New directives for Polish law - privileges for consumers, obligations for traders.
The regulations implementing the so-called Omnibus Directive and the Goods Directive came into force on 1 January 2023. They mostly apply to consumer sales – both distance and in person , but in some cases it involves sole traders. The new rules certainly empower buyers’ position and make it necessary for traders to analyse their existing sales processes and make the necessary modifications.
Omnibus Directive
The implementation of the so-called Omnibus Directive has been dispersed in several Acts, including the Consumer Rights Act, the Act on The Information on Prices of Goods and Services and the Competition and Consumer Protection Act.
One of the more significant changes concerns the obligation of traders to inform about the lowest price of a product or service applicable in the 30 days prior to the reduction. According to the new wording of Article 4 of the Act on The Information on Prices of Goods and Services, in each case of providing information on a price reduction, it is now obligatory to provide also information on the lowest price of that product (or service) that was applicable in the 30 days prior to the reduction. The legislator’s main purpose is to protect against excessive prices and then lowering them and suggesting to the customer that the current offer is more attractive than the previous/regular one.
In the case of “novelties”, i.e. products or services offered for sale in less than 30 days – in addition to information on the reduced price – information shall include the lowest price for that product or service which was in force between the date on which the sale of the product or the offer of the service commenced and the date on which the reduction was introduced.
It should be borne in mind that the Act on The Information on Prices of Goods and Services, which introduces the aforementioned change, applies to sales not only to consumers, but also to retail sales (i.e. also when the retail customer is a trader). While the new regulations shall not apply (for example) to sales by an importer to a car dealer, they shall apply to retail sales by a dealer. When applying a price reduction, the dealer shall be obliged to inform about the lowest price of the products which was in force during the 30 days prior to the reduction – even in a case of sale to another trader (retail customer).
For non-compliance with the above obligation, the legislator has provided for a fine of up to PLN 20,000 to be imposed by the Voivodeship Trade Inspectorate Inspector. If a trader fails to comply with the information obligation at least three times within a period of 12 months (counting from the date on which it was found that the obligation was breached for the first time), the Voivodeship Trade Inspectorate Inspector shall impose on it a fine of up to PLN 40,000.
However, this is not the only change resulting from the Omnibus Directive that is relevant from a business perspective. A seller offering access to product reviews written by other consumers has an obligation to indicate whether (and how) it ensures that the published reviews come from consumers who have used or purchased the product in question.
Publishing (or commissioning the placement) of false customer reviews and recommendations, distorting (e.g. hiding) unfavorable reviews- now it is constitute an unfair market practice under Article 7 of the Act on Counteracting Unfair Market Practices.
Unfair market practice shall also be an act if a trader who allows product reviews to be posted, claims, that they are from consumers who have purchased or used the product, whereas the trader has made no effort to determine whether those reviews are in fact from those consumers.
The changes introduced undoubtedly make things easier for consumers (and also for sole traders when their transactions are not related to professional activities). For sellers, however, they entail the need to organise their sales processes accordingly and, if necessary, make modifications.
Goods Directive
The implementation of the so-called “Goods Directive” mainly changes the existing rules on the liability of the trader and the claims of consumers in case of non-conformity of goods with the contract. The concept of ‘non- conformity of goods with the contract’ replaces the previous concept of ‘warranty’. As a consequence, the consumer warranty regulations in the Civil Code no longer apply, as of 1 January 2023, to contracts obliging the transfer of ownership of a product to a consumer (including, in particular, contracts of sale, contracts of delivery and work contracts which subjects are goods). They have been replaced by new provisions of the Consumer Rights Act (CPR). Importantly, the new regulations (CPR) apply not only strictly to the consumer (natural person), but also to a sole trader who concludes a contract related to his/her trade activity, but at the same time not related to his/her professional activity. Thus, the regulations in question shall apply both when a consumer buys products, e.g. a car for his private use, and when, for example, a lawyer buys a car for the purposes of his trade activity. This will be a purchase justified from the perspective of the functioning of his business (he commutes to clients, courts, office, etc.), but it will not be a transaction related to his professional activity (he does not drive professionally).
From the beginning of this year – in the case of non-conformity of goods with the contract – the consumer (also those running a business activity) may use the rights under the CPR. In accordance with the content of the new Article 43b of the CPR, goods are in principle in conformity with the contract if, in particular, their:
- the description, nature, quantity, quality, completeness and functionality, and, in the case of products with digital elements, also the compatibility, interoperability and accessibility of the update;
- suitability for the specific purpose for which it is needed by the consumer, which the consumer has made known to the trader at the latest at the time of the conclusion of the contract and which the trader has accepted.
The trader’s liability for the non-conformity of the goods with the contract can be excluded if three conditions are cumulatively met. Firstly, the consumer must be expressly informed that a specific characteristic of the products deviates from the requirements of conformity with the contract. Secondly, such information must be communicated to him at the latest at the time of the conclusion of the contract. Thirdly, the consumer must expressly and separately accept the lack of a specific characteristic of the products.
However, when the goods are found not to be in conformity with the contract (and the conditions for excluding the seller’s liability are not met), the consumer may request repair or replacement. The trader may choose either replacement (when the consumer demands repair) or repair (when the consumer demands replacement) in situations where it is impossible or would involve excessive costs for the trader to bring the goods into conformity with the contract in the manner chosen by the consumer. If repair and replacement are impossible (or would involve excessive costs for the trader), the trader may refuse to bring the goods into conformity with the contract.
If such a situation arises, the consumer shall be able to exercise the right to make a declaration of price reduction or withdraw from the contract. This applies if:
- the trader has refused to make the goods conform with the contract,
- the trader has failed to bring the goods into conformity with the contract,
- non- conformity of the goods continues even though the trader has tried to bring the goods into conformity,
- non- conformity of the goods is sufficiently serious to justify either a reduction in price or contract rescission without first having recourse to the other remedies – replacement or repair,
- it is clear from the trader’s statement or the circumstances that the trader shall not bring the goods into conformity within a reasonable time or without excessive inconvenience for the consumer.
The trader shall be liable for the non- conformity of the goods with the contract which existed at the time of delivery and which is revealed within two years of that time – compared to the previous warranty regulations, this time limit has not changed, unless the shelf life of the products is longer. A non- conformity of the goods with the contract that becomes apparent before the expiry of two years from the delivery of the products shall be presumed to have existed at the time of delivery, unless the contrary is proven or such a presumption cannot be reconciled with the specific nature of the products or the nature of the non- conformity of the goods with the contract.
If the consumer chooses to make a complaint, the trader is obliged to respond to it within 14 days of receipt (otherwise it is deemed justified). The limitation period for consumer claims for non-conformity of goods with the contract has been extended to 6 years.
Summary
The changes introduced undoubtedly represent a convenience for consumers (and also for sole traders, when their transactions are not related to professional activities). For sellers, including dealers, however, they entail the need to organize their sales processes accordingly and, if necessary, make the appropriate modifications to remain in line with the changes.
Authors:
Anna Ziemnicka-Milej, Partner, Barrister
Agnieszka Mazur, Junior Associate, Barrister trainee