As part of the EU’s Digital Single Market strategy, two new Directives are due to come into effect on 1 January 2022. Both relate to the sale of goods to consumers and will have implications for UK businesses that sell goods or digital content and/or services to consumers in EU Member States.
They are intended to work together and complement each other for business-to-consumer (B2C) contracts. They are the:
Sales of Goods Directive (2019/771) (SGD)
Digital Content and Services Directive (2019/770) (DCSD)
These directives will have implications for UK businesses that sell goods or digital content and/or services to consumers in EU Member States.
The Sales of Goods Directive (SGD)
The main aim of the SGD is to increase protection for consumers when they are purchasing products and services in the EU – it will be the governing law even if the supplier is based in the UK. It applies to the sale of all goods, including goods that have some sort of digital element to them (for example, a smart television or a smart watch).
The Digital Content and Services Directive (DCSD)
The DCSD sets out new safeguards for consumers buying digital content (such as movies, games or electronic books) or digital services (such as cloud-based services, apps, streaming services). It also aims to provide further protection for those who exchange personal data for digital services or content that goes beyond the minimum level required under the EU’s standards.
These Directives will not have implications for companies in the UK that are selling to UK consumers (because of Brexit). However, all UK companies that operate within EU member states will need to update their contracts to comply with the Directives from 1 January 2022 and will not be able to contract out of them.
7 differences between the CRA and the SGD/DCSD
The Consumer Rights Act 2015 (CRA) applies to the supply of goods and services contracts within the UK and will continue to do so. The new EU Directives only apply to supply of goods and services from the UK to EU.
The Directives contain similar provisions to the CRA but there are significant differences which we have set out below.
Under the CRA, as the Supplier, you’re not liable for defects – as long as the defect has been made known to the consumer or was evident on inspection.
Under the new Directive, you’ll have to get express and separate acceptance for any defects to the goods or services.
2. Fit for Purpose?
Under the CRA and the SGD, the goods or services supplied must be fit for a particular purpose. However, the SGD also requires that this purpose must be made known to the supplier before the contract is finalised and the supplier must accept that the goods or services are fit for this particular purpose.
3. Burden of Proof
Both the CRA and SGD include this obligation for the consumer to prove that the goods or services are faulty, however the time frame differs. The difference is that under the CRA the consumer has 6 months to bring the defect to the Supplier’s attention, whereas under the new directive they have 2 years.
4. Conformity Requirements
The EU Directives add a new requirement for all digital content, goods and services to be supplied with all the accessories and instructions that a consumer would reasonably expect.
The EU Directives reduce the guarantee period from 6 years (under the CRA) to 2 years.
6. Minimum Claim Period
The Directives also reduce the minimum claim period, from 6 years (under the CRA) to 2 years.
7. Short Term Right to Reject
This right is not included in the new EU Directives. Under the CRA there’s a 30-day period after delivery/transfer of title to reject the goods/services.
Table of key differences between the Consumer Rights Act 2015 and New EU Directives (from January 2022)