EN Official Journal of the European Union C 181/75

Opinion of the European Economic and Social Committee on the ‘Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law’

COM(2011) 635 final — 2011/0284 (COD)

and the ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Common European Sales Law to facilitate cross-border transactions in the single market’

COM(2011) 636 final

2012/C 181/14

Rapporteur: Ms BONTEA

On 11 October 2011, the European Commission decided to consult the European Economic and Social Committee, under Article 304 of the Treaty on the Functioning of the European Union, on the

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: A Common European Sales Law to facilitate cross-border transactions in the single market

COM(2011) 636 final.

On 16 November 2011 and 25 October 2011 respectively, the Council and the European Parliament decided to consult the European Economic and Social Committee, under Article 114 of the Treaty on the Functioning of the European Union, on the

Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law

COM(2011) 635 final — 2011/0284 (COD).

The Section for the Single Market, Production and Consumption, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 8 March 2012.

At its 479th plenary session, held on 28 and 29 March 2012 (meeting of 29 March), the European Economic and Social Committee adopted the following opinion by 87 votes to 54 with seven abstentions.

1. Conclusions and recommendations

1.1 The Committee welcomes the Commission's intentions to facilitate the expansion of cross-border trade for businesses (especially SMEs), encourage cross-border purchases by consumers and consolidate the advantages of the internal market.

1.2 With regard to the form of the Common European Sales Law (regulation) and the option chosen (an optional ‘second regime’), the Committee is pleased that its previous proposals have been taken on board. However, as expressed in its previous opinion, considers that ‘these objectives should be achieved incrementally, starting with cross-border commercial sales contracts for goods (B2B) on a pilot basis, as a useful means of putting the coexistence of the regimes to the test and monitoring how they are applied in practice’ (1).

1.3 The Committee stresses that the Common European Sales Law must comply fully with the principles of subsidiarity and proportionality.

1.4 With regard to the content, the Committee considers that the proposal for a regulation needs a number of important improvements in order to:

— facilitate transactions throughout the EU, make a powerful contribution to supporting economic activity in the single market and to further tap its potential;

— deliver genuine European added value, in terms of costs and advantages for economic operators and consumers;

— offer substantial advantages as regards better lawmaking and a simplified, understandable and user-friendly regulatory environment;

— cut the costs involved in cross-border transactions;

— ensure legal certainty and increased consistency between horizontal and vertical rules;

— guarantee that SMEs and consumers will benefit in practical terms from the new rules.

1.5 Dividing up the Common European Sales Law, with the rules on contracts between businesses (B2B) and the rules on contracts with consumers set out in two separate documents, and setting clear timeframes for each, will make it easier for businesses and consumers to find out about and apply the new rules.

1.6 The Committee attaches great importance to the optional nature of the new rules and to guaranteeing freedom to negotiate as regards acceptance of the Common European Sales Law.

1.7 The Committee highlights the following key issues:

— there are major difficulties in the implementation of the Common European Sales Law;

— greater allowance must be made for the specific characteristics of SMEs;

— European model contracts, designed for specific areas of trade or sectors of activity, containing standard terms and conditions and available in all the official languages of the EU, must be drawn up in consultation with employer, SME and consumer organisations. They would be very useful tools in business-to-business and business-to-consumer relationships and should be made available simultaneously with the publication of the Regulation;

— stronger legal certainty must be guaranteed and the content of the Common European Sales Law improved;

— in accordance with Articles 12 and 169 of the Treaty, consumer and SME protection requirements must be taken into consideration when designing and applying all EU policies and adopted measures.

1.8 The Committee points out that simply adopting the Common European Sales Law is not enough in itself to ensure the expansion of cross-border trade for businesses and cross-border purchases for consumers, and calls on the Commission and the Member States to continue their efforts to tap the single market's full potential for economic growth and job creation.

1.9 The Committee draws attention to the importance of the accompanying measures to ensure that the parties that might apply the Common European Sales Law, if finally adopted, find out about how to apply the law effectively and interpret it uniformly.

1.10 The consumer organisations highlight that the proposal as it stands should not be used in consumer transactions.

The SME and employers organisations highlight that, provided that a number of modifications and accompanying measures are undertaken, the proposal can be used in consumer transactions.

The proposals put forward by SME and consumer organisations still diverge on many points. Finding the best solution, which will be universally acceptable, is a complex and difficult process.

1.11 The Committee calls on the Commission, the Council and the Parliament to take these aspects into consideration when shaping the Common European Sales Law or any other initiative intended to regulate consumer rights in the EU, and to continue the dialogue with SME and consumer organisations, so that the Common European Sales Law caters more effectively for the needs of beneficiaries in order to make a powerful contribution to facilitating transactions in the EU.

2. Background

2.1 The current legal framework

2.1.1 The current legal framework in the EU is characterised by differences in the national legal systems and contract laws of the 27 Member States.

2.1.2 EU legislation contains a number of common rules especially in the area of business-to-consumer contracts, which harmonise substantive consumer contract law. The recently adopted Directive 2011/83/EU on consumer rights (2) has fully harmonised key elements of distance contracts such as pre-contractual information, formal requirements, right of withdrawal, passing of risk and delivery, leaving under minimum harmonisation only legal guarantees and unfair contract terms.

2.1.3 Articles 12, 38, 164, 168 and 169(4) of the Treaty guarantee the primacy of national rules, where these are more advantageous for consumers.

2.2 Difficulties for traders and consumers

2.2.1 Currently, only one in ten EU traders exports within the single market and the majority of those who do only export to a small number of Member States. Only 8 % of consumers have purchased goods and services on the internet from another Member State. The potential of the internal market and cross-border electronic trade is still under-exploited.

2.2.2 Barriers are created inter alia by differences in tax regulations, administrative requirements, difficulties in delivery, different language and culture, low level of broadband penetration, data protection requirements, design, territorial limitations of intellectual property, payment facilities and differences in the legal framework. The Commission's data drawn from other research reveals that in business-to-consumer transactions one of the main obstacles preventing consumers from buying abroad is the lack of effective means of redress. 62 % of consumers did not buy online across a border because they were afraid of fraud, 59 % did not know what to do if problems arose, 49 % were worried about delivery and 44 % were uncertain about their consumer rights (3).

Traders, particularly SMEs, are being faced with such problems as:

— finding out about the provisions of foreign contract law;

— increased legal complexity in cross-border trade, compared to domestic trade;

— high additional transaction costs.

2.2.3 Barriers to cross-border trade have substantial negative effects on businesses and consumers.

3. The Commission proposal

3.1 The Commission communication (4) sets out the decision to present a proposal for a regulation (5) establishing a Common European Sales Law, with the declared aim of improving the functioning of the internal market by facilitating the expansion of cross-border trade.

3.2 The Commission proposal is:

a) in terms of the instrument chosen: — an alternative set of contract law rules, identical in every Member State and applicable throughout the EU, which will co-exist with existing national legislation in the area of contract law; — an optional framework, chosen by the parties. The consumer must complete an explicit declaration in which he/she agrees to apply the Common European Sales Law; this declaration is distinct from that in which the consumer expresses his/her agreement to conclude the contract.

b) in terms of the form: as a Regulation, the Common European Sales Law will be generally and directly applicable.

c) in terms of the content: a comprehensive (183 articles) but non-exhaustive set of contract law rules, covering: — the general principles of contract law; — the parties' right to receive essential pre-contractual information, rules on how agreements are concluded, consumers' right to withdraw and the avoidance of contracts; — how contract terms need to be interpreted, rules on the content and effects of contracts as well as contract terms presumed to be unfair; — obligations and remedies of the parties; — supplementary common rules on damages for loss, interest for late payment; — restitution and prescription.

Certain aspects continue to be governed by applicable national legislation, on the basis of Regulation 593/2008 (6) (Rome I Regulation).

3.3 The Common European Sales Law focuses on contracts which are most relevant to cross-border trade (sales contracts between businesses and consumers or between businesses when at least one party is an SME, including contracts for the supply of digital content or related services).

3.4 The Common European Sales Law is limited to cross-border contracts (with the possibility for Member States to extend it).

4. General comments

4.1 The Committee welcomes the Commission's intentions to facilitate the expansion of cross-border trade for businesses (especially SMEs), encourage cross-border purchases by consumers and consolidate the advantages of the internal market.

4.2 The Committee stresses that the Common European Sales Law must comply fully with the principles of subsidiarity and proportionality.

4.3 With regard to the form (regulation) and option chosen (‘second regime’ in every Member State, which is optional and may be applied subject to explicit agreement by the parties), as previously expressed in the Committee's aforementioned opinion, ‘these objectives should be achieved incrementally, starting with cross-border commercial sales contracts for goods (B2B) on a pilot basis’.

4.4 With regard to the content, the Committee considers that the proposal for a regulation needs a number of important improvements in order to:

— facilitate transactions throughout the EU, make a powerful contribution to supporting economic activity in the single market and to further tap its potential;

— deliver genuine European added value, in terms of costs and advantages for economic operators and consumers;

— offer substantial advantages as regards better lawmaking and a simplified, understandable and user-friendly regulatory environment;

— cut the costs involved in cross-border transactions;

— ensure legal certainty and increased consistency between horizontal and vertical rules, with special focus on transparency, clarity and simplicity. This will benefit not only legal specialists but also and especially small businesses and consumers;

— guarantee that SMEs and consumers will benefit in practical terms from the new rules.

4.5 Previously, the Committee has stressed that ‘these objectives should be achieved incrementally, starting with cross-border commercial sales contracts for goods (B2B) on a pilot basis, as a useful means of putting the coexistence of the regimes to the test and monitoring how they are applied in practice’ (7).

Dividing up the Common European Sales Law, with the rules on contracts between businesses and the rules on contracts with consumers set out in two separate documents, and setting clear timeframes for each, will make it easier for legislators to decide which legislative technique should apply to each set of rules taking into account the bargaining power of the parties.

4.6 The current content of the Common European Sales Law has led to considerable dissatisfaction and criticism on the part of SME and consumer organisations that have questioned the factual need for an optional instrument to boost e-commerce and the legislative technique (optional regime) used in the field of business-to-consumer contracts.

4.7 The Committee calls on the Commission, the Council and the Parliament to take these aspects into consideration when shaping the Common European Sales Law, and to continue the dialogue with SME and consumer organisations, so that the Common European Sales Law caters more effectively for the needs of beneficiaries.

4.8 The Committee attaches great importance to the optional nature of the new rules and to guaranteeing freedom to negotiate as regards acceptance of the Common European Sales Law.

4.9 As regards big companies or companies in a dominant market position, the Committee recommends identifying the most appropriate accompanying measures which will make it easier for SMEs to exercise the free right to choose between the two regimes, in accordance with the optional nature of the Common European Sales Law.

4.10 In accordance with Articles 12 and 169 of the Treaty, consumer and SME protection requirements must be taken into consideration when designing and applying all EU policies and adopted measures.

4.11 The Committee points to major difficulties in applying the Common European Sales Law:

— the inter-relation between the optional instrument and European private international law, including overriding national mandatory provisions and public policy rules (Article 9 and 21 respectively, Regulation 593/2008), must be clarified;

— the role of the Rome I Regulation in the case of business-to-consumer contracts should be clarified explicitly taking into account the recent judgements of the Court of Justice of the European Union giving guidance in this respect;

— stronger legal certainty must be guaranteed and a complete set of contract law rules, which does not refer to the different domestic laws of the 27 Member States and which does not pose difficulties in terms of interpretation and application, must be drawn up.

4.12 The Committee points out that simply adopting the Common European Sales Law is not enough in itself to ensure the expansion of cross-border trade and to fully tap the single market's potential for economic growth and job creation.

4.13 In the context of the economic and financial crisis, every effort must be made to establish a framework able to drive exports and eliminate administrative costs; on the consumer side, it is important to boost consumer confidence in the internal market and to encourage consumers to make cross-border purchases by providing effective means of individual redress.

4.14 The Committee calls on the Commission and the Member States to continue their efforts to eliminate the remaining barriers to cross-border trade, to promote and support SMEs' export activities and to play an active part in identifying and applying the most appropriate measures enabling businesses and consumers to seize the opportunities offered by the single market. It stresses the importance of cooperation and proper dialogue between authorities and the social partners, including SME and consumer organisations.

4.15 The Committee draws attention to the importance of the accompanying measures needed to ensure that the parties subject to the eventual application of the Common European Sales Law, if finally adopted, find out about how to apply the law effectively and interpret it uniformly. By means of the Internal Market Information System (IMI system) and other information channels Member States must inform all stakeholders about the general content of the Common European Sales Law, as well as about the differences between national and EU legislation, including aspects of case law and best practice.

5. Specific comments

5.1 Making greater allowance for the specific characteristics of SMEs

5.1.1 The Committee considers that the proposal for a regulation should be improved, making more allowance for the specific characteristics of SMEs:

— 99,8 % of businesses are SMEs, 92 % of which are microenterprises with an average of two employees (8);

— microenterprises export to a small number of Member States, after analysing the market in depth;

— the standard business model of a microenterprise does not aim to conclude cross-border contracts in 27 Member States;

— there are major barriers to cross-border transactions by SMEs (set out in point 2.2.2).

5.1.2 The proposal is not sufficiently user-friendly for SMEs. A complex and abstract instrument in the field of contract law, referring in some areas to the different domestic laws of the 27 Member States, cannot be applied by SMEs without support services and legal advice. Tools are imperative and could encourage SMEs to opt for the Common European Sales Law.

5.1.3 SME organisations (9) support the need for a more even balance between the rights and obligations of parties in business-to-consumer contracts, calling for clarification and simplification:

— Article 23 (paragraph 1 on the duty to disclose information about goods and related services is too vague);

— Article 29 (sanctions are too extensive and uncertain);

— Article 39 (the terms of the offerer should prevail);

— Article 42(1)(a) (Withdrawal period) (the provisions of the Consumer Rights Directive should be taken over);

— Article 51 (urgent needs, being ‘improvident’, ‘ignorant’ or ‘inexperienced’ should not be a justification - the duty of ‘good faith and fair dealing’ is covering these situations envisaged in this article);

— Article 72 (in long negotiation processes parties should be able to contain all agreements in one contract, otherwise it means too much administrative – cost and time related – burdens for SMEs);

— Article 78 (in paragraph 1 has to be clarified that the consent of the other party should be asked as well, if any right is going to be conferred on third party;

— With respect to article 78(4) on the rejection of the conferred right to and by the third party, the words ‘impliedly accepted’ must be deleted. It makes the situation unsecure);

— Article 97 (the obligations on the parties have to be brought in balance);

— Article 130(3) and (5) (responsible custody by the buyer is missing);

— Article 142(4) (adding the ‘first’ carrier);

— Article 159(1) (more clarifications is needed);

5.1.4 The Common European Sales Law must ensure that the ‘think small first’ and proportionality principles are applied to their full extent at every stage, cutting red tape and needless expenses for SMEs. The Committee stresses that it is essential to keep regulatory costs at a minimum for SMEs, and calls on the Commission, the Council and the Parliament to take this aspect into consideration when shaping the Common European Sales Law.

5.2 Consumer protection

5.2.1 The Committee once again highlights the importance of ensuring legal certainty ‘based on the most advanced forms of protection for individual citizens and companies’, without preventing "any Member State from maintaining or introducing more stringent protective measures for consumers (10) and calls for ‘an “instrumental” single market that benefits citizens/consumers’ (11).

5.2.2 The content of the Common European Sales Law has led to dissatisfaction and criticism on the part of many consumer organisations (focusing on the low level of consumer protection in relation to Article 169(4) of the Treaty, the fact that the Common European Sales Law will be applied without really listening to the views of consumers, etc.) who would prefer that business-to-consumer contracts be excluded from the scope of the Common European Sales Law.

5.2.3 There are many examples which show that the proposal does not provide for the highest level of consumer protection:

— Article 5 (objectivity of reasonableness);

— Article 13(1) (exact meaning of ‘clear and comprehensible manner’);

— Article 13(3)(c) (absence of definition of ‘durable medium’);

— Article 19(5) (absence of definition of ‘reasonable time’);

— Article 20(2) (exact meaning of ‘day to day transaction’);

— Article 28(1) (exact meaning of ‘reasonable care’);

— Article 30(1)(c) (lack of definition of ‘sufficient content and certainty’);

— Article 42(2) (the sanction for not providing information should be to consider the contract null and void);

— Article 45 (the consumer should never bear the costs of returning goods);

— Article 52(2) (periods should be at least one year in the case of (a) and 2 years in (b);

— Article 53 (confirmation should never be implicit);

— Article 71 (drafting should be clarified);

— Article 74 (meaning of ‘grossly unreasonable’);

— Article 79(1) (there is no definition of the nature of the vice which leads to the ‘non binding’ effect);

— Article 79(2) (the directive does not consider the difference between essential and non essential elements of a contract);

— Article 82 (the directive omits the rules on the communication of clauses, information duties and rules which should be automatically excluded of the contracts irrespective of their unfair content, because they are against ‘bona fidei’ (good faith);

— Article 84 (the list of black clauses is too short and not in accordance with the most progressive national laws);

— Article 85 (the same applies to the grey list);

— Article 99(3) (provision totally unacceptable); Article 105(2) (the period should be at least 2 years);

— Article 142 (the juridical meaning and nature of the ‘physical possession of the goods’ is not equivalent to the different translations in different languages; according to different juridical national regimes);

— Article 142(2) (meaning of ‘control of digital content’);

— Article 167(2) (possibility of the anticipation of notice should be excluded);

— Articles 179 and 180 (the drafting should be clarified).

5.2.4 Special measures are needed to guarantee liability and cross-border follow-up in the event of fraud and scams with a view to boosting consumer confidence, 59 % of consumers citing this as a deterrent to cross-border transactions.

5.3 Drawing up European model contracts

5.3.1 The Committee underlines the need to draw up European model contracts which

— are available simultaneously with the publication of the Common European Sales Law and when it becomes effective;

— are designed for specific areas of trade or sectors of activity;

— contain comprehensive standard terms and conditions, which build on the acquis, guarantee a very high level of consumer protection in business-to-consumer contracts and freedom of contract in business-to-business contracts, and apply the Small Business Act fully;

— are available in all the official languages of the EU;

— are monitored and reviewed at set intervals, in order to improve the content by building on best practice, doctrine and case law.

The tools are very useful for SMEs wishing to conclude cross-border contracts with consumers.

5.3.2 Involving and cooperating with corporate, SME and consumer organisations when drawing up European model contracts is essential.

5.4 Guaranteeing stronger legal certainty

5.4.1 The proposal for a regulation poses problems in terms of establishing the appropriate legal basis, interpretation and application.

5.4.2 In many places, reference is made to domestic law (for example, legal personality, invalidity of a contract arising from lack of capacity, illegality or immorality, the determination of the language of the contract, matters of non-discrimination, representation, plurality of debtors and creditors, change of parties including assignment, set-off and merger, property law including the transfer of ownership, intellectual property law and the law of torts) which will require traders to study the legislative framework and pay for legal advice, as well as increasing legal uncertainty.

5.4.3 There are no mechanisms to ensure that the regulation is applied uniformly throughout the EU. A database of judicial rulings will not constitute a valid legal precedent for national courts which are competent for the interpretation and application of the regulation; with various possible interpretations, legal uncertainty will increase.

5.4.4 Judicial rulings should be monitored, best practice promoted and annual reports drawn up, at least for the first five years following the introduction of the regulation, so that the results can be assessed on an ongoing basis, best practice promoted and the necessary measures taken to facilitate the uniform interpretation of the regulation across the EU.

5.5 Further comment

In a time of crisis, it is unlikely that large budgets will be allocated at national level to measures providing information about and promoting the new rules. Point 4 (Budgetary implication) of the Explanatory Memorandum should include support measures involving training sessions organised by the Commission for representatives of corporate, SME and consumer organisations who will brief their members on the Common European Sales Law. It should also include support measures helping these organisations to provide advice free of charge on the application of the regulation.

Brussels, 29 March 2012. The President of the European Economic and Social Committee Staffan NILSSON

(1) OJ C 84, 17.3.2011, p. 1.

(2) OJ L 304, 22.11.2011, p. 64.

(3) Consumer Market Scoreboard, 5th Edition, March 2011.

(4) COM(2011) 636 final.

(5) COM(2011) 635 final.

(6) OJ L 177, 4.7.2008, p. 6.

(7) OJ C 84, 17.3.2011, p. 1.

(8) EUROSTAT.

(9) UEAPME's position papers:

http://www.ueapme.com/IMG/pdf/120119_pp_General_Remarks_CESL.pdf

http://www.ueapme.com/IMG/pdf/120119_pp_Specific_Remarks_CESL.pdf

(10) OJ C 84, 17.3.2011, p. 1.

(11) OJ C 132, 3.5.2011, p. 3.