On 25 December 2014, the Consumer Rights Act, which also amended the Civil Code and introduced several new regulations on sales contracts concerning goods and services, entered into force. The Act's regulations impose new obligations on entrepreneurs executing contracts with consumers, in particular entrepreneurs involved in distance sales or off-premises sales, but should these entrepreneurs be the only ones paying special attention to the amendments?
Scope of changes
The Consumer Rights Act dated 30 May 2014 (Journal of Laws of 2014, item 827) transposed Directive 2011/83/EU of the European Parliament and of the Council into the Polish legal framework. The Act also unified and arranged the existing consumer regulations to some extent. Several amendments to the Civil Code, in particular concerning sales contracts and related warranties and guarantees, were implemented at the same time.
Amendments to the Civil Code
From a practical point of view, the most important changes concern warranties for defects of a thing sold, in particular an extension of the warranty period. Prior to the Act’s entry into force, the warranty period stood at one year for movable items and three years for buildings. Other regulations stipulated two years’ liability of the seller towards the consumer for compliance of the item sold with the contract. Following the Act’s implementation the warranty period is now two years for movable items and five years for immovable properties.
The very structure of the warranty has also been changed and the effects of these changes can, depending on their application in practice, be far-reaching. For example, replacing the term "building" with the term "immovable property" can mean that the seller’s liability will be much extended. The regulations on guarantee made upon sale have also been greatly expanded. The new regulations apply to all types of sales regardless of whether the buyer is the consumer.
Furthermore, a regulation directly enabling the seller who incurred costs because the consumer made claims regarding physical defects of the thing sold, to claim compensation from that of prior sellers whose actions or omissions resulted in the thing being defective, has been introduced. This possibility cannot be excluded or limited by contract.
Who will be affected by the changes
Most of the implemented changes are of key importance to entrepreneurs selling goods and providing services to consumers. These entities are in principle well aware of the new regulations, in particular the resulting obligations and limitations, and have taken the appropriate adjustment measures. However, the amendment of the Civil Code will also affect entities that are not directly involved in consumer transactions.
Extending the warranty periods that have been applicable for many years should be taken into account by everybody making a sales contract even if this is only an occasional one (for example upon the sale of a car or flat).
The manufacturers of products or contractors of works co-operating with entities that subsequently sell manufactured goods must take into account that these entities will demand longer warranty periods than those that typically applied before the Act’s entry into force. For example, because the warranty period has been extended to five years upon the sales of an immovable property, developers have already started to require construction contractors to extend the guarantee periods they had used to date for works performed in order to mitigate the risk that these periods will end before the real property acquirer’s warranty period runs out.
Entrepreneurs involved in the "chain of supply" of goods sold to consumers (e.g. importers, wholesalers) should verify their agreements for compliance with a new mandatory regulation concerning claims of final sellers.
What to do?
Sellers should first of all remember that the warranty periods stipulated in the Civil Code can in general be modified freely in "non-consumer" transactions, including those made between two non-professionals. If however the thing sold originally by a professional is to be finally acquired by a consumer, it will be rather difficult to obtain the buyer’s consent to limitations being made to the seller’s liability. Therefore, entrepreneurs who may be affected by the new regulations should analyse them in order to determine the actual impact on the activities that they carry out. Another step is to verify the procedures and documents being used and to implement changes aimed at eliminating any identified risks and adapting to new legal conditions as optimally as possible.