P7_TA(2014)0159

Common European Sales Law ***I

European Parliament legislative resolution of 26 February 2014 on the proposal for a regulation of the European Parliament and of the Council on a Common European Sales Law (COM(2011)0635 — C7-0329/2011 — 2011/0284(COD))

(Ordinary legislative procedure: first reading)

(2017/C 285/64)

The European Parliament,

having regard to the Commission proposal to Parliament and the Council (COM(2011)0635),

having regard to Article 294(2) and Article 114 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0329/2011),

having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

having regard to the reasoned opinions submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Belgian Senate, the German Bundestag, the Austrian Federal Council and the United Kingdom House of Lords, asserting that the draft legislative act does not comply with the principle of subsidiarity,

having regard to the opinion of the European Economic and Social Committee of 29 March 2012 (1) ,

having regard to the report of the Committee on Legal Affairs and the opinions of the Committee on the Internal Market and Consumer Protection and the Committee on Economic and Monetary Affairs (A7-0301/2013),

Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

Instructs its President to forward its position to the Council, the Commission and the national parliaments.

(1) OJ C 181, 21.6.2012, p. 75.

P7_TC1-COD(2011)0284

Position of the European Parliament adopted at first reading on 26 February 2014 with a view to the adoption of Regulation (EU) No …/2014 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 (1),

Acting in accordance with the ordinary legislative procedure (2),

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 (EC) No 593/2008 of the European Parliament and of the Council (3) 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) Contract-law-related barriers prevent consumers and traders from fully exploiting the potential of the internal market and are particularly relevant in the area of distance selling, which should be one of the tangible results of the internal market. In particular, the digital dimension of the internal market is becoming vital for both consumers and traders as consumers increasingly make purchases over the internet and an increasing number of traders sell online. Given that communication and information technology means are constantly developing and becoming increasingly accessible, the growth potential of internet sales is very high. Against this background, and to To overcome these such contract-law-related barriers, parties should have the possibility to agree that their contracts they conclude at a distance, and, in particular, online, should be governed by a single uniform set of contract law rules with the same meaning and interpretation in all Member States, a Common European Sales Law. The That Common European Sales Law should represent an additional option for distance selling and, in particular, internet trade, 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. [Am. 1]

(9) This Regulation establishes a Common European Sales Law for distance contracts and in particular for online contracts . It harmonises approximates the contract laws of the Member States not by requiring amendments to the pre-existing first national contract- law regime , but by creating within each Member State's national law a second contract- law regime for contracts within its scope. This directly applicable second regime should be an integral part of the legal order applicable in the territory of the Member States. In so far as its scope allows and where parties have validly agreed to use it, the Common European Sales Law should apply instead of the first national contract-law regime within that legal order. It 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. [Am. 2]

(10) The agreement to use the Common European Sales Law should be a choice exercised within the scope of the respective national law legal order which is applicable determined as the applicable law 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 (4), or any other relevant conflict of law rule. The agreement to use the Common European Sales Law should results from a choice between two different regimes within the same national legal order. That choice, therefore , does not amount to, and is not to be confused with, a choice of the applicable law between two national legal orders 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 such as those contained in Regulation (EC) No 593/2008 . [Am. 3]

(11) The Common European Sales Law should comprise of a complete comprehensive set of fully harmonised uniform 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. Furthermore, the adoption of this Regulation should not preclude revision of the Directive on consumer rights, with the aim of providing full high-level harmonisation of consumer protection in the Member States. [Am. 4]

(11a) The definition of consumer should cover natural persons who are acting outside their trade, business, craft or profession. However, in the case of dual-purpose contracts, where the contract is concluded for purposes partly within and partly outside a person's trade and the trade purpose is so limited as not to be predominant in the overall context of the contract, that person should also be considered as a consumer. In order to determine whether a natural person is acting fully or partly for purposes which come within that person's trade, business, craft or profession, the way in which the person in question behaves towards the contracting party should be taken into account. [Am. 5]

(12) 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. Since the Common European Sales Law contains a complete comprehensive set of fully uniform 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) of 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 relevance to the issues covered by the Common European Sales Law , as it would amount to a comparison between the mandatory provisions of two identical second contract-law regimes . [Am. 6]

(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 , and that distance trade, in particular trade online, has a high potential . 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. [Am. 7]

(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.

(17a) Cloud computing is developing rapidly and has great potential for growth. The Common European Sales Law provides a coherent set of rules adapted to the distance supply, and in particular the supply online, of digital content and related services. It should be possible for those rules to also apply when digital content or related services are provided using a cloud, in particular when digital content can be downloaded from the seller's cloud or temporarily stored in the provider's cloud. [Am. 8]

(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. However, in such cases, the remedies of the buyer should be limited to damages. On the other hand, the buyer should be able to have recourse to the full range of remedies, except price reduction, even if he is not obliged to pay a price for the supply of digital content, provided that his counter-performance, such as the provision of personal data or other utility having commercial value for the supplier, equals the payment of the price, given that in such cases the digital content is not actually supplied free of charge. [Am. 9]

(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 or temporary storage of digital content in the provider's cloud . [Am. 10]

(19a) The Common European Sales Law may also be used for a contract that is linked to another contract between the same parties that is not a sales contract, a contract for the supply of digital content or a related services contract. The linked contract is governed by the respective national law which is applicable pursuant to the relevant conflict-of-law rule. The Common European Sales Law may also be used for a contract that includes any element other than the sale of goods, the supply of digital content or the provision of related services, provided those elements are divisible and their price can be apportioned. [Am. 11]

(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/EC (5). 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 to the use of the Common European Sales Law 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. [Am. 12]

(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.

(23a) Where the agreement of the parties to the use of the Common European Sales Law is invalid or where the requirements to provide the standard information notice are not fulfilled, questions as to whether a contract is concluded and on what terms should be determined by the respective national law which is applicable pursuant to the relevant conflict-of-law rules. [Am. 13]

(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 unless the reasons for such illegality or immorality are addressed in the Common European Sales Law , 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, and 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. In the interest of clarity and legal certainty, the Common European Sales Law should clearly refer to those issues which are, and those which are not, addressed therein. [Am. 14]

(27a) The unfair commercial practices referred to in Directive 2005/29/EC of the European Parliament and of the Council (6) would be covered by the Common European Sales Law in so far as they overlap with rules on contract law, including in particular those relating to unfair commercial practices that can lead to avoidance of a contract due to mistake, fraud, threat or unfair exploitation or to remedies for breach of the duty to provide information. Unfair commercial practices other than those that overlap with rules on contract law should fall outside the scope of the Common European Sales Law. [Am. 15]

(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 (7).

(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. [Am. 16]

(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 general 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 general 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. The general principle of good faith and fair dealing should set a standard of conduct which ensures an honest, transparent and fair relationship. While it precludes a party from exercising or relying on a right, remedy or defence which that party would otherwise have, the principle as such should not give rise to any general right to damages. Rules of the Common European Sales Law constituting specific manifestations of the general principle of good faith and fair dealing, such as avoidance for fraud or the non-performance of an obligation created by an implied term, can give rise to a right to damages, but only in very specific cases. [Am. 17]

(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. A database should be established which is easily accessible, fully systematised and easily searchable. In order to overcome problems relating to different approaches to judgments within the Union and to enable the database to be operated efficiently and economically, judgments should be communicated on the basis of a standard judgment summary which should accompany the judgment. It should be succinct, thus rendering it easily accessible. It should be divided into five sections which should set out the main elements of the judgment communicated, namely: the issue and the relevant Common European Sales Law article; a brief summary of the facts; a short summary of the main arguments; the decision; and the reasons for the decision, clearly stating the principle decided. [Am. 18]

(34a) A commentary on the Common European Sales Law could be a valuable tool, as it would provide clarity and guidance on that law. Such a commentary should provide a clear and comprehensive exegesis of the articles of the Common European Sales Law together, where appropriate, with an explanation of the policy choices which underpin specific articles. A clear explanation of such choices would enable courts across the Member States to interpret and apply properly the Common European Sales Law, as well as enabling them to fill any gaps. As such, it will facilitate the development of a consistent, uniform application of the Common European Sales Law. The Commission should explore the possibilities of providing for such a commentary. [Am. 19]

(34b) An additional obstacle to cross-border trade is the lack of access to efficient and inexpensive redress mechanisms. Therefore, a consumer and a trader concluding a contract on the basis of the Common European Sales Law should consider submitting disputes arising from that contract to an existing alternative dispute resolution entity within the meaning of point (h) of Article 4(1) of Directive 2013/11/EU of the European Parliament and of the Council (8) . This should be entirely without prejudice to the possibility for the parties to initiate proceedings before the competent courts without first having recourse to alternative dispute resolution. [Am. 20]

(34c) To help facilitate the use of the Common European Sales Law, the Commission should work towards the development of European model contract terms with the assistance of a working group, composed mainly of groups representing consumers and businesses and supported by academics and practitioners. Such model contract terms could usefully complement the Common Sales Law rules when describing the specific features of a given contract, and should take into account the particularities of relevant commercial sectors. They should respond to stakeholders' needs and draw lessons from the initial practical experience of the use of the Common European Sales Law. The model contract terms should be made available to the public as they would provide added value to traders who choose to conclude cross-border contracts using the Common European Sales Law. In order for those model contract terms to effectively accompany the Common European Sales Law, the Commission's work should start as soon as possible. [Am. 21]

(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 include further the scope in relation to business-to-business contracts rules relating to retention of title clauses , market and technological developments in respect of digital content and future developments of the Union acquis. Particular consideration should be given, in addition, to the question whether the limitation to distance contracts, and in particular online contracts, remains appropriate or whether a wider scope, including on-premises contracts, may be feasible. [Am. 22]

(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:

Table of contents (*1)

[Am. 23]

Title I

General provisions [Am. 24]

Part -I: Application of the instrument [Am. 25]

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 , within the legal order of each Member State, a uniform set of contract law rules as set out in Title II (‘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 which are conducted at a distance, in particular online, where the parties to a contract agree to do so. [Am. 26]

2. This Regulation enables traders , in particular small or medium-sized enterprises (‘SMEs’), 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. [Am. 27]

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; [Am. 28]

(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; [Am. 29]

(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; [Am. 30]

(e) ‘trader’ means any natural or person or any legal person , irrespective of whether privately or publicly owned, who is acting for purposes relating to that person’s trade, business, craft, or profession in relation to contracts ; [Am. 31]

(f) ‘consumer’ means any natural person who is acting for purposes which are outside that person's trade, business, craft, or profession; where the contract is concluded for purposes partly within and partly outside that person's trade and the trade purpose is so limited as not to be predominant in the overall context of the contract, that person shall also be considered to be a consumer; [Am. 32]

(fa) ‘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; [Am. 33]

(fb) ‘customer’ means any person who purchases a related service; [Am. 34]

(fc) ‘creditor’ means a person who has a right to performance of an obligation, whether monetary or non-monetary, by another person, the debtor; [Am. 35]

(fd) ‘debtor’ means a person who has an obligation, whether monetary or non-monetary, to another person, the creditor; [Am. 36]

(fe) ‘good faith and fair dealing’ means a standard of conduct characterised by honesty, openness and, in so far as may be appropriate, reasonable consideration for the interests of the other party to the transaction or relationship in question; [Am. 37]

(ff) ‘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; [Am. 38]

(fg) ‘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 quality of life and loss of enjoyment; [Am. 39]

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

(ga) ‘mandatory rule’ means any provision the application of which the parties cannot exclude, or derogate from, or the effect of which they cannot vary; [Am. 40]

(gb) ‘obligation’ means a duty to perform which one party to a legal relationship owes to another party and which that other party is entitled to enforce as such; [Am. 41]

(gc) ‘express’ means, in relation to a statement or agreement, that it is made separately from other statements or agreements and by way of active and unequivocal conduct, including by ticking a box or activating a button or similar function; [Am. 42]

(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 storage or any other processing, including installation, maintenance, or 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 or provided for, even if only as an option, in the sales contract or in the contract for the supply of digital content ; it excludes: [Am. 44] (i) transport services, (ii) training services, [Am. 45] (iii) telecommunications support services; and (iv) financial services , including payment services and the issue of electronic money and insurance of any kind, whether for goods and digital content or otherwise ; [Am. 46]

(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; [Am. 47]

(o) ‘customer’ means any person who purchases a related service; [Am. 48]

(p) ‘distance contract’ means any contract between the trader and the consumer or another trader 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 or the other trader , with the exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded; [Am. 49]

(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; [Am. 50]

(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; [Am. 51]

(s) ‘commercial guarantee’ means any undertaking by the trader or a producer (the guarantor) to the consumer, in addition to his legal obligations under Article 106 in case of lack obligation relating to the guarantee of conformity to reimburse the price paid or to replace or repair, or service goods or digital content contents 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; [Am. 52]

(sa) ‘repair’ means, in the event of lack of conformity, the act of processing non-conforming goods or digital content to bring them into conformity with the contract; [Am. 53]

(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; [Am. 54]

(w) ‘creditor’ means a person who has a right to performance of an obligation, whether monetary or non-monetary, by another person, the debtor; [Am. 55]

(x) ‘debtor’ means a person who has an obligation, whether monetary or non-monetary, to another person, the creditor; [Am. 56]

(y) ‘obligation’ means a duty to perform which one party to a legal relationship owes to another party. [Am. 57]

(ya) ‘free of charge’ means free of the costs necessarily incurred in order to bring the goods into conformity, particularly the cost of postage, labour and materials. [Am. 58]

Article 3

Optional nature of the Common European Sales Law

The parties may agree , subject to the requirements laid down in Articles 8 and 9, 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. [Am. 59]

Article 4

Cross-border contracts

1. The Common European Sales Law may be used for distance contracts which are cross-border contracts. [Am. 60]

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 distance contracts, including online contracts, which are : [Am. 61]

(a) sales contracts;

(b) contracts for the supply of digital content whether or not supplied on a tangible medium or through any other means, 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 or in exchange for a counter-performance other than the payment of a price, or is not supplied in exchange for any other counter-performance ; [Am. 62]

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

Article 6

Exclusion of mixed-purpose Linked contracts and contracts linked to a consumer credit mixed-purpose contracts [Am. 63]

1. The Common European Sales Law may not also be used for mixed-purpose contracts including

a) cases where a contract governed by the Common European Sales Law is linked to a contract other than a sales contract, a contract for the supply of digital content or a related service contract, or

(b) cases where a contract includes any elements other than the sale of goods, the supply of digital content and or the provision of related services within the meaning of Article 5 , provided those elements are divisible and their price can be apportioned . [Am. 64]

1a. In the cases referred to in point (a) of paragraph 1, the linked contract shall be governed by the otherwise applicable law. [Am. 65]

1b. In the cases referred to in point (a) of paragraph 1, and

(a) where, in the context of the contract governed by the Common European Sales Law, either of the parties exercises any right, remedy or defence, or that contract is invalid or not binding, the national law applicable to the linked contract shall determine the effects on the linked contract; [Am. 66]

(b) where, in the context of the linked contract, either of the parties exercises any right, remedy or defence, or that contract is invalid or not binding under the national law applicable to that contract, the obligations of the parties under the contract governed by the Common European Sales Law shall be unaffected unless a party would not have concluded that contract governed by the Common European Sales Law but for the linked contract, or would have done so only on fundamentally different contract terms, in which case that party shall be entitled to terminate the contract governed by the Common European Sales Law. [Am. 67]

1c. In the cases referred to in point (b) in paragraph 1, the other elements included in the contract shall be deemed to have been agreed upon under a linked contract. [Am. 68]

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. [Am. 69]

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. [Am. 70]

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 and if the requirements under Article 9 are fulfilled . The trader shall provide the consumer with a confirmation of that agreement on a durable medium. [Am. 71]

3. In relations between a trader and a consumer the Common European Sales Law may not be chosen partially, but only in its entirety. In relations between traders, the Common European Sales Law may be chosen partially, provided that exclusion of the respective provisions is not prohibited therein. [Am. 72]

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 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 … (*2) and shall notify any subsequent changes as soon as possible.

Article 11

Consequences of the use of the Common European Sales Law

1. 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 , instead of the contract -law regime that would, in the absence of such an agreement, 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 contract within the legal order determined as the applicable law . [Am. 73]

1a. Where the parties enter into negotiations, or otherwise take preparatory steps for the conclusion of a contract, with reference to the Common European Sales Law, the Common European Sales Law shall also govern compliance with and remedies for failure to comply with the pre-contractual duty to provide information, and other matters that are relevant prior to the conclusion of a contract.

The application of the Common European Sales Law as referred to in the first subparagraph shall be without prejudice to the law applicable under the relevant conflict-of-laws rules, where the trader has also made reference to other legal regimes. [Am. 74]

Article 11a

Matters covered by the Common European Sales Law

1. The Common European Sales Law addresses in its rules the following matters:

(a) pre-contractual duties to provide information;

(b) the conclusion of a contract including formal requirements;

(c) the right of withdrawal and its consequences;

(d) avoidance of the contract as a result of mistake, fraud, threat or unfair exploitation and the consequences of such avoidance;

(e) interpretation;

(f) contents and effects, including those of the relevant contract;

(g) the assessment and the effects of unfairness of contract terms;

(h) the rights and obligations of the parties;

(i) remedies for non-performance;

(j) restitution after avoidance or termination or in the case of a non-binding contract;

(k) prescription and preclusion of rights;

(l) sanctions available in the event of breach of the obligations and duties arising under its application. [Am. 75]

2. Matters not addressed in the Common European Sales law are governed by the relevant rules of the national law applicable under Regulations (EC) No 593/2008 and (EC) No 864/2007 or any other relevant conflict-of-law rule. Such matters include:

(a) legal personality;

(b) the invalidity of a contract arising from lack of capacity, illegality or immorality, except where the grounds giving rise to illegality or immorality are addressed in the Common European Sales Law;

(c) determination of the language of the contract;

(d) matters of non-discrimination;

(e) representation;

(f) plurality of debtors and creditors and change of parties, including assignment;

(g) set-off and merger;

(h) the creation, acquisition or transfer of immovable property or of rights in immovable property;

(i) intellectual property law; and

(j) the law of torts, including the issue of whether concurrent contractual and non-contractual liability claims can be pursued together. [Am. 76]

3. This Article is without prejudice to any mandatory rules of a non-Member State which may be applicable according to the relevant rules governing the conflict of laws. [Am. 77]

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 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. [Am. 78]

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. [Am. 79]

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. [Am. 80]

ANNEX I

COMMON EUROPEAN SALES LAW

TABLE OF CONTENTS

Part I: Introductory provisions 36

Chapter 1: General principles and application 36

Section 1: General principles 36

Section 2: Application 36

Part II: Making a binding contract 42

Chapter 2: Pre-contractual information 42

Section 1: Pre-contractual information to be given by a trader dealing with a consumer 42

Section 2: Pre-contractual information to be given by a trader dealing with another trader 48

Section 3: Contracts to be concluded by electronic means 48

Section 4: Duty to ensure that information supplied is correct 50

Section 5: Remedies for breach of information duties 50

Chapter 3: Conclusion of contract 52

Chapter 4: Right to withdraw in distance and off-premises contracts between traders and consumers 56

Chapter 5: Defects in consent 62

Part III: Assessing what is in the contract 65

Chapter 6: Interpretation 65

Chapter 7: Contents and effects 67

Chapter 8: Unfair contract terms 72

Section 1: General provisions 72

Section 2: Unfair contract terms in contracts between a trader and a consumer 72

Section 3: Unfair contract terms in contracts between traders 76

Part IV: Obligations and remedies of the parties to a sales contract or a contract for the supply of digital content 78

Chapter 9: General provisions 78

Chapter 10: The seller's obligations 81

Section 1: General provisions 81

Section 2: Delivery 81

Section 3: Conformity of the goods and digital content 84

Chapter 11: The buyer’s remedies 87

Section 1: General provisions 87

Section 2: Cure by the seller 88

Section 3: Requiring performance 89

Section 4: Withholding performance of buyer’s obligations 90

Section 5: Termination 90

Section 6: Price reduction 92

Section 7: Requirements of examination and notification in a contract between traders 92

Chapter 12: The buyer's obligations 94

Section 1: General provisions 94

Section 2: Payment of the price 4 94

Section 3: Taking delivery 96

Chapter 13: The seller’s remedies 98

Section 1: General provisions 98

Section 2: Requiring performance 98

Section 3: Withholding performance of seller’s obligations 99

Section 4: Termination 99

Chapter 14: Passing of risk 101

Section 1: General provisions 101

Section 2:Passing of risk in consumer sales contracts 101

Section 3:Passing of risk in contracts between traders 102

Part V: Obligations and remedies of the parties to a related service contract 104

Chapter 15: Obligations and remedies of the parties 104

Section 1: Application of certain general rules on sales contracts

Section 2: Obligations of the service provider 104

Section 3: Obligations of the customer 106

Section 4: Remedies 106

Part VI: Damages and interest 109

Chapter 16: Damages and interest 109

Section 1: Damages 109

Section 2: Interest on late payments: general provisions 110

Section 3: Late payments by traders 111

Part VII: Restitution 114

Chapter 17: Restitution 114

Part VIII: Prescription 117

Chapter 18: Prescription 117

Section 1: General provision 117

Section 2: Periods of prescription and their commencement 117

Section 3: Extension of periods of prescription 118

Section 4: Renewal of periods of prescription 119

Section 5: Effects of prescription 119

Section 6: Modification by agreement 119

Appendix 1 119

Appendix 2 121

[Am. 81]

Title II

Provisions of the Common European Sales Law [Am. 82]

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 but shall not give rise directly to remedies for non-performance of an obligation . [Am. 83]

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 Contracts including the provision of related services [Am. 84]

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. [Am. 85]

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. [Am. 86]

1a. 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 shall not be considered as falling within the period in question. [Am. 87]

2. Subject to paragraphs 4, 5 and 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. [Am. 88]

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. [Am. 89]

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.

7a. 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 that period is to begin, then, in the absence of indications to the contrary, the period shall be calculated from the moment the document reaches the addressee. [Am. 90]

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. [Am. 91]

4. The rules on defects in consent in Chapter 5 apply with appropriate adaptations to unilateral statements indicating intention. [Am. 92]

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 [Am. 93]

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. [Am. 94]

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 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. [Am. 95]

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. [Am. 96]

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; [Am. 97]

(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. [Am. 98]

(ca) in accordance with the laws of Member States, established by a public office-holder who has a statutory obligation to be independent and impartial and who must ensure, by providing comprehensive legal information, that the consumer only concludes the contract on the basis of careful legal consideration and with knowledge of its legal scope. [Am. 99]

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 [Am. 100]

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. [Am. 101]

Article 19

Distance contracts: additional Additional information and other requirements [Am. 102]

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. [Am. 103]

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 on the basis of which the trader is prepared to conclude the contract . [Am. 104]

4. Without prejudice to any stricter requirements for a trader dealing with a consumer under Section 1, The 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. [Am. 105]

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. Such acknowledgement shall display the content of the offer or of the acceptance. [Am. 106]

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 under Chapter 16 for any loss caused to the other party by such failure. [Am. 107]

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. [Am. 108]

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. In relations between a trader and a consumer, an offer shall only be considered to have sufficient content and certainty if it contains an object, a quantity or duration, and a price. [Am. 109]

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. In particular, in cases of unsolicited delivery of goods, supply of digital content or provision of related services, the absence of a response from the consumer shall not constitute accep