sales Law'). These rules can be used for cross-border
transactions for the sale of goods, for the supply of digital content and for
related services where the parties to a contract agree to do so.

2.
This Regulation enables traders to rely on a
common set of rules and use the same contract terms for all their cross-border
transactions thereby reducing unnecessary costs while providing a high degree
of legal certainty.

3.
In relation to contracts between traders and
consumers, this Regulation comprises a comprehensive set of consumer protection
rules to ensure a high level of consumer protection, to enhance consumer
confidence in the internal market and encourage consumers to shop across borders.

Article 2
Definitions

For the purpose of this Regulation, the following definitions shall
apply:

(a)
‘contract’ means an agreement intended to give
rise to obligations or other legal effects;

(b)
‘good faith and fair dealing’ means a standard
of conduct characterised by honesty, openness and consideration for the
interests of the other party to the transaction or relationship in question;

(c)
’loss’ means economic loss and non-economic loss
in the form of pain and suffering, excluding other forms of non-economic loss
such as impairment of the quality of life and loss of enjoyment;

(d)
‘standard contract terms’ means contract terms
which have been drafted in advance for several transactions involving different
parties, and which have not been individually negotiated by the parties within
the meaning of Article 7 of the Common European Sales Law;

(e)
‘trader’ means any natural or legal person who
is acting for purposes relating to that person’s trade, business, craft, or
profession;

(f)
‘consumer’ means any natural person who is
acting for purposes which are outside that person's trade, business, craft, or
profession;

(g)
‘damages’ means a sum of money to which a person
may be entitled as compensation for loss, injury or damage;

(h)
‘goods’ means any tangible movable items; it
excludes:

(i) electricity and natural gas; and

(ii) water and other types of gas unless they are put up for sale in
a limited volume or set quantity;

(i)
'price’ means money that is due in exchange for
goods sold, digital content supplied or a related service provided;

(j)
‘digital content’ means data which are produced
and supplied in digital form, whether or not according to the buyer's
specifications, including video, audio, picture or written digital content, digital
games, software and digital content which makes it possible to personalise
existing hardware or software; it excludes:

(i) financial services, including online
banking services;

(ii) legal or financial advice provided in
electronic form;

(iii) electronic healthcare services;

(iv) electronic communications services and
networks, and associated facilities and services;

(v) gambling;

(vi) the creation of new digital content and
the amendment of existing digital content by consumers or any other interaction
with the creations of other users;

(k)
‘sales contract’ means any contract under which
the trader ('the seller') transfers or undertakes to transfer the ownership of
the goods to another person ('the buyer'), and the buyer pays or undertakes to
pay the price thereof; it includes a contract for the supply of goods to be
manufactured or produced and excludes contracts for sale on execution or
otherwise involving the exercise of public authority;

(l)
‘consumer sales contract’ means a sales contract
where the seller is a trader and the buyer is a consumer;

(m)
‘related service’ means any service related to
goods or digital content, such as installation, maintenance, repair or any
other processing, provided by the seller of the goods or the supplier of the
digital content under the sales contract, the contract for the supply of
digital content or a separate related service contract which was concluded at
the same time as the sales contract or the contract for the supply of digital
content; it excludes:

(i) transport services,

(ii) training services,

(iii) telecommunications support services; and

(iv) financial services;

(n)
‘service provider’ means a seller of goods or
supplier of digital content who undertakes to provide a customer with a service
related to those goods or that digital content;

(o)
‘customer’ means any person who purchases a
related service;

(p)
‘distance contract’ means any contract between
the trader and the consumer under an organised distance sales scheme concluded
without the simultaneous physical presence of the trader or, in case the trader
is a legal person, a natural person representing the trader and the consumer,
with the exclusive use of one or more means of distance communication up to and
including the time at which the contract is concluded;

(q)
‘off-premises contract’ means any contract
between a trader and a consumer:

(i) concluded in the simultaneous physical
presence of the trader or, where the trader is a legal person, the natural
person representing the trader and the consumer in a place which is not the
trader's business premises, or concluded on the basis of an offer made by the
consumer in the same circumstances; or

(ii) concluded on the trader's business
premises or through any means of distance communication immediately after the
consumer was personally and individually addressed in a place which is not the
trader's business premises in the simultaneous physical presence of the trader
or, where the trader is a legal person, a natural person representing the
trader and the consumer; or

(iii) concluded during an excursion organised
by the trader or, where the trader is a legal person, the natural person
representing the trader with the aim or effect of promoting and selling goods
or supplying digital content or related services to      the consumer;

(r)
‘business premises’ means:

(i) any immovable retail premises where a trader
carries out activity on a permanent basis, or

(ii) any movable retail premises where a trader
carries out activity on a usual basis;

(s)
‘commercial guarantee’ means any undertaking by
the trader or a producer to the consumer, in addition to legal obligations
under Article 106 in case of lack of conformity to reimburse the price paid or
to replace or repair, or service goods or digital content in any way if they do
not meet the specifications or any other requirements not related to conformity
set out in the guarantee statement or in the relevant advertising available at
the time of, or before the conclusion of the contract;

(t)
‘durable medium’ means any medium which enables
a party to store information addressed personally to that party in a way accessible
for future reference for a period of time adequate for the purposes of the
information and which allows the unchanged reproduction of the information
stored;

(u)
'public auction' means a method of sale where
goods or digital content are offered by the trader to the consumer who attends
or is given the possibility to attend the auction in person, through a
transparent, competitive bidding procedure run by an auctioneer and where the
successful bidder is bound to purchase the goods or digital content;

(v)
'mandatory rule' means any provision the
application of which the parties cannot exclude, or derogate from or the effect
of which they cannot vary;

(w)
'creditor' means a person who has a right to
performance of an obligation, whether monetary or non-monetary, by another
person, the debtor;

(x)
'debtor' means a person who has an obligation,
whether monetary or non-monetary, to another person, the creditor;

(y)
'obligation' means a duty to perform which one
party to a legal relationship owes to another party.

Article 3
Optional nature of the Common European Sales Law

The parties may agree that the Common
European Sales Law governs their cross-border contracts for the sale of goods,
for the supply of digital content and for the provision of related services
within the territorial, material and personal scope as set out in Articles 4 to
7.

Article 4
Cross-border contracts

1.
The Common European Sales Law may be used for
cross-border contracts.

2.
For the purposes of this Regulation, a contract
between traders is a cross-border contract if the parties have their habitual
residence in different countries of which at least one is a Member State.

3.
For the purposes of this Regulation, a contract
between a trader and a consumer is a cross-border contract if:

(a)
either the address indicated by the consumer,
the delivery address for goods or the billing address are located in a country other
than the country of the trader's habitual residence; and

(b)
at least one of these countries is a Member
State.

4.
For the purposes of this Regulation, the habitual
residence of companies and other bodies, corporate or unincorporated, shall be
the place of central administration. The habitual residence of a trader who is
a natural person shall be that person's principal place of business.

5.
Where the contract is concluded in the course of
the operations of a branch, agency or any other establishment of a trader, the
place where the branch, agency or any other establishment is located shall be
treated as the place of the trader's habitual residence.

6.
For the purpose of determining whether a
contract is a cross-border contract the relevant point in time is the time of
the agreement on the use of the Common European Sales Law.

Article 5
Contracts for which the Common European Sales Law
can be used

The Common European Sales Law may be used
for:

(a)          sales contracts;

(b)          contracts for the supply of
digital content whether or not supplied on a tangible
medium which can be stored, processed or accessed, and
re-used by the user, irrespective of whether the
digital content is supplied in exchange for the payment of a price.

(c)          related
service contracts, irrespective of whether a separate price was agreed for the related
service.

Article 6
Exclusion of mixed-purpose
contracts and contracts linked to a consumer
credit

1.
The Common European Sales Law may not be used
for mixed-purpose contracts including any elements
other than the sale of goods, the supply of digital content and the provision
of related services within the meaning of Article 5.

2.
The Common European Sales Law may not be used
for contracts between a trader and a consumer where the
trader grants or promises to grant to the consumer credit in the form of a
deferred payment, loan or other similar financial accommodation. The Common
European Sales Law may be used for contracts between a trader and a consumer
where goods, digital content or related services of the same kind are supplied
on a continuing basis and the consumer pays for such goods, digital content or related
services for the duration of the supply by means of instalments.

Article 7
Parties to the contract

1.
The Common European Sales Law may be used only
if the seller of goods or the supplier of digital content is a trader. Where all the parties to a contract are traders, the Common European
Sales Law may be used if at least one of those parties is a small or medium-sized enterprise ('SME').

2.
For the purposes of this Regulation, an SME is a trader which

(a)
employs fewer than 250 persons; and

(b)
has an annual turnover not exceeding EUR 50
million or an annual balance sheet total not exceeding EUR 43 million, or, for
an SME which has its habitual residence in a Member State whose currency is not
the euro or in a third country, the equivalent amounts in the currency of that
Member State or third country.

Article 8
Agreement on the use of the Common European Sales
Law

1.
The use of the Common European Sales Law
requires an agreement of the parties to that effect. The existence of such an
agreement and its validity shall be determined on the basis of paragraphs 2 and
3 of this Article and Article 9, as well as the relevant provisions in the Common
European Sales Law.

2.
In relations between a trader and a consumer the
agreement on the use of the Common European Sales Law shall be valid only if
the consumer's consent is given by an explicit statement which is separate from
the statement indicating the agreement to conclude a contract. The trader shall
provide the consumer with a confirmation of that agreement on a durable medium.

3.
In relations between a trader and a consumer the
Common European Sales Law may not be chosen partially, but only in its
entirety.

Article 9
Standard Information Notice in contracts
between a trader and a consumer

1.
In addition to the pre-contractual information
duties laid down in the Common European Sales Law, in relations between a
trader and a consumer the trader shall draw the consumer's attention to the
intended application of the Common European Sales Law before the agreement by
providing the consumer with the information notice in Annex II in a prominent
manner. Where the agreement to use the Common European Sales Law is concluded by
telephone or by any other means that do not make it possible to provide the
consumer with the information notice, or where the trader has failed to provide
the information notice, the consumer shall not be bound by the agreement until
the consumer has received the confirmation referred to in Article 8(2)
accompanied by the information notice and has expressly consented subsequently to
the use of the Common European Sales Law.

2.
The information notice referred to in paragraph
1 shall, if given in electronic form, contain a
hyperlink or, in all other circumstances, include the indication of a website
through which the text of the Common
European Sales Law can be obtained free of charge.

Article 10
Penalties for breach of  specific requirements

Member States shall lay
down penalties for breaches by traders in relations with consumers of the
requirements set out in Articles 8 and 9 and shall take all the measures
necessary to ensure that those penalties are applied. The penalties thus
provided shall be effective, proportionate and dissuasive. Member States shall
notify the relevant provisions to the Commission no later than [1 year after the date of application of this Regulation] and shall notify any subsequent changes as soon as possible.

Article 11
Consequences of the use of the Common European Sales
Law

Where the parties have validly agreed to
use the Common European Sales Law for a contract, only the Common European
Sales Law shall govern the matters addressed in its rules. Provided that the
contract was actually concluded, the Common European Sales Law shall also
govern the compliance with and remedies for failure to comply with the
pre-contractual information duties.

Article 12
Information requirements  resulting from the Services Directive

This Regulation is
without prejudice to the information requirements laid down by national laws
which transpose the provisions of Directive 2006/123/EC of the European
Parliament and of the Council of 12 December 2006 on services in the internal
market and which complement the information requirements laid down in the Common
European Sales Law.

Article 13

Member States' options

A Member State may decide to make the Common
European Sales Law available for:

(a)          contracts where the habitual
residence of the traders or, in the case of a contract between a trader and a
consumer, the habitual residence of the trader, the address indicated by the
consumer, the delivery address for goods and the billing address, are located
in that Member State; and/or

(b)          contracts where all the parties
are traders but none of them is an SME within the meaning of Article 7(2).

Article 14
Communication of judgments applying this Regulation

1.
Member States shall ensure that final judgments
of their courts applying the rules of this Regulation are communicated without
undue delay to the Commission.

2.
The Commission shall set up a system which
allows the information concerning the judgments referred to in paragraph 1 and
relevant judgements of the Court of Justice of the European Union to be
consulted. That system shall be accessible to the public.

Article 15
Review

1.
By ... [4 years after the date of application
of this Regulation], Member States shall provide the Commission with
information relating to the application of this Regulation, in particular on
the level of acceptance of the Common European Sales Law, the extent to which
its provisions have given rise to litigation and on the state of play
concerning differences in the level of consumer protection between the Common
European Sales Law and national law. That information shall include a
comprehensive overview of the case law of the national courts interpreting the
provisions of the Common European Sales Law.

2.
By ... [5 years after the date of application
of this Regulation], the Commission shall present to the European
Parliament, the Council and the Economic and Social Committee a detailed report
reviewing the operation of this Regulation, and taking account of, amongst others,
the need to extend the scope in relation to business-to-business contracts, market
and technological developments in respect of digital content and future
developments of the Union acquis.

Article 16
Entry into force and application

1.
This Regulation shall enter into force on the
20th day following that of its publication in the Official Journal of the
European Union.

2.
It shall apply from [ 6 months after its the
entry into force].

This Regulation shall be binding in its
entirety and directly applicable in the Member States.

Done at Brussels,

For the European Parliament                       For
the Council

The President                                                 The
President

ANNEX I
COMMON EUROPEAN SALES LAW

TABLE OF CONTENTS

Part I: Introductory provisions....................................................................................................... 4

Chapter 1: General principles and application
.......................................................4

Section 1: General principles......................................................................................................... 4

Section 2: Application................................................................................................................... 4

Part II: Making a binding contract.................................................................................................. 4

Chapter 2: Pre-contractual information.......................................................................................... 4

Section 1: Pre-contractual information to be
given by a trader dealing with a consumer................... 4

Section 2: Pre-contractual information to be
given by a trader dealing with another trader............... 4

Section 3: Contracts to be concluded by
electronic means.............................................................. 4

Section 4: Duty to ensure that information
supplied is correct.......................................................... 4

Section 5: Remedies for breach of information
duties...................................................................... 4

Chapter 3: Conclusion of contract................................................................................................. 4

Chapter 4: Right to withdraw in distance and
off-premises contracts between traders and consumers 4

Chapter 5: Defects in consent........................................................................................................ 4

Part III: Assessing what is in the contract....................................................................................... 4

Chapter 6: Interpretation............................................................................................................... 4

Chapter 7: Contents and effects..................................................................................................... 4

Chapter 8: Unfair contract terms.................................................................................................... 4

Section 1: General provisions........................................................................................................ 4

Section 2: Unfair contract terms in contracts
between a trader and a consumer............................... 4

Section 3: Unfair contract terms in contracts
between traders......................................................... 4

Part IV: Obligations and remedies of the
parties to a sales contract or a contract for the supply of digital content 4

Chapter 9: General provisions....................................................................................................... 4

Chapter 10: The seller's obligations................................................................................................ 4

Section 1: General provisions........................................................................................................ 4

Section 2: Delivery........................................................................................................................ 4

Section 3: Conformity of the goods and
digital content................................................................... 4

Chapter 11: The buyer’s remedies................................................................................................. 4

Section 1: General provisions........................................................................................................ 4

Section 2: Cure by the seller.......................................................................................................... 4

Section 3: Requiring performance.................................................................................................. 4

Section 4: Withholding performance of buyer’s
obligations............................................................. 4

Section 5: Termination................................................................................................................... 4

Section 6: Price reduction.............................................................................................................. 4

Section 7: Requirements of examination and
notification in a contract between traders..................... 4

Chapter 12: The buyer's obligations............................................................................................... 4

Section 1: General provisions........................................................................................................ 4

Section 2: Payment of the price..................................................................................................... 4

Section 3: Taking delivery............................................................................................................. 4

Chapter 13: The seller’s remedies.................................................................................................. 4

Section 1: General provisions........................................................................................................ 4

Section 2: Requiring performance.................................................................................................. 4

Section 3: Withholding performance of
seller’s obligations.............................................................. 4

Section 4: Termination................................................................................................................... 4

Chapter 14: Passing of risk............................................................................................................ 4

Section 1: General provisions........................................................................................................ 4

Section 2 :Passing of risk in consumer sales
contracts..................................................................... 4

Section 3 :Passing of risk in contracts
between traders................................................................... 4

Part V: Obligations and remedies of the
parties to a related service contract................................... 4

Chapter 15: Obligations and remedies of the
parties....................................................................... 4

Section 1: Application of certain general
rules on sales contracts .............................         4

Section 2: Obligations of the service
provider................................................................................. 4

Section 3: Obligations of the customer........................................................................................... 4

Section 4: Remedies...................................................................................................................... 4

Part VI: Damages and interest....................................................................................................... 4

Chapter 16: Damages and interest................................................................................................. 4

Section 1: Damages...................................................................................................................... 4

Section 2: Interest on late payments: general
provisions.................................................................. 4

Section 3: Late payments by traders.............................................................................................. 4

Part VII: Restitution...................................................................................................................... 4

Chapter 17: Restitution.................................................................................................................. 4

Part VIII: Prescription................................................................................................................... 4

Chapter 18: Prescription............................................................................................................... 4

Section 1 : General provision......................................................................................................... 4

Section 2 : Periods of prescription and their
commencement........................................................... 4

Section 3: Extension of periods of
prescription............................................................................... 4

Section 4 : Renewal of periods of
prescription............................................................................... 4

Section 5: Effects of prescription................................................................................................... 4

Section 6: Modification by agreement............................................................................................ 4

Appendix 1................................................................................................................................... 4

Appendix 2................................................................................................................................... 4

Part I      Introductory provisions

Chapter 1 General principles and
application

Section
1        General principles

Article 1
Freedom of contract

1.
Parties are free to conclude a contract and to
determine its contents, subject to any applicable mandatory rules.

2.
Parties may exclude the application of any of
the provisions of the Common European Sales Law, or derogate from or vary their
effects, unless otherwise stated in those provisions.

Article 2
Good faith and fair dealing

1.
Each party has a duty to act in accordance with
good faith and fair dealing.

2.
Breach of this duty may preclude the party in
breach from exercising or relying on a right, remedy or defence which that
party would otherwise have, or may make the party liable for any loss thereby
caused to the other party.

3.
The parties may not exclude the application of
this Article or derogate from or vary its effects.

Article 3
 Co-operation

The parties are obliged to co-operate with
each other to the extent that this can be expected for the performance of their
contractual obligations.

Section 2        Application

Article 4
Interpretation

1.
The Common European Sales Law is to be
interpreted autonomously and in accordance with its objectives and the
principles underlying it.

2.
Issues within the scope of the Common European
Sales Law but not expressly settled by it are to be settled in accordance with
the objectives and the principles underlying it and all its provisions, without
recourse to the national law that would be applicable
in the absence of an agreement to use the Common European Sales Law or to any
other law.

3.
Where there is a general rule and a special rule
applying to a particular situation within the scope of the general rule, the
special rule prevails in any case of conflict.

Article 5
Reasonableness

1.
Reasonableness is to be objectively ascertained,
having regard to the nature and purpose of the contract, to the circumstances
of the case and to the usages and practices of the trades or professions
involved.

2.
Any reference to what can be expected of or by a
person, or in a particular situation, is a reference to
what can reasonably be expected.

Article 6
No form required

Unless otherwise stated in the Common
European Sales Law, a contract, statement or any other act which is governed by
it need not be made in or evidenced by a particular form.

Article 7
Not individually negotiated contract terms

1.
A contract term is not individually negotiated
if it has been supplied by one party and the other party has not been able to
influence its content.

2.
Where one party supplies a selection of contract
terms to the other party, a term will not be regarded as individually
negotiated merely because the other party chooses that term from that selection.

3.
A party who claims that a contract term supplied
as part of standard contract terms has since been individually negotiated bears
the burden of proving that it has been.

4.
In a contract between a trader and a consumer,
the trader bears the burden of proving that a contract term supplied by the
trader has been individually negotiated.

5.
In a contract between a trader and a consumer,
contract terms drafted by a third party are considered to have been supplied by
the trader, unless the consumer introduced them to the contract.

Article 8
Termination of a contract

1.
To ‘terminate a contract’ means to bring to an
end the rights and obligations of the parties under the contract with the
exception of those arising under any contract term providing for the settlement
of disputes or any other contract term which is to operate even after
termination.

2.
Payments due and damages for any non-performance
before the time of termination remain payable. Where the termination is for
non-performance or for anticipated non-performance, the terminating party is
also entitled to damages in lieu of the other party’s future performance.

3.
The effects of termination on the repayment of
the price and the return of the goods or the digital content, and other
restitutionary effects, are governed by the rules on restitution set out in
Chapter 17.

Article 9
Mixed-purpose contracts

1.
Where a contract provides both for the sale of
goods or the supply of digital content and for the provision of a related
service, the rules of Part IV apply to the obligations and remedies of the
parties as seller and buyer of goods or digital content and the rules of Part V
apply to the obligations and remedies of the parties as service provider and
customer.

2.
Where, in a contract falling under paragraph 1,
the obligations of the seller and the service provider under the contract are
to be performed in separate parts or are otherwise divisible, then if there is
a ground for termination for non-performance of a part to which a part of the
price can be apportioned, the buyer and customer may terminate only in relation
to that part.

3.
Paragraph 2 does not apply where the buyer and
customer cannot be expected to accept performance of the other parts or the
non-performance is such as to justify termination of the contract as a whole.

4.
Where the obligations of the seller and the
service provider under the contract are not divisible or a part of the price
cannot be apportioned, the buyer and the customer may terminate only if the
non-performance is such as to justify termination of the contract as a whole.

Article 10
Notice

1.
This Article applies in relation to the giving
of notice for any purpose under the rules of the Common European Sales Law and
the contract. ‘Notice’ includes the communication of any statement which is
intended to have legal effect or to convey information for a legal purpose.

2.
A notice may be given by any means appropriate
to the circumstances.

3.
A notice becomes effective when it reaches the
addressee, unless it provides for a delayed effect.

4.
A notice reaches the addressee:

(a)
when it is delivered to the addressee;

(b)
when it is delivered to the addressee’s place of
business or, where there is no such place of business or the notice is
addressed to a consumer, to the addressee’s habitual residence;

(c)
in the case of a notice transmitted by
electronic mail or other individual communication, when it can be accessed by
the addressee; or

(d)
when it is otherwise made available to the
addressee at such a place and in such a way that the addressee could be
expected to obtain access to it without undue delay.

The notice has reached the addressee after one
of the requirements in point (a), (b), (c) or (d) is fulfilled, whichever is
the earliest.

5.
A notice has no effect if a revocation of it
reaches the addressee before or at the same time as the notice.

6.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of
paragraphs 3 and 4 or derogate from or vary its effects.

Article 11
Computation of time

1.
The provisions of this Article apply in relation
to the computation of time for any purpose under the Common European Sales Law.

2.
Subject to paragraphs 3 to 7:

(a)
a period expressed in days starts at the
beginning of the first hour of the first       day and ends with the expiry of
the last hour of the last day of the period;

(b)
a period expressed in weeks, months or years
starts at the beginning of the first hour of the first day of the period, and
ends with the expiry of the last hour of whichever day in the last week, month
or year is the same day of the week, or falls on the same date, as the day from
which the period runs; with the qualification that if, in a period expressed in
months or in years, the day on which the period should expire does not occur in
the last month, it ends with the expiry of the last hour of the last day of
that month.

3.
Where a period expressed in days, weeks, months
or years is to be calculated from a specified event, action or time the day
during which the event occurs, the action takes place or the specified time
arrives does not fall within the period in question.

4.
The periods concerned include Saturdays, Sundays
and public holidays, save where these are expressly excepted or where the
periods are expressed in working days.

5.
Where the last day of a period is a Saturday,
Sunday or public holiday at the place where a prescribed act is to be done, the
period ends with the expiry of the last hour of the following working day. This
provision does not apply to periods calculated retroactively from a given date
or event.

6.
Where a person sends another person a document
which sets a period of time within which the addressee has to reply or take
other action but does not state when the period is to begin, then, in the
absence of indications to the contrary, the period is calculated from the
moment the document reaches the addressee.

7.
For the purposes of this Article:

(a)
“public holiday” with reference to a Member
State, or part of a Member State, of the European Union means any day
designated as such for that Member State or part in a list published in the
Official Journal of the European Union; and

(b)
“working days” means all days other than
Saturdays, Sundays and public holidays.

Article 12
Unilateral statements or conduct

1.
A unilateral statement indicating
intention is to be interpreted in the way in which the person to whom it
is addressed could be expected to understand it.

2.
Where the person
making the statement intended an expression used in it
to have a particular meaning and the other party was aware, or could be
expected to have been aware, of that intention, the expression is to be
interpreted in the way intended by the person making the statement.

3.
Articles 59 to 65 apply with appropriate
adaptations to the interpretation of unilateral statements indicating
intention.

4.
The rules on defects in consent in Chapter 5
apply with appropriate adaptations to unilateral statements indicating
intention.

5.
Any reference to a statement referred to in this
Article includes a reference to conduct which can be regarded as the equivalent
of a statement.

Part II    Making a binding contract

Chapter 2 Pre-contractual information

Section
1        Pre-contractual information to be given by a trader dealing with a
consumer

Article 13
Duty to provide information when concluding a
distance or off-premises contract

1.
A trader concluding a distance contract or
off-premises contract has a duty to provide the following information to the
consumer, in a clear and comprehensible manner before the contract is concluded
or the consumer is bound by any offer:

(a)
the main characteristics of the goods, digital
content or related services to be supplied, to an extent appropriate to the
medium of communication and to the goods, digital content or related services;

(b)
the total price and additional charges and
costs, in accordance with Article 14;

(c)
the identity and address of the trader, in
accordance with Article 15;

(d)
the contract terms, in accordance with Article
16;

(e)
the rights of withdrawal, in accordance with
Article 17;

(f)
where applicable, the existence and the
conditions of the trader's after-sale customer assistance, after-sale services,
commercial guarantees and complaints handling policy;

(g)
where applicable, the possibility of having
recourse to an Alternative Dispute Resolution mechanism to which the trader is
subject and the methods for having access to it;

(h)
where applicable, the functionality, including
applicable technical protection measures, of digital content; and

(i)
where applicable, any relevant interoperability
of digital content with hardware and software which the trader is aware of or
can be expected to have been aware of.

2.
The information provided, except for the
addresses required by point (c) of paragraph 1, forms an integral part of the
contract and shall not be altered unless the parties expressly agree otherwise.

3.
For a distance contract, the information
required by this Article must:

(a)
be given or made available to the consumer in a
way that is appropriate to the means of distance communication used;

(b)
be in plain and intelligible language; and

(c)
insofar as it is provided on a durable medium,
be legible.

4.
For an off-premises contract, the information
required by this Article must:

(a)
be given on paper or, if the consumer agrees, on
another durable medium; and

(b)
be legible and in plain, intelligible language.

5.
This Article does not apply where the contract
is:

(a)
for the supply of foodstuffs, beverages or other
goods which are intended for current consumption in the household, and which
are physically supplied by a trader on frequent and regular rounds to the
consumer's home, residence or workplace;

(b)
concluded by means of an automatic vending
machine or automated commercial premises;

(c)
an off-premises contract if the price or, where
multiple contracts were concluded at the same time, the total price of the
contracts does not exceed EUR 50 or the equivalent sum in the currency agreed
for the contract price.

Article 14
Information about price and additional charges and
costs

1.
The information to be provided under point (b)
of Article 13 (1) must include:

(a)
the total price of the goods, digital content or
related services, inclusive of taxes, or where the nature of the goods, digital
content or related services is such that the price cannot reasonably be
calculated in advance, the manner in which the price is to be calculated; and

(b)
where applicable, any additional freight,
delivery or postal charges and any other costs or, where these cannot
reasonably be calculated in advance, the fact that such additional charges and
costs may be payable.

2.
In the case of a contract of indeterminate
duration or a contract containing a subscription, the total price must include
the total price per billing period. Where such contracts are charged at a fixed
rate, the total price must include the total monthly price. Where the total
price cannot be reasonably calculated in advance, the manner in which the price
is to be calculated must be provided.

3.
Where applicable, the trader must inform the
consumer of the cost of using the means of distance communication for the
conclusion of the contract where that cost is calculated other than at the
basic rate.

Article 15
Information about the identity and address of the
trader

The information to be provided under point
(c) of Article 13 (1) must include:

(a)          the identity of the trader, such
as its trading name;

(b)          the geographical address at which
the trader is established;

(c)          the telephone number, fax number
and e-mail address of the trader, where available, to enable the consumer to
contact the trader quickly and communicate with the trader efficiently;

(d)          where applicable, the identity
and geographical address of any other trader on whose behalf the trader is
acting; and

(e)          where different from the address
given pursuant to points (b) and (d) of this Article, the geographical address
of the trader, and where applicable that of the trader on whose behalf it is
acting, where the consumer can address any complaints.

Article 16
Information about the contract terms

The information to be provided under point
(d) of Article 13 (1) must include:

(a)          the arrangements for payment, delivery
of the goods, supply of the digital content or performance of the related
services and the time by which the trader undertakes to deliver the goods, to
supply the digital content or to perform the related services;

(b)          where applicable, the duration of
the contract, the minimum duration of the consumer's obligations or, if the
contract is of indeterminate duration or is to be extended automatically, the
conditions for terminating the contract; and

(c)          where applicable, the existence
and conditions for deposits or other financial guarantees to be paid or
provided by the consumer at the request of the trader;

(d)          where applicable, the existence
of relevant codes of conduct and how copies of them can be obtained.

Article 17
Information about rights of withdrawal when
concluding a distance or off-premises contract

1.
Where the consumer has a right of withdrawal
under Chapter 4, the information to be provided under point (e) of Article 13
(1) must include the conditions, time limit and procedures for exercising that
right in accordance with Appendix 1, as well as the model withdrawal form set
out in Appendix 2.

2.
Where applicable, the information to be provided
under point (e) of Article 13(1) must include the fact that the consumer will
have to bear the cost of returning the goods in case of withdrawal and, for
distance contracts, that the consumer will have to bear the cost of returning
the goods in the event of withdrawal if the goods by their nature cannot be
normally returned by post.

3.
Where the consumer can exercise the right of
withdrawal after having made a request for the provision of related services to
begin during the withdrawal period, the information to be provided under point
(e) of Article 13(1) must include the fact that the consumer would be liable to
pay the trader the amount referred to in Article 45 (5).

4.
The duty to provide the information required by
paragraphs 1, 2 and 3 may be fulfilled by supplying the Model instructions on
withdrawal set out in Appendix 1 to the consumer. The trader will be deemed to
have fulfilled these information requirements if he has supplied these
instructions to the consumer correctly filled in.

5.
Where a right of withdrawal is not provided for
in accordance with points (c) to (i) of Article 40 (2) and paragraph 3 of that
Article, the information to be provided under point (e) of Article 13 (1) must
include a statement that the consumer will not benefit from a right of
withdrawal or, where applicable, the circumstances under which the consumer
loses the right of withdrawal.

Article 18
Off-premises contracts: additional information
requirements and confirmation

1.
The trader must provide the consumer with a copy
of the signed contract or the confirmation of the contract, including where
applicable, the confirmation of the consumer's consent and acknowledgment as
provided for in point (d) of Article 40(3) on paper or, if the consumer agrees,
on a different durable medium.

2.
Where the consumer wants the provision of
related services to begin during the withdrawal period provided for in Article
42(2), the trader must require that the consumer makes such an express request
on a durable medium.

Article 19
Distance contracts: additional information and other
requirements

1.
When a trader makes a telephone call to a
consumer, with a view to concluding a distance contract, the trader must, at
the beginning of the conversation with the consumer, disclose its identity and,
where applicable, the identity of the person on whose behalf it is making the
call and the commercial purpose of the call.

2.
If the distance contract is concluded through a
means of distance communication which allows limited space or time to display
the information, the trader must provide at least the information referred to
in paragraph 3 of this Article on that particular means prior to the conclusion
of such a contract. The other information referred to in Article 13 shall be
provided by the trader to the consumer in an appropriate way in accordance with
Article 13(3).

3.
The information required under paragraph 2 is:

(a)
the main characteristics of the goods, digital content or related services, as required by point (a) of
Article 13 (1);

(b)
the identity of the trader, as required by point
(a) of Article 15;

(c)
the total price, including all items referred to
in point (b) of Article 13 (1) and Article 14(1) and (2);

(d)
the right of withdrawal; and

(e)
where relevant, the duration of the contract,
and if the contract is for an indefinite period, the requirements for
terminating the contract, referred to in point (b) of Article 16.

4.
A distance contract concluded by telephone is
valid only if the consumer has signed the offer or has sent his written consent
indicating the agreement to conclude a contract. The trader must provide the
consumer with a confirmation of that agreement on a durable medium.

5.
The trader must give the consumer a confirmation
of the contract concluded, including where applicable, of the consent and
acknowledgement of the consumer referred to in point (d) of Article 40(3), and
all the information referred to in Article 13 on a durable medium. The trader
must give that information in reasonable time after the conclusion of the
distance contract, and at the latest at the time of the delivery of the goods
or before the supply of digital content or the provision of the related service
begins, unless the information has already been given to the consumer prior to
the conclusion of the distance contract on a durable medium.

6.
Where the consumer wants the provision of
related services to begin during the withdrawal period provided for in Article
42(2), the trader must require that the consumer makes an express request to
that effect on a durable medium.

Article 20
Duty to provide information when concluding
contracts other than distance and off-premises contracts

1.
In contracts other than distance and
off-premises contracts, a trader has a duty to provide the following
information to the consumer, in a clear and comprehensible manner before the
contract is concluded or the consumer is bound by any offer, if that
information is not already apparent from the context:

(a)
the main characteristics of the goods, digital
content or related services to be supplied, to an extent appropriate to the
medium of communication and to the goods, digital content or related services;

(b)
the total price and additional charges and
costs, in accordance with Article 14(1);

(c)
the identity of the trader, such as the trader's
trading name, the geographical address at which it is established and its
telephone number;

(d)
the contract terms in accordance with points (a)
and (b) of Article 16;

(e)
where applicable, the existence and the
conditions of the trader's after-sale services, commercial guarantees and
complaints handling policy;

(f)
where applicable, the functionality, including
applicable technical protection measures of digital content; and

(g)
 where applicable, any relevant interoperability
of digital content with hardware   and software which the trader is aware of or
can be expected to have been        aware of.

2.
This Article does not apply where the contract
involves a day-to-day transaction and is performed immediately at the time of
its conclusion.

Article 21
Burden of proof

The trader bears the burden of proof that
it has provided the information required by this Section.

Article 22
Mandatory nature

The parties may not, to the detriment of
the consumer, exclude the application of this Section or derogate from or vary
its effects.

Section
2        Pre-contractual information to be given by a trader dealing with
another trader

Article 23
Duty to disclose information about goods and related services

1.
Before the conclusion of a contract for the sale
of goods, supply of digital content or provision of related services by a
trader to another trader, the supplier has a duty to disclose by any
appropriate means to the other trader any information concerning the main
characteristics of the goods, digital content or related services to be
supplied which the supplier has or can be expected to have and which it would
be contrary to good faith and fair dealing not to disclose to the other party.

2.
In determining whether paragraph 1 requires the
supplier to disclose any information, regard is to be had to all the
circumstances, including:

(a)
whether the supplier had special expertise;

(b)
the cost to the supplier of acquiring the
relevant information;

(c)
the ease with which the other trader could have
acquired the information by other means;

(d)
the nature of the information;

(e)
the likely importance of the information to the
other trader; and

(f)      good commercial practice in the
situation concerned.

Section
3:       Contracts concluded by electronic means

Article 24
Additional duties to provide information in
distance contracts concluded by electronic means

1.
This Article applies where a trader provides the
means for concluding a contract and where those means are electronic and do not
involve the exclusive exchange of electronic mail or other individual
communication.

2.
The trader must make available to the other
party appropriate, effective and accessible technical means for identifying and
correcting input errors before the other party makes or accepts an offer.

3.
The trader must provide information about the
following matters before the other party makes or accepts an offer:

(a)
the technical steps to be taken in order to
conclude the contract;

(b)
whether or not a contract document will be filed
by the trader and whether it will be accessible;

(c)
the technical means for identifying and
correcting input errors before the other party makes or accepts an offer;

(d)
the languages offered for the conclusion of the
contract;

(e)
the contract terms.

4.
The trader must ensure that the contract terms
referred to in point (e) of paragraph 3 are made available in alphabetical or
other intelligible characters and on a durable medium by means of any support
which permits reading, recording of the information contained in the text and
its reproduction in tangible form.

5.
The trader must acknowledge by electronic means
and without undue delay the receipt of an offer or an acceptance sent by the
other party.

Article 25
Additional requirements in distance
contracts concluded by
electronic means

1.
Where a distance contract which is concluded by
electronic means would oblige the consumer to make a payment, the trader must
make the consumer aware in a clear and prominent manner, and immediately before
the consumer places the order, of the information required by point (a) of
Article 13 (1), Article 14(1) and (2), and point (b) of Article 16.

2.
The trader must ensure that the consumer, when
placing the order, explicitly acknowledges that the order implies an obligation
to pay. Where placing an order entails activating a button or a similar
function, the button or similar function must be labelled in an easily legible
manner only with the words "order with obligation to pay" or similar
unambiguous wording indicating that placing the order entails an obligation to
make a payment to the trader. Where the trader has not complied with this
paragraph, the consumer is not bound by the contract or order.

3.
The trader must indicate clearly and legibly on
its trading website at the latest at the beginning of the ordering process
whether any delivery restrictions apply and what means of payment are accepted.

Article 26
Burden of proof

In relations between a trader and a
consumer, the trader bears the burden of proof that it has provided the
information required by this Section.

Article 27
 Mandatory nature

In relations between a trader and a
consumer, the parties may not, to the detriment of the consumer, exclude the
application of this Section or derogate from or vary its effects.

Section
4        Duty to ensure that information supplied is correct

Article 28
Duty to ensure that information supplied is correct

1.
A party who supplies information before or at
the time a contract is concluded, whether in order to comply with the duties
imposed by this Chapter or otherwise, has a duty to take reasonable care to
ensure that the information supplied is correct and is not misleading.

2.
A party to whom incorrect or misleading
information has been supplied in breach of the duty referred to in paragraph 1,
and who reasonably relies on that information in concluding a contract with the
party who supplied it, has the remedies set out in Article 29.

3.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of this
Article or derogate from or vary its effects.

Section
5        Remedies for breach of information duties

Article 29
Remedies for breach of information duties

1.
A party which has failed to comply with any duty
imposed by this Chapter is liable for any loss caused to the other party by
such failure.

2.
Where the trader has not complied with the
information requirements relating to additional charges or other costs as
referred to in Article 14 or on the costs of returning the goods as referred to
in Article 17(2) the consumer is not liable to pay the additional charges and
other costs.

3.
The remedies provided under this Article are
without prejudice to any remedy which may be available under Article 42 (2),
Article 48 or Article 49.

4.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of
this Article or derogate from or vary its effects.

Chapter 3 Conclusion of contract

Article 30
Requirements for the conclusion of a contract

1.
A contract is concluded if:

(a)
the parties reach an agreement;

(b)
they intend the agreement to have legal effect;
and

(c)
the agreement, supplemented if necessary by
rules of the Common European Sales Law, has sufficient content and certainty to
be given legal effect.

2.
Agreement is reached by acceptance of an offer.
Acceptance may be made explicitly or by other statements or conduct.

3.
Whether the parties intend the agreement to have
legal effect is to be determined from their statements and conduct.

4.
Where one of the parties makes agreement on some
specific matter a requirement for the conclusion of a contract, there is no
contract unless agreement on that matter has been reached.

Article 31
Offer

1.
A proposal is an offer if:

(a)
it is intended to result in a contract if it is
accepted; and

(b)
it has sufficient content and certainty for
there to be a contract.

2.
An offer may be made to one or more specific
persons.

3.
A proposal made to the public is not an offer,
unless the circumstances indicate otherwise.

Article 32
Revocation of offer

1.
An offer may be revoked if the revocation
reaches the offeree before the offeree has sent an acceptance or, in cases of
acceptance by conduct, before the contract has been concluded.

2.
Where a proposal made to the public is an offer,
it can be revoked by the same means as were used to make the offer.

3.
A revocation of an offer is ineffective if:

(a)
the offer indicates that it is irrevocable;

(b)
the offer states a fixed time period for its
acceptance; or

(c)
it was otherwise reasonable for the offeree to
rely on the offer as being irrevocable and the offeree has acted in reliance on
the offer.

Article 33
Rejection of offer

When a rejection of an offer reaches the
offeror, the offer lapses.

Article 34
Acceptance

1.
Any form of statement or conduct by the offeree
is an acceptance if it indicates assent to the offer.

2.
Silence or inactivity does not in itself
constitute acceptance.

Article 35
Time of conclusion of the contract

1.
Where an acceptance is sent by the offeree the
contract is concluded when the acceptance reaches the offeror.

2.
Where an offer is accepted by conduct, the
contract is concluded when notice of the conduct reaches the offeror.

3.
Notwithstanding paragraph 2, where by virtue of
the offer, of practices which the parties have established between themselves,
or of a usage, the offeree may accept the offer by conduct without notice to
the offeror, the contract is concluded when the offeree begins to act.

Article 36
Time limit for acceptance

1.
An acceptance of an offer is effective only if
it reaches the offeror within any time limit stipulated in the offer by the
offeror.

2.
Where no time limit has been fixed by the
offeror the acceptance is effective only if it reaches the offeror within a
reasonable time after the offer was made.

3.
Where an offer may be accepted by doing an act
without notice to the offeror, the acceptance is effective only if the act is
done within the time for acceptance fixed by the offeror or, if no such time is
fixed, within a reasonable time.

Article 37
Late acceptance

1.
A late acceptance is effective as an acceptance
if without undue delay the offeror informs the offeree that the offeror is
treating it as an effective acceptance.

2.
Where a letter or other communication containing
a late acceptance shows that it has been sent in such circumstances that if its
transmission had been normal it would have reached the offeror in due time, the
late acceptance is effective as an acceptance unless, without undue delay, the
offeror informs the offeree that the offer has lapsed.

Article 38
Modified acceptance

1.
A reply by the offeree which states or implies
additional or different contract terms which materially alter the terms of the
offer is a rejection and a new offer.

2.
Additional or different contract terms relating,
among other things, to the price, payment, quality and quantity of the goods,
place and time of delivery, extent of one party's liability to the other or the
settlement of disputes are presumed to alter the terms of the offer materially.

3.
A reply which gives a definite assent to an
offer is an acceptance even if it states or implies additional or different
contract terms, provided that these do not materially alter the terms of the
offer. The additional or different terms then become part of the contract.

4.
A reply which states or implies additional or
different contract terms is always a rejection of the offer if:

(a)
the offer expressly limits acceptance to the
terms of the offer;

(b)
the offeror objects to the additional or
different terms without undue delay; or

(c)
the offeree makes the acceptance conditional
upon the offeror’s assent to the additional or different terms, and the assent
does not reach the offeree within a reasonable time.

Article 39
Conflicting standard contract terms

1.
Where the parties have reached agreement except
that the offer and acceptance refer to conflicting standard contract terms, a
contract is nonetheless concluded. The standard contract terms are part of the
contract to the extent that they are common in substance.

2.
Notwithstanding paragraph 1, no contract is
concluded if one party:

(a)
has indicated in advance, explicitly, and not by
way of standard contract terms, an intention not to be bound by a contract on
the basis of paragraph 1; or

(b)
without undue delay, informs the other party of
such an intention.

Chapter 4 Right to withdraw in distance and off-premises contracts
between traders and consumers

Article 40
Right to withdraw

1.
During the period provided for in Article 42,
the consumer has a right to withdraw from the contract without giving any
reason, and at no cost to the consumer except as provided in Article 45, from:

(a)
a distance contract;

(b)
an off-premises contract, provided that the
price or, where multiple contracts were concluded at the same time, the total
price of the contracts exceeds EUR 50 or the equivalent sum in the currency
agreed for the contract price at the time of the conclusion of the contract.

2.
Paragraph 1 does not apply to:

(a)
a contract concluded by means of an automatic
vending machine or automated commercial premises;

(b)
a contract for the supply of foodstuffs,
beverages or other goods which are intended for current consumption in the
household and which are physically supplied by the trader on frequent and
regular rounds to the consumer's home, residence or workplace;

(c)
a contract for the supply of goods or related
services for which the price depends on fluctuations in the financial market
which cannot be controlled by the trader and which may occur within the
withdrawal period;

(d)
a contract for the supply of goods or digital
content which are
made to the consumer’s specifications, or are
clearly personalised;

(e)
a contract for the supply of goods which are
liable to deteriorate or expire rapidly;

(f)
a contract for the supply of alcoholic
beverages, the price of which has been agreed upon at the time of the
conclusion of the sales contract, the delivery of which can only take place
after 30 days from the time of conclusion of the contract and the actual value
of which is dependent on fluctuations in the market which cannot be controlled
by the trader;

(g)
a contract for the sale of a newspaper,
periodical or magazine with the exception of subscription contracts for the
supply of such publications;

(h)
a contract concluded at a public auction; and

(i)
a contract for catering or services related to
leisure activities which provides for a specific date or period of performance.

3.
Paragraph 1 does not apply in the following
situations:

(a)
where the goods supplied were sealed, have been
unsealed by the consumer and are not then suitable for return due to health
protection or hygiene reasons;

(b)
where the goods supplied have, according to
their nature, been inseparably mixed with other items after delivery;

(c)
where the goods supplied were sealed audio or
video recordings or computer software and have been unsealed after delivery;

(d)
where the supply of digital content which is not
supplied on a tangible medium has begun with the consumer's prior express
consent and with the acknowledgement by the consumer of losing the right to
withdraw;

(e)
the consumer has specifically requested a visit
from the trader for the purpose of carrying out urgent repairs or maintenance.
Where on the occasion of such a visit the trader provides related services in
addition to those specifically requested by the consumer or goods other than
replacement parts necessarily used in performing the maintenance or in making
the repairs, the right of withdrawal applies to those additional related
services or goods.

4.
Where the consumer has made an offer which, if
accepted, would lead to the conclusion of a contract from which there would be
a right to withdraw under this Chapter, the consumer may withdraw the offer
even if it would otherwise be irrevocable.

Article 41
 Exercise of right to withdraw

1.
The consumer may exercise the right to withdraw
at any time before the end of the period of withdrawal provided for in Article
42.

2.
The consumer exercises the right to withdraw by
notice to the trader. For this purpose, the consumer may use either the Model
withdrawal form set out in Appendix 2 or any other unequivocal statement
setting out the decision to withdraw.

3.
Where the trader gives the consumer the option
to withdraw electronically on its trading website, and the consumer does so,
the trader has a duty to communicate to the consumer an acknowledgement of
receipt of such a withdrawal on a durable medium without delay. The trader is
liable for any loss caused to the other party by a breach of this duty.

4.
A communication of withdrawal is timely if sent
before the end of the withdrawal period.

5.
The consumer bears the burden of proof that the
right of withdrawal has been exercised in accordance with this Article.

Article 42
 Withdrawal period

1.
The withdrawal period expires after fourteen
days from:

(a)
the day on which the consumer has taken delivery
of the goods in the case of a   sales contract, including a sales contract
under which the seller also agrees to         provide related services;

(b)
the day on which the consumer has taken delivery
of the last item in the case       of a contract for the sale of multiple goods
ordered by the consumer in one  order    and delivered separately, including a
contract under which the seller  also agrees to provide related services;

(c)
the day on which the consumer has taken delivery
of the last lot or piece in the    case of a contract where the goods consist
of multiple lots or pieces, including            a contract under which the seller
also agrees to provide related services;

(d)
the day on which the consumer has taken delivery
of the first item where the       contract is for regular delivery of goods
during a defined period of time,           including a contract under which the
seller also agrees to provide related           services;

(e)
the day of the conclusion of the contract in the
case of a contract for related services concluded after the goods have been
delivered;

(f)
the day when the consumer has taken delivery of
the tangible medium in accordance with point (a) in the case of a contract for
the supply of digital content where the digital content is supplied on a
tangible medium;

(g)
the day of the conclusion of the contract in the
case of a contract where the digital content is not supplied on a tangible medium.

2.
Where the trader has not provided the consumer
with the information referred to in Article 17 (1), the withdrawal period
expires:

(a)
after one year from the end of the initial
withdrawal period, as determined in accordance with paragraph 1; or

(b)
where the trader provides the consumer with the
information required within one year from the end of the withdrawal period as
determined in accordance with paragraph 1, after fourteen days from the day the
consumer receives the information.

Article 43
Effects of withdrawal

Withdrawal terminates the obligations of both parties
under the contract:

(a)          to perform the contract; or

(b)          to conclude the contract in cases
where an offer was made by the consumer.

Article 44
Obligations of the trader in the event of withdrawal

1.
The trader must reimburse all payments received
from the consumer, including, where applicable, the costs of delivery without
undue delay and in any event not later than fourteen days from the day on which
the trader is informed of the consumer's decision to withdraw from the contract
in accordance with Article 41. The trader must carry out such reimbursement
using the same means of payment as the consumer used for the initial
transaction, unless the consumer has expressly agreed otherwise and provided that
the consumer does not incur any fees as a result of such reimbursement.

2.
Notwithstanding paragraph 1, the trader is not
required to reimburse the supplementary costs, if the consumer has expressly
opted for a type of delivery other than the least expensive type of standard
delivery offered by the trader.

3.
In the case of a contract for the sale of goods,
the trader may withhold the reimbursement until it has received the goods back,
or the consumer has supplied evidence of having sent back the goods, whichever
is earlier, unless the trader has offered to collect the goods.

4.
In the case of an off-premises contract where
the goods have been delivered to the consumer’s home at the time of the
conclusion of the contract, the trader must collect the goods at its own cost
if the goods by their nature cannot be normally returned by post.

Article 45
Obligations of the consumer in the event of
withdrawal

1.
The consumer must send back the goods or hand
them over to the trader or to a person authorised by the trader without undue
delay and in any event not later than fourteen days from the day on which the
consumer communicates the decision to withdraw from the contract to the trader
in accordance with Article 41, unless the trader has offered to collect the
goods. This deadline is met if the consumer sends back the goods before the
period of fourteen days has expired.

2.
The consumer must bear the direct costs of
returning the goods, unless the trader has agreed to bear those costs or the
trader failed to inform the consumer that the consumer has to bear them.

3.
The consumer is liable for any diminished value
of the goods only where that results from handling of the goods in any way
other than what is necessary to establish the nature, characteristics and
functioning of the goods. The consumer is not liable for diminished value where
the trader has not provided all the information about the right to withdraw in
accordance with Article 17 (1).

4.
Without prejudice to paragraph 3, the consumer
is not liable to pay any compensation for the use of the goods during the
withdrawal period.

5.
Where the consumer exercises the right of
withdrawal after having made an express request for the provision of related
services to begin during the withdrawal period, the consumer must pay to the
trader an amount which is in proportion to what has been provided before the
consumer exercised the right of withdrawal, in comparison with the full
coverage of the contract. The proportionate amount to be paid by the consumer
to the trader must be calculated on the basis of the total price agreed in the
contract. Where the total price is excessive, the proportionate amount must be
calculated on the basis of the market value of what has been provided.

6.
The consumer is not liable for the cost for:

(a)
the provision of related services, in full or in
part, during the withdrawal period, where:

(i) the trader has failed to provide
information in accordance with Article 17(1) and (3); or

(ii) the consumer has not expressly requested
performance to begin during the withdrawal period in accordance with Article
18(2) and Article 19(6);

(b)
for the supply, in full or in part, of digital
content which is not supplied on a tangible medium where:

(i) the consumer has not given prior express
consent for the supply of digital content to begin before the end of the period
of withdrawal        referred to in Article 42(1);

(ii) the consumer has not acknowledged losing
the right of withdrawal when giving the consent; or

(iii) the trader has failed to provide the
confirmation in accordance with Article 18(1) and Article 19(5).

7.
Except as provided for in this Article, the
consumer does not incur any liability through the exercise of the right of
withdrawal.

Article 46
Ancillary contracts

1.
Where a consumer exercises the right of
withdrawal from a distance or an off-premises contract in accordance with
Articles 41 to 45, any ancillary contracts are automatically terminated at no
cost to the consumer except as provided in paragraphs 2 and 3. For the purpose
of this Article an ancillary contract means a contract by which a consumer
acquires goods, digital content or related services in connexion to a distance
contract or an off-premises contract and these goods, digital content or
related services are provided by the trader or a third party on the basis of an
arrangement between that third party and the trader.

2.
The provisions of Articles 43, 44 and 45 apply
accordingly to ancillary contracts to the extent that those contracts are
governed by the Common European Sales Law.

3.
For ancillary contracts which are not governed
by the Common European Sales Law the applicable law governs the obligations of
the parties in the event of withdrawal.

Article 47
Mandatory nature

The parties may
not, to the detriment of the consumer, exclude the application of this Chapter
or derogate from or vary its effects.

Chapter 5 Defects in consent

Article 48
Mistake

1.
A party may avoid a contract for mistake of fact
or law existing when the contract was concluded if:

(a)
the party, but for the mistake, would not have
concluded the contract or would have done so only on fundamentally different
contract terms and the other party knew or could be expected to have known
this; and

(b)
the other party:

(i) caused the mistake;

(ii) caused the contract to be concluded in
mistake by failing to comply with any pre-contractual information duty under
Chapter 2, Sections 1 to 4;

(iii) knew or could be expected to have known
of the mistake and caused the contract to be concluded in mistake by not
pointing out the relevant  information, provided that good faith and fair
dealing would have required a party aware of the mistake to point it out; or

(iv) made the same mistake.

2.
A party may not avoid a contract for mistake if
the risk of the mistake was assumed, or in the circumstances should be borne,
by that party.

3.
An inaccuracy in the expression or transmission
of a statement is treated as a mistake of the person who made or sent the
statement.

Article 49
Fraud

1.
A party may avoid a contract if the other party
has induced the conclusion of the contract by fraudulent misrepresentation,
whether by words or conduct, or fraudulent non-disclosure of any information
which good faith and fair dealing, or any pre-contractual information duty,
required that party to disclose.

2.
Misrepresentation is fraudulent if it is made with
knowledge or belief that the representation is false, or recklessly as to
whether it is true or false, and is intended to induce the recipient to make a
mistake. Non-disclosure is fraudulent if it is intended to induce the person
from whom the information is withheld to make a mistake.

3.
In determining whether good faith and fair
dealing require a party to disclose particular information, regard should be
had to all the circumstances, including:

(a)
whether the party had special expertise;

(b)
the cost to the party of acquiring the relevant
information;

(c)
the ease with which the other party could have
acquired the information by other means;

(d)
the nature of the information;

(e)
the apparent importance of the information to
the other party; and

(f)
in contracts between traders good commercial
practice in the situation concerned

Article 50
Threats

A party may avoid a contract if the other
party has induced the conclusion of the contract by the threat of wrongful,
imminent and serious harm, or of a wrongful act.

Article 51
Unfair exploitation

A party may avoid a contract if, at the
time of the conclusion of the contract:

(a)          that party was dependent on, or
had a relationship of trust with, the other party, was in economic distress or
had urgent needs, was improvident, ignorant, or inexperienced; and

(b)          the other party knew or could be
expected to have known this and, in the light of the circumstances and purpose
of the contract, exploited the first party’s situation by taking an excessive
benefit or unfair advantage.

Article 52
Notice of avoidance

1.
Avoidance is effected by notice to the other
party.

2.
A notice of avoidance is effective only if it is
given within the following period after the avoiding party becomes aware of the
relevant circumstances or becomes capable of acting freely:

(a)
six months in case of mistake; and

(b)
one year in case of fraud, threats and unfair
exploitation.

Article 53
Confirmation

Where the party who has the right to avoid
a contract under this Chapter confirms it, expressly or impliedly, after
becoming aware of the relevant circumstances, or becoming capable of acting
freely, that party may no longer avoid the contract.

Article 54
Effects of avoidance

1.
A contract which may be avoided is valid until
avoided but, once avoided, is retrospectively invalid from the beginning.

2.
Where a ground of avoidance affects only certain
contract terms, the effect of avoidance is limited to those terms unless it is
unreasonable to uphold the remainder of the contract.

3.
The question whether either party has a right to
the return of whatever has been transferred or supplied under a contract which
has been avoided, or to a monetary equivalent, is regulated by the rules on
restitution in Chapter 17.

Article 55
Damages for loss

A party who has the right to avoid a
contract under this Chapter or who had such a right before it was lost by the
effect of time limits or confirmation is entitled, whether or not the contract
is avoided, to damages from the other party for loss suffered as a result of
the mistake, fraud, threats or unfair exploitation, provided that the other
party knew or could be expected to have known of the relevant circumstances.

Article 56
Exclusion or restriction of remedies

1.
Remedies for fraud, threats and unfair
exploitation cannot be directly or indirectly excluded or restricted.

2.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, directly or indirectly
exclude or restrict remedies for mistake.

Article 57
Choice of remedy

A party who is entitled to a remedy under
this Chapter in circumstances which afford that party a remedy for
non-performance may pursue either of those remedies.

Part III   Assessing what is in the contract

Chapter 6 Interpretation

Article 58
General rules on interpretation of contracts

1.
A contract is to be interpreted according to the
common intention of the parties even if this differs from the normal meaning of
the expressions used in it.

2.
Where one party intended an expression used in
the contract to have a particular meaning, and at the time of the conclusion of
the contract the other party was aware, or could be expected to have been
aware, of that intention, the expression is to be interpreted in the way
intended by the first party.

3.
Unless otherwise provided in paragraphs 1 and 2,
the contract is to be interpreted according to the meaning which a reasonable
person would give to it.

Article 59
Relevant matters

In interpreting a contract, regard may be
had, in particular, to:

(a)          the circumstances in which it was
concluded, including the preliminary negotiations;

(b)          the conduct of the parties, even
subsequent to the conclusion of the contract;

(c)          the interpretation which has
already been given by the parties to expressions which are identical to or
similar to those used in the contract;

(d)          usages which would be considered
generally applicable by parties in the same situation;

(e)          practices which the parties have
established between themselves;

(f)           the meaning commonly given to
expressions in the branch of activity concerned;

(g)          the nature and purpose of the
contract; and

(h)          good faith and fair dealing.

Article 60
Reference to contract as a whole

Expressions used in a contract are to be
interpreted in the light of the contract as a whole.

Article 61
Language discrepancies

Where a contract document is in two or more
language versions none of which is stated to
be authoritative and where there is a discrepancy between the versions, the
version in which the contract was originally drawn up is to be treated as the
authoritative one.

Article 62
Preference for individually negotiated contract
terms

To the extent that there is an
inconsistency, contract terms which have been individually negotiated prevail
over those which have not been individually negotiated within the meaning of
Article 7.

Article 63
Preference for interpretation which gives contract
terms effect

An interpretation which renders the
contract terms effective prevails over one which does not.

Article 64
Interpretation in favour of consumers

1.
Where there is doubt about the meaning of a contract
term in a contract between a trader and a consumer, the interpretation most
favourable to the consumer shall prevail unless the term was supplied by the
consumer.

2.
The parties may not, to the detriment of the
consumer, exclude the application of this Article or derogate from or vary its
effects.

Article 65
Interpretation against supplier of a contract term

Where, in a contract which does not fall
under Article 64, there is doubt about the meaning of a contract term which has
not been individually negotiated within the meaning of Article 7, an
interpretation of the term against the party who supplied it shall prevail.

Chapter 7 Contents and effects

Article 66
Contract terms

The terms of the contract are derived from:

(a)          the agreement of the parties,
subject to any mandatory rules of the Common European Sales Law;

(b)          any usage or practice by which
parties are bound by virtue of Article 67;

(c)          any rule of the Common European
Sales Law which applies in the absence of an agreement of the parties to the
contrary; and

(d)          any contract term implied by
virtue of Article 68.

Article 67
Usages and practices in contracts between traders

1.
In a contract between traders, the parties are
bound by any usage which they have agreed should be applicable and by any practice
they have established between themselves.

2.
The parties are bound by a usage which would be
considered generally applicable by traders in the same situation as the
parties.

3.
Usages and practices do not bind the parties to
the extent to which they conflict with contract terms which have been
individually negotiated or any mandatory rules of the Common European Sales Law.

Article 68
Contract terms which may be implied

1.
Where it is necessary to provide for a matter
which is not explicitly regulated by the agreement of the parties, any usage or
practice or any rule of the Common European Sales Law, an additional contract
term may be implied, having regard in particular to:

(a)
the nature and purpose of the contract;

(b)
the circumstances in which the contract was concluded;
and

(c)
good faith and fair dealing.

2.
Any contract term implied under paragraph 1 is,
as far as possible, to be such as to give effect to what the parties would
probably have agreed, had they provided for the matter.

3.
Paragraph 1 does not apply if the parties have
deliberately left a matter unregulated, accepting that one or other party would
bear the risk.

Article 69
Contract terms derived from certain pre-contractual
statements

1.
Where the trader makes a statement before the
contract is concluded, either to the other party or publicly, about the
characteristics of what is to be supplied by that trader under the contract,
the statement is incorporated as a term of the contract unless:

(a)
the other party was aware, or could be expected
to have been aware when the contract was concluded that the statement was
incorrect or could not otherwise be relied on as such a term; or

(b)
the other party’s decision to conclude the
contract could not have been influenced by the statement.

2.
For the purposes of paragraph 1, a statement
made by a person engaged in advertising or marketing for the trader is regarded
as being made by the trader.

3.
Where the other party is a consumer then, for
the purposes of paragraph 1, a public statement made by or on behalf of a
producer or other person in earlier links of the chain of transactions leading
to the contract is regarded as being made by the trader unless the trader, at
the time of conclusion of the contract, did not know and could not be expected
to have known of it.

4.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of
this Article or derogate from or vary its effects.

Article 70
Duty to raise awareness of not individually
negotiated contract terms

1.
Contract terms supplied by one party and not
individually negotiated within the meaning of Article 7 may be invoked against
the other party only if the other party was aware of them, or if the party
supplying them took reasonable steps to draw the other party's attention to
them, before or when the contract was concluded.

2.
For the purposes of this Article, in relations between a trader and a consumer contract terms are not
sufficiently brought to the consumer's attention by a mere reference to them in
a contract document, even if the consumer signs the document.

3.
The parties may not exclude the application of
this Article or derogate from or vary its effects.

Article 71
Additional payments in contracts between a trader
and a consumer

1.
In a contract between a trader and a consumer, a
contract term which obliges the consumer to make any payment in addition to the
remuneration stated for the trader’s main contractual obligation, in particular
where it has been incorporated by the use of default options which the consumer
is required to reject in order to avoid the additional payment, is not
binding on the consumer unless, before the consumer is bound by the contract,
the consumer has expressly consented to the additional payment. If the consumer
has made the additional payment, the consumer may recover it.

2.
The parties may not, to the detriment of the
consumer, exclude the application of this Article or derogate from or vary its
effects.

Article 72
Merger clauses

1.
Where a contract in writing includes a term
stating that the document contains all contract terms (a merger clause), any
prior statements, undertakings or agreements which are not contained in the
document do not form part of the contract.

2.
Unless the contract otherwise provides, a merger
clause does not prevent the parties’ prior statements from being used to
interpret the contract.

3.
In a contract between a trader and a consumer,
the consumer is not bound by a merger clause.

4.
The parties may not, to the detriment of the
consumer, exclude the application of this Article or derogate from or vary its
effects.

Article 73
Determination of price

Where the amount of the price payable under
a contract cannot be otherwise determined, the price payable is, in the absence
of any indication to the contrary, the price normally charged in comparable
circumstances at the time of the conclusion of the contract or, if no such
price is available, a reasonable price.

Article 74
Unilateral determination by a party

1.
Where the price or any other contract term is to
be determined by one party and that party’s determination is grossly
unreasonable then the price normally charged or term normally used in
comparable circumstances at the time of the conclusion of the contract or, if
no such price or term is available, a reasonable price or a reasonable term is
substituted.

2.
The parties may not exclude the application of
this Article or derogate from or vary its effects.

Article 75
Determination by a third party

1.
Where a third party is to determine the price or
any other contract term and cannot or will not do so, a court may, unless this
is inconsistent with the contract terms, appoint another person to determine
it.

2.
Where a price or other contract term determined
by a third party is grossly unreasonable, the price normally charged or term
normally used in comparable circumstances at the time of the conclusion of the
contract or, if no such price is available, a reasonable price, or a reasonable
term is substituted.

3.
For the purpose of paragraph 1 a 'court'
includes an arbitral tribunal.

4.
In relations between a trader and a consumer the
parties may not to the detriment of the consumer exclude the application of
paragraph 2 or derogate from or vary its effects.

Article 76
Language

Where the language to be used for
communications relating to the contract or the rights or obligations arising
from it cannot be otherwise determined, the language to be used is that used
for the conclusion of the contract.

Article 77
Contracts of indeterminate duration

1.
Where, in a case involving continuous or
repeated performance of a contractual obligation, the contract terms do not
stipulate when the contractual relationship is to end or provide for it to be
terminated upon giving notice to that effect, it may be terminated by either
party by giving a reasonable period of notice not exceeding two months.

2.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of
this Article or derogate from or vary its effects.

Article 78
Contract terms in favour of third parties

1.
The contracting parties may, by the contract,
confer a right on a third party. The third party need not be in existence or
identified at the time the contract is concluded but needs to be identifiable.

2.
The nature and content of the third party’s
right are determined by the contract. The right may take the form of an
exclusion or limitation of the third party’s liability to one of the
contracting parties.

3.
When one of the contracting parties is bound to
render a performance to the third party under the contract, then:

(a)
the third party has the same rights to
performance and remedies for non-performance as if the contracting party was
bound to render the performance under a contract with the third party; and

(b)
the contracting party who is bound may assert
against the third party all defences which the contracting party could assert
against the other party to the contract.

4.
The third party may reject a right conferred
upon them by notice to either of the contracting parties, if that is done
before it has been expressly or impliedly accepted. On such rejection, the
right is treated as never having accrued to the third party.

5.
The contracting parties may remove or modify the
contract term conferring the right if this is done before either of them has
given the third party notice that the right has been conferred.

Chapter 8 Unfair contract terms

Section
1        General provisions

Article 79
Effects of unfair contract terms

1.
A contract term which is supplied by one party
and which is unfair under Sections 2 and 3 of this Chapter is not binding on
the other party.

2.
Where the contract can be maintained without the
unfair contract term, the other contract terms remain binding.

Article 80
Exclusions from unfairness test

1.
Sections 2 and 3 do not apply to contract terms
which reflect rules of the Common European Sales Law which would apply if the
terms did not regulate the matter.

2.
Section 2 does not apply to the definition of
the main subject matter of the contract, or to the appropriateness of the price
to be paid in so far as the trader has complied with the duty of transparency
set out in Article 82.

3.
Section 3 does not apply to the definition of
the main subject matter of the contract or to the appropriateness of the price
to be paid.

Article 81
Mandatory nature

The parties may not exclude the application
of this Chapter or derogate from or vary its effects.

Section
2        Unfair contract terms in contracts between a trader and a consumer

Article 82
Duty of transparency in contract terms not
individually negotiated

Where a trader supplies contract terms
which have not been individually negotiated with the consumer within the
meaning of Article 7, it has a duty to ensure that they are drafted and
communicated in plain, intelligible language.

Article 83
Meaning of "unfair" in contracts between a
trader and a consumer

1.
In a contract between a trader and a consumer, a
contract term supplied by the trader which has not been individually negotiated
within the meaning of Article 7 is unfair for the purposes of this Section if
it causes a significant imbalance in the parties' rights and obligations
arising under the contract, to the detriment of the consumer, contrary to good
faith and fair dealing.

2.
When assessing the unfairness of a contract term
for the purposes of this Section, regard is to be had to:

(a)
whether the trader complied with the duty of
transparency set out in Article 82;

(b)
the nature of what is to be provided under the
contract;

(c)
the circumstances prevailing during the
conclusion of the contract;

(d)
to the other contract terms; and

(e)
to the terms of any other contract on which the
contract depends.

Article 84
Contract terms which are always unfair

A contract term is always unfair for the
purposes of this Section if its object or effect is to:

(a)          exclude or limit the liability of
the trader for death or personal injury caused to the consumer through an act
or omission of the trader or of someone acting on behalf of the trader;

(b)          exclude or limit the liability of
the trader for any loss or damage to the consumer caused deliberately or as a
result of gross negligence;

(c)          limit the trader's obligation to
be bound by commitments undertaken by its authorised agents or make its
commitments subject to compliance with a particular condition the fulfilment of
which depends exclusively on the trader;

(d)          exclude or hinder the consumer's
right to take legal action or exercise any other legal remedy, particularly by
requiring the consumer to take disputes exclusively to an arbitration system
not foreseen generally in legal provisions that apply to contracts between a
trader and a consumer;

(e)          confer exclusive jurisdiction for
all disputes arising under the contract to a court for the place where the
trader is domiciled unless the chosen court is also the court for the place
where the consumer is domiciled;

(f)           give the trader the exclusive
right to determine whether the goods, digital content or related services
supplied are in conformity with the contract or gives the trader the exclusive
right to interpret any contract term;

(g)          provide that the consumer is bound
by the contract when the trader is not;

(h)          require the consumer to use a
more formal method for terminating the contract within the meaning of Article 8
than was used for conclusion of the contract;

(i)           grant the trader a shorter
notice period to terminate the contract than the one required of the consumer;

(j)           oblige the consumer to pay for
goods, digital content or related services not actually delivered, supplied or
rendered;

(k)          determine that non-individually
negotiated contract terms within the meaning of Article 7 prevail or have
preference over contract terms which have been individually negotiated.

Article 85
Contract terms which are presumed to be unfair

A contract term is presumed to be unfair
for the purposes of this Section if its object or effect is to:

(a)          restrict the evidence available
to the consumer or impose on the consumer a burden of proof which should
legally lie with the trader;

(b)          inappropriately exclude or limit
the remedies available to the consumer against the trader or a third party for
non-performance by the trader of obligations under the contract;

(c)          inappropriately exclude or limit
the right to set-off claims that the consumer may have against the trader
against what the consumer may owe to the trader;

(d)          permit a trader to keep money
paid by the consumer if the latter decides not to conclude the contract, or
perform obligations under it, without providing for the consumer to receive
compensation of an equivalent amount from the trader in the reverse situation;

(e)          require a consumer who fails to
perform obligations under the contract to pay a disproportionately high amount
by way of damages or a stipulated payment for non-performance;

(f)           entitle a trader to withdraw
from or terminate the contract within the meaning of Article 8 on a
discretionary basis without giving the same right to the consumer, or entitle a
trader to keep money paid for related services not yet supplied in the case
where the trader withdraws from or terminates the contract;

(g)          enable a trader to terminate a
contract of indeterminate duration without reasonable notice, except where
there are serious grounds for doing so;

(h)          automatically extend a contract
of fixed duration unless the consumer indicates otherwise, in cases where
contract terms provide for an unreasonably early deadline for giving notice;

(i)           enable a trader to alter
contract terms unilaterally without a valid reason which is specified in the
contract; this does not affect contract terms under which a trader reserves the
right to alter unilaterally the terms of a contract of indeterminate duration,
provided that the trader is required to inform the consumer with reasonable
notice, and that the consumer is free to terminate the contract at no cost to
the consumer;

(j)           enable a trader to alter
unilaterally without a valid reason any characteristics of the goods, digital
content or related services to be provided or any other features of
performance;

(k)          provide that the price of goods,
digital content or related services is to be determined at the time of delivery
or supply, or allow a trader to increase the price without giving the consumer
the right to withdraw if the increased price is too high in relation to the
price agreed at the conclusion of the contract; this does not affect price-indexation
clauses, where lawful, provided that the method by which prices vary is
explicitly described;

(l)           oblige a consumer to perform all
their obligations under the contract where the trader fails to perform its own;

(m)         allow a trader to transfer its
rights and obligations under the contract without the consumer’s consent,
unless it is to a subsidiary controlled by the trader, or as a result of a
merger or a similar lawful company transaction, and such transfer is not likely
to negatively affect any right of the consumer;

(n)          allow a trader, where what has
been ordered is unavailable, to supply an equivalent without having expressly
informed the consumer of this possibility and of the fact that the trader must
bear the cost of returning what the consumer has received under the contract if
the consumer exercises a right to reject performance;

(o)          allow a trader to reserve an
unreasonably long or inadequately specified period to accept or refuse an
offer;

(p)          allow a trader to reserve an
unreasonably long or inadequately specified period to perform the obligations
under the contract;

(q)          inappropriately exclude or limit
the remedies available to the consumer against the trader or the defences
available to the consumer against claims by the trader;

(r)           subject performance of
obligations under the contract by the trader, or subject other beneficial
effects of the contract for the consumer, to particular formalities that are
not legally required and are unreasonable;

(s)          require from the consumer
excessive advance payments or excessive guarantees of performance of
obligations;

(t)           unjustifiably prevent the
consumer from obtaining supplies or repairs from third party sources;

(u)          unjustifiably bundle the contract
with another one with the trader, a subsidiary of the trader, or a third party,
in a way that cannot be expected by the consumer;

(v)          impose an excessive burden on the
consumer in order to terminate a contract of indeterminate duration;

(w)         make the initial contract period,
or any renewal period, of a contract for the protracted provision of goods,
digital content or related services longer than one year, unless the consumer
may terminate the contract at any time with a termination period of no more
than 30 days.

Section
3        Unfair contract terms in contracts between traders

Article 86
Meaning of “unfair” in contracts between traders

1.
In a contract between traders, a contract term
is unfair for the purposes of this Section only if:

(a)
it forms part of not individually negotiated
terms within the meaning of Article 7; and

(b)
it is of such a nature that its use grossly
deviates from good commercial practice, contrary to good faith and fair
dealing.

2.
When assessing the unfairness of a contract term
for the purposes of this Section, regard is to be had to:

(a)
the nature of what is to be provided under the
contract;

(b)
the circumstances prevailing during the
conclusion of the contract;

(c)
the other contract terms; and

(d)
the terms of any other contract on which the
contract depends.

Part IV   Obligations and remedies of the parties to a sales
contract or a contract for the supply of digital content

Chapter 9 General provisions

Article 87
Non-performance and fundamental non-performance

1.
Non-performance of an obligation is any failure
to perform that obligation, whether or not the failure is excused, and
includes:

(a)
non-delivery or delayed delivery of the goods;

(b)
 non-supply or delayed supply of the digital
content;

(c)
delivery of goods which are not in conformity
with the contract;

(d)
supply of digital content which is not in
conformity with the contract;

(e)
non-payment or late payment of the price; and

(f)
any other purported performance which is not in
conformity with the contract.

2.
Non-performance of an obligation by one party is
fundamental if:

(a)
it substantially deprives the other party of what
that party was entitled to expect under the contract, unless at the time of
conclusion of the contract the non-performing party did not foresee and could
not be expected to have foreseen that result; or

(b)
it is of such a nature as to make it clear that
the non-performing party’s future performance cannot be relied on.

Article 88
Excused non-performance

1.
A party’s non-performance of an obligation is
excused if it is due to an impediment beyond that party’s control and if that
party could not be expected to have taken the impediment into account at the
time of the conclusion of the contract, or to have avoided or overcome the
impediment or its consequences.

2.
Where the impediment is only temporary the
non-performance is excused for the period during which the impediment exists.
However, if the delay amounts to a fundamental non-performance, the other party
may treat it as such.

3.
The party who is unable to perform has a duty to
ensure that notice of the impediment and of its effect on the ability to
perform reaches the other party without undue delay after the first party
becomes, or could be expected to have become, aware of these circumstances. The
other party is entitled to damages for any loss resulting from the breach of
this duty.

Article 89
Change of circumstances

1.
A party must perform its obligations even if
performance has become more onerous, whether because the cost of performance
has increased or because the value of what is to be received in return has
diminished.

Where performance becomes excessively onerous
because of an exceptional change of circumstances, the parties have a duty to
enter into negotiations with a view to adapting or terminating the contract.

2.
If the parties fail to reach an agreement within
a reasonable time, then, upon request by either party a court may:

(a)
adapt the contract in order to bring it into
accordance with what the parties would reasonably have agreed at the time of
contracting if they had taken the change of circumstances into account; or

(b)
terminate the contract within the meaning of
Article 8 at a date and on terms to be determined by the court.

3.
Paragraphs 1 and 2 apply only if:

(a)
the change of circumstances occurred after the
time when the contract was concluded;

(b)
the party relying on the change of circumstances
did not at that time take into account, and could not be expected to have taken
into account, the possibility or scale of that change of circumstances; and

(c)
the aggrieved party did not assume, and cannot
reasonably be regarded as having assumed, the risk of that change of circumstances.

4.
For the purpose of paragraphs 2 and 3 a 'court'
includes an arbitral tribunal.

Article 90
Extended application of rules on payment and on
goods or digital content not accepted

1.
Unless otherwise provided, the rules on payment
of the price by the buyer in Chapter 12 apply with appropriate adaptations to
other payments.

2.
Article 97 applies with appropriate adaptations
to other cases where a person is left in possession of goods or digital content
because of a failure by another person to take them when bound to do so.

Chapter 10         The seller's obligations

Section
1        General provisions

Article 91
Main obligations of the seller

The seller of goods or the supplier of
digital content (in this part referred to as 'the seller') must:

(a)          deliver the goods or supply the
digital content;

(b)          transfer the ownership of the
goods, including the tangible medium on which the digital content is supplied;

(c)          ensure that the goods or the
digital content are in conformity with the contract;

(d)          ensure that the buyer has the
right to use the digital content in accordance with the contract; and

(e)          deliver such documents
representing or relating to the goods or documents relating to the digital
content as may be required by the contract.

Article 92
Performance by a third party

1.
A seller may entrust performance to another
person, unless personal performance by the seller is required by the contract
terms.

2.
A seller who entrusts performance to another
person remains responsible for performance.

3.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of
paragraph (2) or derogate from or vary its effects.

Section
2        Delivery

Article 93
Place of delivery

1.
Where the place of delivery cannot be otherwise
determined, it is:

(a)
in the case of a consumer sales contract or a
contract for the supply of digital content which is a distance or off-premises
contract, or in which the seller has undertaken to arrange carriage to the
buyer, the consumer’s place of residence at the time of the conclusion of the
contract;

(b)
in any other case,

(i) where the contract of sale involves
carriage of the goods by a carrier or         series of carriers, the nearest collection point of the first
carrier ;

(ii) where the contract does not involve carriage,
the seller’s place of      business at the time of conclusion of the contract.

2.
If the seller has more than one place of
business, the place of business for the purposes of point (b) of paragraph 1 is
that which has the closest relationship to the obligation to deliver.

Article 94
Method of delivery

1.
Unless agreed otherwise, the seller fulfils the
obligation to deliver:

(a)
in the case of a consumer sales contract or a
contract for the supply of digital content which is a distance or off-premises
contract or in which the seller has undertaken to arrange carriage to the
buyer, by transferring the physical possession or control of the goods or the
digital content to the consumer;

(b)
in other cases in which the contract involves
carriage of the goods by a carrier, by handing over the goods to the first
carrier for transmission to the buyer and by handing over to the buyer any
document necessary to enable the buyer to take over the goods from the carrier
holding the goods; or

(c)
in cases that do not fall within points (a) or
(b), by making the goods or the digital content, or where it is agreed that the
seller need only deliver documents representing the goods, the documents,
available to the buyer.

2.
In points (a) and (c) of paragraph 1, any
reference to the consumer or the buyer includes a third party, not being the
carrier, indicated by the consumer or the buyer in accordance with the
contract.

Article 95
Time of delivery

1.
Where the time of delivery cannot be otherwise
determined, the goods or the digital content must be delivered without undue
delay after the conclusion of the contract.

2.
In contracts between a trader and a consumer,
unless agreed otherwise by the parties, the trader must deliver the goods or
the digital content not later than 30 days from the conclusion of the contract.

Article 96
Seller’s obligations regarding carriage of the goods

1.
Where the contract requires the seller to
arrange for carriage of the goods, the seller must conclude such contracts as
are necessary for carriage to the place fixed by means of transportation
appropriate in the circumstances and according to the usual terms for such
transportation.

2.
Where the seller, in accordance with the
contract, hands over the goods to a carrier and if the goods are not clearly
identified as the goods to be supplied under the contract by markings on the
goods, by shipping documents or otherwise, the seller must give the buyer
notice of the consignment specifying the goods.

3.
Where the contract does not require the seller
to effect insurance in respect of the carriage of the goods, the seller must,
at the buyer’s request, provide the buyer with all available information
necessary to enable the buyer to effect such insurance.

Article 97
Goods or digital content not accepted by the buyer

1.
A seller who is left in possession of the goods
or the digital content because the buyer, when bound to do so, has failed to
take delivery must take reasonable steps to protect and preserve them.

2.
The seller is discharged from the obligation to
deliver if the seller:

(a)
deposits the goods or the digital content on
reasonable terms with a third party to be held to the order of the buyer, and
notifies the buyer of this; or

(b)
sells the goods or the digital content on
reasonable terms after notice to the buyer, and pays the net proceeds to the
buyer.

3.
The seller is entitled to be reimbursed or to
retain out of the proceeds of sale any costs reasonably incurred.

Article 98
Effect on passing of risk

The effect of delivery on the passing of
risk is regulated by Chapter 14.

Section
3        Conformity of the goods and digital content

Article 99
Conformity with the contract

1.
In order to conform with the contract, the goods
or digital content must:

(a)
be of the quantity, quality and description
required by the contract;

(b)
be contained or packaged in the manner required
by the contract; and

(c)
be supplied along with any accessories,
installation instructions or other instructions required by the contract.

2.
In order to conform with the contract the goods
or digital content must also meet the requirements of Articles 100, 101 and
102, save to the extent that the parties have agreed otherwise.

3.
In a consumer sales contract, any agreement
derogating from the requirements of Articles 100, 102 and 103 to the detriment
of the consumer is valid only if, at the time of the conclusion of the
contract, the consumer knew of the specific condition of the goods or the
digital content and accepted the goods or the digital content as being in
conformity with the contract when concluding it.

4.
In a consumer sales contract, the parties may
not, to the detriment of the consumer, exclude the application of paragraph 3
or derogate from or vary its effects.

Article 100
Criteria for conformity of the goods and digital
content

The goods or digital content must:

(a)          be fit for any particular purpose
made known to the seller at the time of the conclusion of the contract, except
where the circumstances show that the buyer did not rely, or that it was
unreasonable for the buyer to rely, on the seller’s skill and judgement;

(b)          be fit for the purposes for which
goods or digital content of the same description would ordinarily be used;

(c)          possess the qualities of goods or
digital content which the seller held out to the buyer as a sample or model;

(d)          be contained or packaged in the
manner usual for such goods or, where there is no such manner, in a manner
adequate to preserve and protect the goods;

(e)          be supplied along with such
accessories, installation instructions or other instructions as the buyer may
expect to receive;

(f)           possess the qualities and
performance capabilities indicated in any pre-contractual statement which forms
part of the contract terms by virtue of Article 69; and

(g)          possess such qualities and
performance capabilities as the buyer may expect. When determining what the
consumer may expect of the digital content regard is to be had to whether or
not the digital content was supplied in exchange for the payment of a price.

Article 101
Incorrect installation under a consumer sales
contract

1.
Where goods or digital content supplied under a
consumer sales contract are incorrectly installed, any lack of conformity
resulting from the incorrect installation is regarded as lack of conformity of
the goods or the digital content if:

(a)
the goods or the digital content were installed
by the seller or under the seller’s responsibility; or

(b)
the goods or the digital content were intended
to be installed by the consumer and the incorrect installation was due to a
shortcoming in the installation instructions.

2.
The parties may not, to the detriment of the consumer,
exclude the application of this Article or derogate from or vary its effects.

Article 102
Third party rights or claims

1.
The goods must be free from and the digital
content must be cleared of any right or not obviously unfounded claim of a
third party.

2.
As regards rights or claims based on
intellectual property, subject to paragraphs 3 and 4, the goods must be free
from and the digital content must be cleared of any right or not obviously
unfounded claim of a third party:

(a)
under the law of the state where the goods or
digital content will be used according to the contract or, in the absence of
such an agreement, under the law of the state of the buyer's place of business
or in contracts between a trader and a consumer the consumer's place of
residence indicated by the consumer at the time of the conclusion of the
contract; and

(b)
which the seller knew of or could be expected to
have known of at the time of the conclusion of the contract.

3.
In contracts between businesses, paragraph 2
does not apply where the buyer knew or could be expected to have known of the
rights or claims based on intellectual property at the time of the conclusion
of the contract.

4.
In contracts between a trader and a consumer, paragraph
2 does not apply where the consumer knew of the rights or claims based on
intellectual property at the time of the conclusion of the contract.

5.
In contracts between a trader and a consumer,
the parties may not, to the detriment of the consumer, exclude the application
of this Article or derogate from or vary its effects.

Article 103
Limitation on conformity of digital content

Digital content is
not considered as not conforming to the contract for the sole reason that
updated digital content has become available after the conclusion of the
contract.

Article 104
Buyer’s knowledge
of lack of conformity in a contract between traders

In a contract between traders, the seller
is not liable for any lack of conformity of the goods if, at the time of the
conclusion of the contract, the buyer knew or could not have been unaware of
the lack of conformity.

Article 105
Relevant time for establishing conformity

1.
The seller is liable for any lack of conformity
which exists at the time when the risk passes to the buyer under Chapter 14.

2.
In a consumer sales contract, any lack of
conformity which becomes apparent within six months of the time when risk
passes to the buyer is presumed to have existed at that time unless this is
incompatible with the nature of the goods or digital content or with the nature
of the lack of conformity.

3.
In a case governed by point (a) of Article
101(1) any reference in paragraphs 1 or 2 of this Article to the time when risk
passes to the buyer is to be read as a reference to the time when the
installation is complete. In a case governed by point (b) of Article 101(1) it
is to be read as a reference to the time when the consumer had reasonable time
for the installation.

4.
Where the digital content must be subsequently
updated by the trader, the trader must ensure that the digital content remains
in conformity with the contract throughout the duration of the contract.

5.
In a contract between a trader and a consumer,
the parties may not, to the detriment of a consumer, exclude the application of
this Article or derogate from or vary its effect.

Chapter 11         The buyer’s remedies

Section
1        General provisions

Article 106
Overview of buyer’s remedies

1.
In the case of non-performance of an obligation
by the seller, the buyer may do any of the following:

(a)
require performance, which includes specific
performance, repair or       replacement of the goods or digital content, under
Section 3 of this Chapter;

(b)
withhold the buyer’s own performance under
Section 4 of this Chapter;

(c)
terminate the contract under Section 5 of this
Chapter and claim the return of any price already paid, under Chapter 17;

(d)
reduce the price under Section 6 of this
Chapter; and

(e)
claim damages under Chapter 16.

2.
If the buyer is a trader:

(a)
the buyer’s rights to exercise any remedy except
withholding of performance      are subject to cure by the seller as set out in
Section 2 of this Chapter; and

(b)
the buyer’s rights to rely on lack of conformity
are subject to the requirements    of examination and notification set out in
Section 7 of this Chapter.

3.
If the buyer is a consumer:

(a)
the buyer’s rights are not subject to cure by
the seller; and

(b)
the requirements of examination and notification
set out in Section 7 of this          Chapter do not apply.

4.
If the seller’s non-performance is excused, the
buyer may resort to any of the remedies referred to in paragraph 1 except
requiring performance and damages.

5.
The buyer may not resort to any of the remedies
referred to in paragraph 1 to the extent that the buyer caused the seller’s
non-performance.

6.
Remedies which are not incompatible may be
cumulated.

Article 107
Limitation of remedies for digital content not
supplied in exchange for a price

Where digital content is not supplied in
exchange for the payment of a price, the buyer may not resort to the remedies
referred to in points (a) to (d) of Article 106(1) . The buyer may only claim
damages under point (e) of Article 106 (1) for loss or damage caused to the
buyer's property, including hardware, software and data, by the lack of
conformity of the supplied digital content, except for any gain of which the
buyer has been deprived by that damage.

Article 108
Mandatory nature

In a contract between a trader and a
consumer, the parties may not, to the detriment of the consumer, exclude the
application of this Chapter, or derogate from or vary its effect before the
lack of conformity is brought to the trader's attention by the consumer.

Section
2        Cure by the seller

Article 109
Cure by the seller

1.
A seller who has tendered performance early and
who has been notified that the performance is not in conformity with the
contract may make a new and conforming tender if that can be done within the
time allowed for performance.

2.
In cases not covered by paragraph 1 a seller who
has tendered a performance which is not in conformity with the contract may,
without undue delay on being notified of the lack of conformity, offer to cure
it at its own expense.

3.
An offer to cure is not precluded by notice of
termination.

4.
The buyer may refuse an offer to cure only if:

(a)
cure cannot be effected promptly and without
significant inconvenience to the     buyer;

(b)
the buyer has reason to believe that the
seller’s future performance cannot be     relied on; or

(c)
delay in performance would amount to a
fundamental non-performance.

5.
The seller has a reasonable period of time to
effect cure.

6.
The buyer may withhold performance pending cure,
but the rights of the buyer which are inconsistent with allowing the seller a
period of time to effect cure are suspended until that period has expired.

7.
Notwithstanding cure, the buyer retains the
right to claim damages for delay as well as for any harm caused or not prevented
by the cure.

Section
3        Requiring performance

Article 110
Requiring performance of seller’s obligations

1.
The buyer is entitled to require performance of
the seller’s obligations.

2.
The performance which may be required includes
the remedying free of charge of a performance which is not in conformity with
the contract.

3.
Performance cannot be required where:

(a)
performance would be impossible or has become
unlawful; or

(b)
the burden or expense of performance would be
disproportionate to the benefit that the buyer would obtain.

Article 111
Consumer’s choice between repair and replacement

1.
Where, in a consumer sales contract, the trader
is required to remedy a lack of conformity pursuant to Article 110(2) the
consumer may choose between repair and replacement unless the option chosen
would be unlawful or impossible or, compared to the other option available,
would impose costs on the seller that would be disproportionate taking into
account:

(a)
the value the goods would have if there were no
lack of conformity;

(b)
the significance of the lack of conformity; and

(c)
whether the alternative remedy could be
completed without significant    inconvenience to the consumer.

2.
If the consumer has required the remedying of
the lack of conformity by repair or replacement pursuant to paragraph 1, the
consumer may resort to other remedies only if the trader has not completed
repair or replacement within a reasonable time, not exceeding 30 days. However,
the consumer may withhold performance during that time.

Article 112
Return of replaced item

1.
Where the seller has remedied the lack of
conformity by replacement, the seller has a right and an obligation to take
back the replaced item at the seller’s expense.

2.
The buyer is not liable to pay for any use made
of the replaced item in the period prior to the replacement.

Section
4        Withholding performance of buyer’s obligations

Article 113
 Right to withhold performance

1.
A buyer who is to perform at the same time as,
or after, the seller performs has a right to withhold performance until the
seller has tendered performance or has performed.

2.
A buyer who is to perform before the seller
performs and who reasonably believes that there will be non-performance by the
seller when the seller’s performance becomes due may withhold performance for
as long as the reasonable belief continues.

3.
The performance which may be withheld under this
Article is the whole or part of the performance to the extent justified by the
non-performance. Where the seller's obligations are to be performed in separate
parts or are otherwise divisible, the buyer may withhold performance only in
relation to that part which has not been performed, unless the seller's
non-performance is such as to justify withholding the buyer's performance as a
whole.

Section 5        Termination

Article 114
Termination for non-performance

1.
A buyer may terminate the contract within the
meaning of Article 8 if the seller’s non-performance under the contract is
fundamental within the meaning of Article 87 (2).

2.
In a consumer sales contract and a contract for
the supply of digital content between a trader and a consumer, where there is a
non-performance because the goods do not conform to the contract, the consumer
may terminate the contract unless the lack of conformity is insignificant.

Article 115
Termination for delay in delivery after notice
fixing additional time for performance

1.
A buyer may terminate the contract in a case of
delay in delivery which is not in itself fundamental if the buyer gives notice
fixing an additional period of time of reasonable length for performance and
the seller does not perform within that period.

2.
The additional period referred to in paragraph 1
is taken to be of reasonable length if the seller does not object to it without
undue delay.

3.
Where the notice provides for automatic
termination if the seller does not perform within the period fixed by the
notice, termination takes effect after that period without further notice.

Article 116
Termination for anticipated non-performance

A buyer may terminate the contract before
performance is due if the seller has declared, or it is otherwise clear, that
there will be a non-performance, and if the non-performance would be such as to
justify termination.

Article 117
Scope of right to terminate

1.
Where the seller’s obligations under the
contract are to be performed in separate parts or are otherwise divisible, then
if there is a ground for termination under this Section of a part to which a
part of the price can be apportioned, the buyer may terminate only in relation
to that part.

2.
Paragraph 1 does not apply if the buyer cannot
be expected to accept performance of the other parts or the non-performance is
such as to justify termination of the contract as a whole.

3.
Where the seller’s obligations under the
contract are not divisible or a part of the price cannot be apportioned, the
buyer may terminate only if the non-performance is such as to justify
termination of the contract as a whole.

Article 118
Notice of termination

A right to terminate under this Section is
exercised by notice to the seller.

Article 119
Loss of right to terminate

1.
The buyer loses the right to terminate under
this Section if notice of termination is not given within a reasonable time
from when the right arose or the buyer became, or could be expected to have
become, aware of the non-performance, whichever is later.

2.
Paragraph 1 does not apply:

(a)
where the buyer is a consumer; or

(b)
where no performance at all has been tendered.

Section
6        Price reduction

Article 120
Right to reduce price

1.
A buyer who accepts a performance not conforming
to the contract may reduce the price. The reduction is to be proportionate to
the decrease in the value of what was received in performance at the time
performance was made compared to the value of what would have been received by
a conforming performance.

2.
A buyer who is entitled to reduce the price
under paragraph 1 and who has already paid a sum exceeding the reduced price
may recover the excess from the seller.

3.
A buyer who reduces the price cannot also
recover damages for the loss thereby compensated but remains entitled to
damages for any further loss suffered.

Section
7        Requirements of examination and notification in a contract between
traders

Article 121
Examination of the goods in contracts between
traders

1.
In a contract between traders the buyer is
expected to examine the goods, or cause them to be examined, within as short a
period as is reasonable not exceeding 14 days from the date of delivery of the
goods, supply of digital content or provision of related services.

2.
If the contract involves carriage of the goods,
examination may be deferred until after the goods have arrived at their
destination.

3.
If the goods are redirected in transit, or
redispatched by the buyer before the buyer has had a reasonable opportunity to
examine them, and at the time of the conclusion of the contract the seller knew
or could be expected to have known of the possibility of such redirection or
redispatch, examination may be deferred until after the goods have arrived at
the new destination.

Article 122
Requirement of notification of lack of conformity in
sales contracts between traders

1.
In a contract between traders the buyer may not
rely on a lack of conformity if the buyer does not give notice to the seller
within a reasonable time specifying the nature of the lack of conformity.

The time starts to run when the
goods are supplied or when the buyer discovers or         could be expected to
discover the lack of conformity, whichever is later.

2.
The buyer loses the right to rely on a lack of
conformity if the buyer does not give the seller notice of the lack of
conformity within two years from the time at which the goods were actually
handed over to the buyer in accordance with the contract.

3.
Where the parties have agreed that the goods
must remain fit for a particular purpose or for their ordinary purpose during a
fixed period of time, the period for giving notice under paragraph 2 does not
expire before the end of the agreed period.

4.
Paragraph 2 does not apply in respect of the
third party claims or rights referred to in Article 102.

5.
The buyer does not have to notify the seller
that not all the goods have been delivered if the buyer has reason to believe
that the remaining goods will be delivered.

6.
The seller is not entitled to rely on this
Article if the lack of conformity relates to facts of which the seller knew or
could be expected to have known and which the seller did not disclose to the
buyer.

Chapter 12         The buyer's obligations

Section
1        General provisions

Article 123
Main obligations of the buyer

1.
The buyer must:

(a)
pay the price;

(b)
take delivery of the goods or the digital
content; and

(c)
take over documents representing or relating to
the goods or documents relating to digital content as may be required by the
contract.

2.
Point (a) of paragraph 1 does not apply to
contracts for the supply of digital content where the digital content is not
supplied in exchange for the payment of a price.

Section
2        Payment of the price

Article 124
Means of payment

1.
Payment shall be made by the means of payment
indicated by the contract terms or, if there is no such indication, by any
means used in the ordinary course of business at the place of payment taking
into account the nature of the transaction .

2.
A seller who accepts a cheque or other order to
pay or a promise to pay is presumed to do so only on condition that it will be
honoured. The seller may enforce the original obligation to pay if the order or
promise is not honoured.

3.
The buyer’s original obligation is extinguished
if the seller accepts a promise to pay from a third party with whom the seller
has a pre-existing arrangement to accept the third party’s promise as a means
of payment.

4.
In a contract between a trader and a consumer,
the consumer is not liable, in respect of the use of a given means of payment,
for fees that exceed the cost borne by the trader for the use of such means.

Article 125
Place of payment

1.
Where the place of payment cannot otherwise be
determined it is the seller’s place of business at the time of conclusion of
the contract.

2.
If the seller has more than one place of
business, the place of payment is the place of business of the seller which has
the closest relationship to the obligation to pay.

Article 126
Time of payment

1.
Payment of the price is due at the moment of
delivery.

2.
The seller may reject an offer to pay before
payment is due if it has a legitimate interest in so doing.

Article 127
Payment by a third party

1.
A buyer may entrust payment to another person. A
buyer who entrusts payment to another person remains responsible for payment.

2.
The seller cannot refuse payment by a third
party if:

(a)
the third party acts with the assent of the
buyer; or

(b)
the third party has a legitimate interest in
paying and the buyer has failed to         pay or it is clear that the buyer
will not pay at the time that payment is due.

3.
Payment by a third party in accordance with
paragraphs 1 or 2 discharges the buyer from liability to the seller.

4.
Where the seller accepts payment by a third
party in circumstances not covered by paragraphs 1 or 2 the buyer is discharged
from liability to the seller but the seller is liable to the buyer for any loss
caused by that acceptance.

Article 128
Imputation of payment

1.
Where a buyer has to make several payments to
the seller and the payment made does not suffice to cover all of them, the
buyer may at the time of payment notify the seller of the obligation to which
the payment is to be imputed.

2.
If the buyer does not make a notification under
paragraph 1 the seller may, by notifying the buyer within a reasonable time,
impute the performance to one of the obligations.

3.
An imputation under paragraph 2 is not effective
if it is to an obligation which is not yet due or is disputed.

4.
In the absence of an effective imputation by
either party, the payment is imputed to that obligation which satisfies one of
the following criteria in the sequence indicated:

(a)
the obligation which is due or is the first to
fall due;

(b)
the obligation for which the seller has no or
the least security;

(c)
the obligation which is the most burdensome for
the buyer;

(d)
the obligation which arose first.

If none of those criteria applies, the payment
is imputed proportionately to all the obligations.

5.
The payment may be imputed under paragraph 2, 3
or 4 to an obligation which is unenforceable as a result of prescription only
if there is no other obligation to which the payment could be imputed in
accordance with those paragraphs.

6.
In relation to any one obligation a payment by
the buyer is to be imputed, first, to expenses, secondly, to interest, and
thirdly, to principal, unless the seller makes a different imputation.

Section
3        Taking delivery

Article 129
Taking delivery

The buyer fulfils the obligation to take
delivery by:

(a)          doing all the acts which
could be expected in order to enable the seller to perform the obligation to
deliver; and

(b)          taking over the goods, or the
documents representing the goods or digital content, as required by the
contract.

Article 130
Early delivery and delivery of wrong quantity

1.
If the seller delivers the goods or supplies the
digital content before the time fixed, the buyer must take delivery unless the
buyer has a legitimate interest in refusing to do so.

2.
If the seller delivers a quantity of goods or
digital content less than that provided for in the contract the buyer must take
delivery unless the buyer has a legitimate interest in refusing to do so.

3.
If the seller delivers a quantity of goods or
digital content greater than that provided for by the contract, the buyer may
retain or refuse the excess quantity.

4.
If the buyer retains the excess quantity it is
treated as having been supplied under the contract and must be paid for at the
contractual rate.

5.
In a consumer sales contract paragraph 4 does
not apply if the buyer reasonably believes that the seller has delivered the
excess quantity intentionally and without error, knowing that it had not been
ordered.

6.
This Article does not apply to contracts for the
supply of digital content where the digital content is not supplied in exchange
for the payment of a price.

Chapter 13         The seller’s remedies

Section
1        General provisions

Article 131
Overview of seller's remedies

1.
In the case of a non-performance of an
obligation by the buyer, the seller may do any of the following:

(a)
require performance under Section 2 of this
Chapter;

(b)
withhold the seller’s own performance under
Section 3 of this Chapter;

(c)
terminate the contract under Section 4 of this
Chapter; and

(d)
claim interest on the price or damages under
Chapter 16.

2.
If the buyer’s non-performance is excused, the
seller may resort to any of the remedies referred to in paragraph 1 except
requiring performance and damages.

3.
The seller may not resort to any of the remedies
referred to in paragraph 1 to the extent that the seller caused the buyer’s
non-performance.

4.
Remedies which are not incompatible may be
cumulated.

Section
2        Requiring performance

Article 132
Requiring performance of buyer’s obligations

1.
The seller is entitled to recover payment of the
price when it is due, and to require performance of any other obligation
undertaken by the buyer.

2.
Where the buyer has not yet taken over the goods
or the digital content and it is clear that the buyer will be unwilling to
receive performance, the seller may nonetheless require the buyer to take
delivery, and may recover the price, unless the seller could have made a
reasonable substitute transaction without significant effort or expense.

Section
3        Withholding performance of seller’s obligations

Article 133
Right to withhold performance

1.
A seller who is to perform at the same time as,
or after, the buyer performs has a right to withhold performance until the
buyer has tendered performance or has performed.

2.
A seller who is to perform before the buyer
performs and who reasonably believes that there will be non-performance by the
buyer when the buyer’s performance becomes due may withhold performance for as
long as the reasonable belief continues. However, the right to withhold
performance is lost if the buyer gives an adequate assurance of due performance
or provides adequate security.

3.
The performance which may be withheld under this
Article is the whole or part of the performance to the extent justified by the
non-performance. Where the buyer's obligations are to be performed in separate
parts or are otherwise divisible, the seller may withhold performance only in
relation to that part which has not been performed, unless the buyer's
non-performance is such as to justify withholding the seller's performance as a
whole.

Section
4        Termination

Article 134
Termination for fundamental non-performance

A seller may terminate the contract within
the meaning of Article 8 if the buyer’s non-performance under the contract is
fundamental within the meaning of Article 87 (2).

Article 135
Termination for delay after notice fixing additional
time for performance

1.
A seller may terminate in a case of delay in
performance which is not in itself fundamental if the seller gives a notice
fixing an additional period of time of reasonable length for performance and
the buyer does not perform within that period.

2.
The period is taken to be of reasonable length
if the buyer does not object to it without undue delay. In relations between a
trader and a consumer, the additional time for performance must not end before
the 30 day period referred to Article 167(2).

3.
Where the notice provides for automatic
termination if the buyer does not perform within the period fixed by the
notice, termination takes effect after that period without further notice.

4.
In a consumer sales contract, the parties may
not, to the detriment of the consumer, exclude the application of this Article
or derogate from or vary its effects.

Article 136
Termination for anticipated non-performance

A seller may terminate the contract before
performance is due if the buyer has declared, or it is otherwise clear, that
there will be a non-performance, and if the non-performance would be
fundamental.

Article 137
Scope of right to terminate

1. Where the buyer’s obligations under the
contract are to be performed in separate parts or are otherwise divisible, then
if there is a ground for termination under this Section of a part which
corresponds to a divisible part of the seller’s obligations, the seller may
terminate only in relation to that part.

2. Paragraph 1 does not apply if the
non-performance is fundamental in relation to the contract as a whole.

3. Where the buyer’s obligations under the
contract are not to be performed in separate parts, the seller may terminate
only if the non-performance is fundamental in relation to the contract as a
whole.

Article 138
Notice of termination

A right to terminate the contract under
this Section is exercised by notice to the buyer.

Article 139
Loss of right to terminate

1.
Where performance has been tendered late or a
tendered performance otherwise does not conform to the contract the seller
loses the right to terminate under this Section unless notice of termination is
given within a reasonable time from when the seller has become, or could be
expected to have become, aware of the tender or the lack of conformity.

2.
A seller loses a right to terminate by notice
under Articles 136 unless the seller gives notice of termination within a
reasonable time after the right has arisen.

3.
Where the buyer has not paid the price or has
not performed in some other way which is fundamental, the seller retains the
right to terminate.

Chapter 14         Passing of risk

Section
1        General provisions

Article 140
Effect of passing of risk

Loss of, or damage to, the goods or the
digital content after the risk has passed to the buyer does not discharge the
buyer from the obligation to pay the price, unless the loss or damage is due to
an act or omission of the seller.

Article 141
Identification of goods or digital content to
contract

The risk does not pass to the buyer until
the goods or the digital content are clearly identified as the goods or digital
content to be supplied under the contract, whether by the initial agreement, by
notice given to the buyer or otherwise.

Section
2        Passing of risk in consumer sales contracts

Article 142
Passing of risk in a consumer sales contract

1.
In a consumer sales contract, the risk passes at
the time when the consumer or a third party designated by the consumer, not
being the carrier, has acquired the physical possession of the goods or the
tangible medium on which the digital content is supplied.

2.
In a contract for the supply of digital content
not supplied on a tangible medium, the risk passes at the time when the
consumer or a third party designated by the consumer for this purpose has
obtained the control of the digital content.

3.
Except where the contract is a distance or
off-premises contract, paragraphs 1 and 2 do not apply where the consumer fails
to perform the obligation to take over the goods or the digital content and the
non-performance is not excused under Article 88. In this case, the risk passes
at the time when the consumer, or the third party designated by the consumer,
would have acquired the physical possession of the goods or obtained the
control of the digital content if the obligation to take them over had been
performed.

4.
Where the consumer arranges the carriage of the
goods or the digital content supplied on a tangible medium and that choice was
not offered by the trader, the risk passes when the goods or the digital
content supplied on a tangible medium are handed over to the carrier, without
prejudice to the rights of the consumer against the carrier.

5.
The parties may not, to the detriment of the
consumer, exclude the application of this Article or derogate from or vary its
effects.

Section 3        Passing
of risk in contracts between traders

Article 143
Time when risk passes

1.
In a contract between traders the risk passes
when the buyer takes delivery of the goods or digital content or the documents
representing the goods.

2.
Paragraph 1 is subject to Articles 144, 145 and
146.

Article 144
Goods placed at buyer’s disposal

1.
If the goods or the digital content are placed
at the buyer’s disposal and the buyer is aware of this, the risk passes to the
buyer at the time when the goods or digital content should have been taken
over, unless the buyer was entitled to withhold taking of delivery pursuant to
Article 113.

2.
If the goods or the digital content are placed
at the buyer’s disposal at a place other than a place of business of the
seller, the risk passes when delivery is due and the buyer is aware of the fact
that the goods or digital content are placed at the buyer’s disposal at that
place.

Article 145
Carriage of the goods

1.
This Article applies to a contract of sale which
involves carriage of goods.

2.
If the seller is not bound to hand over the
goods at a particular place, the risk passes to the buyer when the goods are
handed over to the first carrier for transmission to the buyer in accordance
with the contract.

3.
If the seller is bound to hand over the goods to
a carrier at a particular place, the risk does not pass to the buyer until the
goods are handed over to the carrier at that place.

4.
The fact that the seller is authorised to retain
documents controlling the disposition of the goods does not affect the passing
of the risk.

Article 146
Goods sold in transit

1.
This Article applies to a contract of sale which
involves goods sold in transit.

2.
The risk passes to the buyer as from the time
the goods were handed over to the first carrier. However, if the circumstances
so indicate, the risk passes to the buyer when the contract is concluded.

3.
If at the time of the conclusion of the contract
the seller knew or could be expected to have known that the goods had been lost
or damaged and did not disclose this to the buyer, the loss or damage is at the
risk of the seller.

Part V     Obligations and remedies of
the parties to a related service contract

Chapter 15         Obligations
and remedies of the parties

Section 1        Application of certain general rules on sales
contracts

Article 147
Application of certain general rules on sales
contracts

1.
The rules in Chapter 9 apply for the purposes of
this Part.

2.
Where a sales contract or a contract for the
supply of digital content is terminated any related service contract is also
terminated.

Section
2        Obligations of the service provider

Article 148
Obligation to achieve result and obligation of care
and skill

1.
The service provider must achieve any specific
result required by the contract.

2.
In the absence of any express or implied
contractual obligation to achieve a specific result, the service provider must
perform the related service with the care and skill which a reasonable service
provider would exercise and in conformity with any statutory or other binding
legal rules which are applicable to the related service.

3.
In determining the reasonable care and skill
required of the service provider, regard is to be had, among other things, to:

(a)
the nature, the magnitude, the frequency and the
foreseeability of the risks involved in the performance of the related service
for the customer;

(b)
if damage has occurred, the costs of any
precautions which would have prevented that damage or similar damage from
occurring; and

(c)
the time available for the performance of the
related service.

4.
Where in a contract between a trader and a
consumer the related service includes installation of the goods, the
installation must be such that the installed goods conform to the contract as
required by Article 101.

5.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of
paragraph 2 or derogate from or vary its effects.

Article 149
Obligation to prevent damage

The service provider must take reasonable
precautions in order to prevent any damage to the goods or the digital content,
or physical injury or any other loss or damage in the course of or as a
consequence of the performance of the related service.

Article 150
Performance by a third party

1.
A service provider may entrust performance to
another person, unless personal performance by the service provider is
required.

2.
A service provider who entrusts performance to
another person remains responsible for performance.

3.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of
paragraph 2 or derogate from or vary its effects.

Article 151
Obligation to provide invoice

Where a separate price is payable for the
related service, and the price is not a lump sum agreed at the time of
conclusion of the contract, the service provider must provide the customer with
an invoice which explains, in a clear and intelligible way, how the price was
calculated.

Article 152
Obligation to warn of unexpected or uneconomic cost

1.
The service provider must warn the customer and
seek the consent of the customer to proceed if:

(a)
the cost of the related service would be greater
than already indicated by the service provider to the customer; or

(b)
the related service would cost more than the
value of the goods or the digital content after the related service has been
provided, so far as this is known to the service provider.

2.
A service provider who fails to obtain the
consent of the customer in accordance with paragraph 1 is not entitled to a
price exceeding the cost already indicated or, as the case may be, the value of
the goods or digital content after the related service has been provided.

Section
3        Obligations of the customer

Article 153
Payment of the price

1.
The customer must pay any price that is payable
for the related service in accordance with the contract.

2.
The price is payable when the related service is
completed and the object of the related service is made available to the
customer.

Article 154
Provision of access

Where it is necessary for the service
provider to obtain access to the customer’s premises in order to perform the related service the customer must provide such access at reasonable
hours.

Section
4        Remedies

Article 155
Remedies of the customer

1.
In the case of non-performance of an obligation
by the service provider, the customer has, with the adaptations set out in this
Article, the same remedies as are provided for the buyer in Chapter 11, namely:

(a)
to require specific performance;

(b)
to withhold the customer’s own performance;

(c)
to terminate the contract;

(d)
to reduce the price; and

(e)
to claim damages.

2.
Without prejudice to paragraph 3, the customer's
remedies are subject to a right of the service provider to cure whether or not
the customer is a consumer.

3.
In the case of incorrect installation under a
consumer sales contract as referred to in Article 101 the consumer's remedies
are not subject to a right of the service provider to cure.

4.
The customer, if a consumer, has the right to
terminate the contract for any lack of conformity in the related service
provided unless the lack of conformity is insignificant.

5.
Chapter 11 applies with the necessary
adaptations, in particular:

(a)
in relation to the right of the service provider
to cure, in contracts between a trader and a consumer, the reasonable period
under Article 109 (5) must not exceed 30 days;

(b)
in relation to the remedying of a non-conforming
performance Articles 111 and 112 do not apply; and

(c)
Article 156 applies instead of Article 122.

Article 156
Requirement of notification of lack of conformity in
related service contracts between traders

1.
In a related service contract between traders,
the customer may rely on a lack of conformity only if the customer gives notice
to the service provider within a reasonable time specifying the nature of the
lack of conformity.

The time starts to run when the related service
is completed or when the customer discovers or could be expected to discover
the lack of conformity, whichever is later.

2.
The service provider is not entitled to rely on
this Article if the lack of conformity relates to facts of which the service
provider knew or could be expected to have known and which the service provider
did not disclose to the customer.

Article 157
Remedies of the service provider

1.
In the case of a non-performance by the
customer, the service provider has, with the adaptations set out in paragraph
2, the same remedies as are provided for the seller in Chapter 13, namely:

(a)
to require performance;

(b)
to withhold the service provider’s own
performance;

(c)
to terminate the contract; and

(d)
to claim interest on the price or damages.

2.
Chapter 13 applies with the necessary
adaptations. In particular Article 158 applies instead of Article 132 (2).

Article 158
Customer’s right to decline performance

1.
The customer may at any time give notice to the
service provider that performance, or further performance of the related
service is no longer required.

2.
Where notice is given under paragraph 1:

(a)
the service provider no longer has the right or
obligation to provide the related service; and

(b)
the customer, if there is no ground for
termination under any other provision, remains liable to pay the price less the
expenses that the service provider has saved or could be expected to have saved
by not having to complete performance.

3.
In relations between a trader and a consumer the
parties may not, to the detriment of the consumer, exclude the application of
this Article or derogate from or vary its effects.

Part VI   Damages and interest

Chapter 16         Damages and interest

Section
1        Damages

Article 159
 Right to damages

1.
A creditor is entitled to damages for loss
caused by the non-performance of an obligation by the debtor, unless the
non-performance is excused.

2.
The loss for which damages are recoverable
includes future loss which the debtor could expect to occur.

Article 160
General measure of damages

The general measure of damages for loss
caused by non-performance of an obligation is such sum as will put the creditor
into the position in which the creditor would have been if the obligation had
been duly performed, or, where that is not possible, as nearly as possible into
that position. Such damages cover loss which the creditor has suffered and gain
of which the creditor has been deprived.

Article 161
Foreseeability of loss

The debtor is liable only for loss which
the debtor foresaw or could be expected to have foreseen at the time when the
contract was concluded as a result of the non-performance.

Article 162
Loss attributable to creditor

The debtor is not liable for loss suffered
by the creditor to the extent that the creditor contributed to the
non-performance or its effects.

Article 163
Reduction of loss

1.
The debtor is not liable for loss suffered by
the creditor to the extent that the creditor could have reduced the loss by
taking reasonable steps.

2.
The creditor is entitled to recover any expenses
reasonably incurred in attempting to reduce the loss.

Article 164
Substitute transaction

A creditor who has terminated a contract in
whole or in part and has made a substitute transaction within a reasonable time
and in a reasonable manner may, in so far as it is entitled to damages, recover
the difference between the value of what would have been payable under the
terminated contract and the value of what is payable under the substitute
transaction, as well as damages for any further loss.

Article 165
Current price

Where the creditor has terminated the
contract and has not made a substitute transaction but there is a current price
for the performance, the creditor may, in so far as entitled to damages,
recover the difference between the contract price and the price current at the
time of termination as well as damages for any further loss.

Section
2: Interest
on late payments: general provisions

Article 166
Interest on late payments

1.
Where payment of a sum of money is delayed, the
creditor is entitled, without the need to give notice, to interest on that sum
from the time when payment is due to the time of payment at the rate specified
in paragraph 2.

2.
The interest rate for delayed payment is:

(a)
where the creditor's habitual residence is in a
Member State whose currency is the euro or in a third country, the rate applied
by the European Central Bank to its most recent main refinancing operation
carried out before the first calendar day of the half-year in question, or the
marginal interest rate resulting from variable-rate tender procedures for the
most recent main refinancing operations of the European Central Bank, plus two
percentage points;

(b)
where the creditor's habitual residence is in a
Member State whose currency is not the euro, the equivalent rate set by the
national central bank of that Member State, plus two percentage points.

3.
The creditor may recover damages for any further
loss.

Article 167
Interest when the debtor is a consumer

1.
When the debtor is a consumer, interest for
delay in payment is due at the rate provided in Article 166 only when
non-performance is not excused.

2.
Interest does not start to run until 30 days
after the creditor has given notice to the debtor specifying the obligation to
pay interest and its rate. Notice may be given before the date when payment is
due.

3.
A term of the contract which fixes a rate of
interest higher than that provided in Article 166, or accrual earlier than the
time specified in paragraph 2 of this Article is not binding to the extent that
this would be unfair according to Article 83.

4.
Interest for delay in payment cannot be added to
capital in order to produce interest.

5.
The parties may not, to the detriment of the
consumer, exclude the application of this Article or derogate from or vary its
effects.

Section
3        Late payments by traders

Article 168
Rate of interest and accrual

1.
Where a trader delays the payment of a price due
under a contract for the delivery of goods, supply of digital content or
provision of related services without being excused by virtue of Article 88,
interest is due at the rate specified in paragraph 5 of this Article.

2.
Interest at the rate specified in paragraph 5
starts to run on the day which follows the date or the end of the period for
payment provided in the contract. If there is no such date or period, interest
at that rate starts to run:

(a)
30 days after the date when the debtor receives
the invoice or an equivalent request for payment; or

(b)
30 days after the date of receipt of the goods,
digital content or related services, if the date provided for in point (a) is
earlier or uncertain, or if it is uncertain whether the debtor has received an
invoice or equivalent request for payment.

3.
Where conformity of goods, digital content or
related services to the contract is to be ascertained by way of acceptance or
examination, the 30 day period provided for in point (b) of paragraph 2 begins
on the date of the acceptance or the date the examination procedure is
finalised. The maximum duration of the examination procedure cannot exceed 30
days from the date of delivery of the goods, supply of digital content or
provision of related services, unless the parties expressly agree otherwise and
that agreement is not unfair according to Article 170.

4.
The period for payment determined under
paragraph 2 cannot exceed 60 days, unless the parties expressly agree otherwise
and that agreement is not unfair according to Article 170.

5.
The interest rate for delayed payment is:

(a)
where the creditor's habitual residence is in a
Member State whose currecy is the euro or in a third country, the interest rate
applied by the European Central Bank to its most recent main refinancing operation
carried out before the first calendar day of the half-year in question, or the
marginal interest rate resulting from variable-rate tender procedures for the
most recent main refinancing operations of the European Central Bank, plus
eight percentage points;

(b)
where the creditor's habitual residence is in a
Member State whose currency is not the euro, the equivalent rate set by the
national central bank of that Member State, plus eight percentage points.

6.
The creditor may recover damages for any further
loss.

Article 169
Compensation for recovery costs

1.
Where interest is payable in accordance with
Article 168, the creditor is entitled to obtain from the debtor, as a minimum,
a fixed sum of EUR 40 or the equivalent sum in the currency agreed for the
contract price as compensation for the creditor's recovery costs.

2.
The creditor is entitled to obtain from the
debtor reasonable compensation for any recovery costs exceeding the fixed sum
referred to in paragraph 1 and incurred due to the debtor's late payment.

Article 170
Unfair contract terms relating to interest for late
payment

1.
A contract term relating to the date or the
period for payment, the rate of interest for late payment or the compensation
for recovery costs is not binding to the extent that the term is unfair. A term
is unfair if it grossly deviates from good commercial practice, contrary to
good faith and fair dealing, taking into account all circumstances of the case,
including the nature of the goods, digital content or related service.

2.
For the purpose of paragraph 1, a contract term
providing for a time or period for payment or a rate of interest less
favourable to the creditor than the time, period or rate specified in Articles
167 or 168, or a term providing for an amount of compensation for recovery
costs lower than the amount specified in Article 169 is presumed to be unfair.

3.
For the purpose of paragraph 1, a contract term
excluding interest for late payment or compensation for recovery costs is
always unfair.

Article 171
Mandatory nature

The parties may not exclude the application
of this Section or derogate from or vary its effects.

Part VII  Restitution

Chapter 17 Restitution

Article 172
Restitution on avoidance or termination

1.
Where a contract is avoided or terminated by either party,
each party is obliged to return what that party (“the recipient”) has received
from the other party.

2.
The obligation to return what was received
includes any natural and legal fruits derived from what was received.

3.
On the termination of a contract for performance
in instalments or parts, the return of what was received is not required in
relation to any instalment or part where the obligations on both sides have
been fully performed, or where the price for what has been done remains payable
under Article 8 (2), unless the nature of the contract is such that part
performance is of no value to one of the parties.

Article 173
Payment for monetary value

1.
Where what was received, including fruits where
relevant, cannot be returned, or, in a case of digital content whether or not
it was supplied on a tangible medium, the recipient must pay its monetary value.
Where the return is possible but would cause unreasonable effort or expense,
the recipient may choose to pay the monetary value, provided that this would
not harm the other party’s proprietary interests.

2.
The monetary value of goods is the value that
they would have had at the date when payment of the monetary value is to be
made if they had been kept by the recipient without destruction or damage until
that date.

3.
Where a related service contract is avoided or
terminated by the customer after the related service has been performed or
partly performed, the monetary value of what was received is the amount the
customer saved by receiving the related service.

4.
In a case of digital content the monetary value
of what was received is the amount the consumer saved by making use of the
digital content.

5.
Where the recipient has obtained a substitute in
money or in kind in exchange for goods or digital content when the recipient knew
or could be expected to have known of the ground for avoidance or termination,
the other party may choose to claim the substitute or the monetary value of the
substitute. A recipient who has obtained a substitute in money or kind in
exchange for goods or digital content when the recipient did not know and could
not be expected to have known of the ground for avoidance or termination may
choose to return the monetary value of the substitute or the substitute.

6.
In the case of digital content which is not
supplied in exchange for the payment of a price, no restitution will be made.

Article 174
Payment for use and interest on money received

1.
A recipient who has made use of goods must pay
the other party the monetary value of that use for any period where:

(a)
the recipient caused the ground for avoidance or
termination;

(b)
the recipient, prior to the start of that
period, was aware of the ground for          avoidance or termination; or

(c)
having regard to the nature of the goods, the
nature and amount of the use and the availability of remedies other than
termination, it would be inequitable to allow the recipient the free use of the
goods for that period.

2.
A recipient who is obliged to return money must
pay interest, at the rate stipulated in Article 166, where :

(a)
the other party is obliged to pay for use; or

(b)
the recipient gave cause for the contract to be
avoided because of fraud, threats and unfair exploitation.

3.
For the purposes of this Chapter, a recipient is
not obliged to pay for use of goods received or interest on money received in
any circumstances other than those set out in paragraphs 1 and 2.

Article 175
Compensation for expenditure

1.
Where a recipient has incurred expenditure on
goods or digital content, the recipient is entitled to compensation to the
extent that the expenditure benefited the other party provided that the
expenditure was made when the recipient did not know and could not be expected
to know of the ground for avoidance or termination.

2.
A recipient who knew or could be expected to
know of the ground for avoidance or termination is entitled to compensation
only for expenditure that was necessary to protect the goods or the digital
content from being lost or diminished in value, provided that the recipient had
no opportunity to ask the other party for advice.

Article 176
Equitable modification

Any obligation to return or to pay under
this Chapter may be modified to the extent that its performance would be
grossly inequitable, taking into account in particular whether the party did
not cause, or lacked knowledge of, the ground for avoidance or termination.

Article 177
Mandatory nature

In relations between a trader and a
consumer the parties may not, to the detriment of the consumer, exclude the
application of this Chapter or derogate from or vary its effects.

Part VIII        Prescription

Chapter 18         Prescription

Section
1 General provisions

Article 178
Rights subject to prescription

A right to enforce performance of an
obligation, and any right ancillary to such a right, is subject to prescription
by the expiry of a period of time in accordance with this Chapter.

Section
2 Periods of prescription and their commencement

Article 179
Periods of prescription

1.
The short period of prescription is two years.

2.
The long period of prescription is ten years or,
in the case of a right to damages for personal injuries, thirty years.

Article 180
Commencement

1.
The short period of prescription begins to run
from the time when the creditor has become, or could be expected to have
become, aware of the facts as a result of which the right can be exercised.

2.
The long period of prescription begins to run
from the time when the debtor has to perform or, in the case of a right to
damages, from the time of the act which gives rise to the right.

3.
Where the debtor is under a continuing obligation
to do or refrain from doing something, the creditor is regarded as having a
separate right in relation to each non-performance of the obligation.

Section
3 Extension of periods of prescription

Article 181
 Suspension in case of judicial and other proceedings

1.
The running of both periods of prescription is
suspended from the time when judicial proceedings to assert the right are
begun.

2.
Suspension lasts until a final decision has been
made, or until the case has been otherwise disposed of. Where the proceedings
end within the last six months of the prescription period without a decision on
the merits, the period of prescription does not expire before six months have
passed after the time when the proceedings ended.

3.
Paragraphs 1 and 2 apply, with appropriate adaptations,
to arbitration proceedings, to mediation proceedings, to proceedings whereby an
issue between two parties is referred to a third party for a binding decision
and to all other proceedings initiated with the aim of obtaining a decision
relating to the right or to avoid insolvency.

4.
Mediation means a structured process, however
named or referred to, whereby two or more parties to a dispute attempt by
themselves, on a voluntary basis, to reach an agreement on the settlement of
their dispute with the assistance of a mediator. This process may be initiated
by the parties or suggested or ordered by a court or prescribed by the national
law. Mediation ends by an agreement of the parties or by declaration of the
mediator or one of the parties.

Article 182
Postponement of expiry in the case of negotiations

If the parties negotiate about the right,
or about circumstances from which a claim relating to the right might arise,
neither period of prescription expires before one year has passed since the
last communication made in the negotiations or since one of the parties
communicated to the other that it does not wish to pursue the negotiations.

Article 183
Postponement of expiry in case of incapacity

If a person subject to an incapacity is
without a representative, neither period of prescription of a right held by
that person expires before one year has passed since either the incapacity has
ended or a representative has been appointed.

Section 4 Renewal
of periods of prescription

Article 184
Renewal by acknowledgement

If the debtor acknowledges the right
vis-à-vis the creditor, by part payment, payment of interest, giving of
security, set-off or in any other manner, a new short period of prescription
begins to run.

Section
5 Effects of prescription

Article 185
Effects of prescription

1.
After expiry of the relevant period of
prescription the debtor is entitled to refuse performance of the obligation in
question and the creditor loses all remedies for non-performance except
withholding performance.

2.
Whatever has been paid or transferred by the
debtor in performance of the obligation in question may not be reclaimed merely
because the period of prescription had expired at the moment that the
performance was carried out.

3.
The period of prescription for a right to
payment of interest, and other rights of an ancillary nature, expires not later
than the period for the principal right.

Section
6 Modification by agreement

Article 186
Agreements concerning prescription

1.
The rules of this Chapter may be modified by
agreement between the parties, in particular by either shortening or
lengthening the periods of prescription.

2.
The short period of prescription may not be
reduced to less than one year or extended to more than ten years.

3.
The long period of prescription may not be
reduced to less than one year or extended to more than thirty years.

4.
The parties may not exclude the application of
this Article or derogate from or vary its effects.

5.
In a contract between a trader and a consumer
this Article may not be applied to the detriment of the consumer.

Appendix 1

Model instructions on withdrawal

Right of
withdrawal

You have the
right to withdraw from this contract within 14 days without giving
any reason.

The withdrawal period expires after 14 days
from the day 1.

To exercise the right of withdrawal, you
must inform us (2) of your decision to withdraw from this contract by a clear
statement (e.g. a letter sent by post, fax or e-mail). You may use the attached
model withdrawal form, but it is not obligatory. 3

To meet the withdrawal deadline, it is
sufficient for you to send your communication concerning your exercise of the
right of withdrawal before the withdrawal period has expired.

Effects of
withdrawal

If you withdraw from this contract, we will
reimburse all payments received from you, including the costs of delivery (with
the exception of the supplementary costs resulting from your choice of a type
of delivery other than the least expensive type of standard delivery offered by
us), without undue delay and in any event not later than 14 days from the day
on which we are informed about your decision to withdraw from this contract. We
will carry out such reimbursement using the same means of payment as you used
for the initial transaction, unless you have expressly agreed otherwise; in any
event, you will not incur any fees as a result of such reimbursement. 4

5

6

Instructions for completion:

1            Insert one of the following texts
between inverted commas here:

a)      in the case of a related service
contract or a contract for the supply of water, gas or electricity, where they
are not put up for sale in a limited volume or set quantity, of district
heating or of digital content which is not supplied on a tangible medium:
"of the conclusion of the contract.";

b)      in the case of a sales contract:
"on which you acquire, or a third party other than the carrier and
indicated by you acquires, physical possession of the goods.";

c)      in the case of a contract relating to
multiple goods ordered by the consumer in one order and delivered separately:
"on which you acquire, or a third party other than the carrier and
indicated by you acquires, physical possession of the last good.";

d)      in the case of a contract relating to
delivery of a good consisting of multiple lots or pieces: "on which you
acquire, or a third party other than the carrier and indicated by you acquires,
physical possession of the last lot or piece.";

e)      in the case of a contract for regular
delivery of goods during a defined period of time: "on which you acquire,
or a third party other than the carrier and indicated by you acquires, physical
possession of the first good.".

2            Insert your name, geographical
address and, where available, your telephone number, fax number and e-mail
address.

3            If you give the option to the
consumer to electronically fill in and submit information about his or her
withdrawal from the contract on your website, insert the following: "You
can also electronically fill in and submit the model withdrawal form or any
other clear statement on our website [insert internet address]. If you use this
option, we will communicate to you an acknowledgement of receipt of such a
withdrawal on a durable medium (e.g. by e-mail) without delay."

4            In the case of sales contracts in
which you have not offered to collect the goods in the event of withdrawal
insert the following: "We may withhold reimbursement until we have
received the goods back or you have supplied evidence of having sent back the
goods, whichever is the earliest".

5            If the consumer has received
goods in connection with the contract, insert the following:

a        insert:

–
"We will collect the goods."; or

–
"You shall send back the goods or hand them
over to us or ____[insert the name and geographical address, where applicable,
of the person authorised by you to receive the goods], without undue delay and
in any event not later than 14 days from the day on which you communicate your
withdrawal from this contract to us. The deadline is met if you send back the
goods before the period of 14 days has expired."

b       insert either:

–
"We will bear the cost of returning the
goods."; or

–
"You will have to bear the direct cost of
returning the goods."; or

–
If, in a distance contract, you do not offer to
bear the cost of returning the goods and the goods, by their nature, cannot
normally be returned by post: "You will have to bear the direct cost of
returning the goods, ___ EUR [insert the amount]."; or if the cost of
returning the goods cannot reasonably be calculated in advance: "You will
have to bear the direct cost of returning the goods. The cost is estimated to a
maximum of approximately ___ EUR[insert the amount]"; or

–
If, in an off-premises contract, the goods, by
their nature, cannot normally be returned by post and have been delivered to
the consumer’s home at the time of the conclusion of the contract: "We
will collect the goods at our own expense."

c        "You are only liable for any
diminished value of the goods resulting from the handling other than what is
necessary to establish the nature, characteristics and functioning of the
goods."

6            In the case of a contract for the
provision of related services insert the following: "If you requested to
begin the performance of related services during the withdrawal period, you
shall pay us an amount which is in proportion to what has been provided until
you have communicated us your withdrawal from this contract, in comparison with
the full coverage of the contract.".

Appendix
2

Model
withdrawal form

(complete
and return this form only if you wish to withdraw from the contract)

–
To [here the trader’s name, geographical address
and, where available, his fax number and e-mail address are to be inserted by
the trader]:

–
I/We* hereby give notice that I/We* withdraw
from my/our* contract of sale of the following goods*/for the supply of the
following digital content/for the provision of the following related service*

–
Ordered on*/received on*

–
Name of consumer(s)

–
Address of consumer(s)

–
Signature of consumer(s) (only if this form is
notified on paper)

–
Date

*        Delete as appropriate.

ANNEX II
STANDARD INFORMATION NOTICE

The contract you are about to conclude will
be governed by the Common European Sales Law, which is an alternative system of
national contract law available to consumers in cross-border situations. These
common rules are identical throughout the European Union, and have been
designed to provide consumers with a high level of protection.

These rules
only apply if you mark your agreement that the contract is governed by the Common
European Sales Law.

You may
also have agreed to a contract on the telephone or in any other way (such as by
SMS) that did not allow you to get this notice beforehand. In this case the
contract will only become valid after you have received this notice and
confirmed your consent.

Your core rights are described below.

THE COMMON EUROPEAN SALES LAW:
SUMMARY OF KEY CONSUMER RIGHTS

Your rights before signing the
contract

The trader has to give you the important information
on the contract, for instance on the product and its price including all
taxes and charges and his contact details. The information has to be more
detailed when you buy something outside the trader's shop or if you do not meet
the trader personally at all, for instance if you buy online or by telephone. You
are entitled to damages if this information is incomplete or wrong.

Your rights after signing the
contract

In most cases you have 14 days to withdraw
from the purchase if you bought the goods outside the trader's shop or if
you have not met the trader up to the time of the purchase (for instance if you
bought online or by telephone). The trader must provide you with information
and a Model withdrawal form[23].
If the trader has not done so, you can cancel the contract within one year.

What can you do when products are faulty
or not delivered as agreed? You are entitled to
choose between: 1) having the product delivered 2) replaced or 3) repaired. 4)
Ask for a price reduction. 5) You can cancel the contract, return the product
and get a refund, except if the defect is very small. 6) You can claim damages
for your loss. You do not have to pay the price until you get the product
without defects.

If the trader has not performed a related service
as promised in the contract, you have similar rights. However, after you have
complained to the trader, he normally has the right to first try to do the job
correctly. Only if the trader fails again you have a choice between 1) asking
the trader again to provide the related service, 2) not paying the price until
you get the related service supplied correctly, 3) requesting a price reduction
or 4) claiming damages. 5) You can also cancel the contract and get a refund,
except if the failure in providing the related service is very small. Period
to claim your rights when products are faulty or not delivered as agreed: You
have 2 years to claim your rights after you realise or should have realised
that the trader has not done something as agreed in the contract. Where such
problems become apparent very late, the last possible moment for you to make
such a claim is 10 years from the moment the trader had to deliver the goods,
supply the digital content or provide the related service.

Unfair terms protection: Trader's standard contract terms which are unfair are not legally
binding for you.

This list of rights is only a summary
and therefore not exhaustive, nor does it contain all details. You can consult
the full text of the Common European Sales Law here. Please read your
contract carefully.

In case of dispute you may wish to ask
for legal advice.

[1]               Eurobarometers 320 on European
contract law in business-to-business transactions of 2011, p. 15 and
Eurobarometer 321 on European contract law in consumer
transactions of 2011, p. 19.

[2]               OJ L 177, 4.7.2008, p. 6.

[3]               Eurobarometer 320 on European contract law in
business-to-business transactions of 2011, p. 15 and Eurobarometer 321 on
European contract law in consumer transactions of 2011, p. 19.

[4]               A. Turrini and T. Van Ypersele, Traders, courts
and the border effect puzzle, Regional Science and Urban Economics, 40,
2010, p. 82: "Analysing international trade across OECD countries we show
that controlling for countries specific factors, distance, the presence of
common border and common language [...], similar legal systems have a significant
impact on trade [...]. If two countries share common origins for their legal
system, on average they exhibit trade flows 40% larger."

[5]               COM (2001) 398, 11.7.2001.

[6]               COM (2010) 348 final, 1.7.2010.

[7]               The Single Market Act, COM (2011) 206 final,
13.4.2011, p. 19, and the Annual Growth Survey, Annex 1, progress report on
Europe 2020, COM (2011) 11 - A1/2, 12.1.2010, p. 5, also mention the initiative
on European contract law.

[8]               COM (2010) 245 final, 26.8.2010, p. 13.

[9]               Exceptions are the UK, Ireland, Portugal and Malta.

[10]             Directive 2000/31/EC of the European Parliament and of
the Council of 8 June 2000 on certain legal aspects of information society
services, in particular electronic commerce, in the Internal Market, OJ L 178,
17.7.2000, p. 1-16.

[11]             OJ L 177, 4.7.2008, p. 6.

[12]             OJ L 199, 31.7.2007, p. 40.

[13]             OJ L 124, 20.5.2003, p. 36.

[14]             OJ L 105, 27.4.2010, p. 109.

[15]             Commission Communication on Building Trust in EU-wide
Justice: a New Dimension to European Judicial Training, COM (2011) 551 final,
13.9.2011.

[16]             OJ L 376, 27.12.2006, p. 36.

[17]             OJ C , , p. .

[18]             OJ C , , p. .

[19]             OJ L 177, 4.7.2008, p. 6.

[20]             OJ L 199, 31.7.2007, p. 40.

[21]             OJ L 124, 20.5.2003, p. 36.

[22]             OJ L 376, 27.12.2006, p. 36.

[23]             Insert a link here.