Obligations and Remedies Under a Related Service Contract
© Springer International Publishing Switzerland 2015
Javier Plaza Penadés and Luz M. Martínez Velencoso (eds.)European Perspectives on the Common European Sales LawStudies in European Economic Law and Regulation410.1007/978-3-319-10497-3_1212. Obligations and Remedies Under a Related Service Contract
(1)
University of Valencia, Valencia, Spain
Abstract
Following the model of Directive 2011/83/EU of the 25 October 2011 on consumer rights, the proposed CESL regulation is structured on the basis of sales and service contracts. With regard to service contracts, however, the CESL only regulates those service contracts whose existence is justified by their direct link to sales contracts.
The provisions of service contracts, that are regulated, are equivalent to the performance of the ‘giving’. Therefore, the CESL refers in its formulation to the traditional distinction between obligation of means and the obligation of results, requiring in this case, the performance of a particular result, regardless of whether it is free of charge or onerous.
This treatment justifies that the breach of related services has to be redirected, in order to consider it as a lack of conformity in the contract of sale or supply of digital content.
However, the regulation of services provided by the DCFR is more extensive. This regulation, unlike that of the CESL, which is limited to the regulation of sales contracts, is contained in a generally applicable section of the instrument. This regulation is applicable to all services and, in particular, to the related services contracts, and is followed by the regulation of six types of contract: construction, processing, storage, design, information and advice, and treatment; which are omitted in the CESL.
Nor do the national laws of each Member State of the EU offer a regulation of related services contracts in particular. Therefore, the incorporation of Part V of the CESL should not, in principle, be considered as a potential source of conflict when there is an agreement between the parties, but a mechanism that will help to resolve situations that are difficult to fit into a concrete legal framework. However, it is important to highlight that, in the same way as it is intended to unify the rules of sale, it would be desirable to advance a model to establish at least a uniform regulation in the basic rules of the provision of services.
Keywords
Related services contractRight to withdrawObligations of the parties in the service contractRemedies in the service contractDuty to disclose information12.1 The Nature of the Issue
12.1.1 Background and Explanation for the Regulation
The existence of a single market implies the existence of a set of rules to facilitate the exchange of goods and services within the EU, the fewer inequalities there are between the rules of the Member States the better the free circulation of goods will be.
Given the existence of the different content of the rules in the EU, as highlighted by the Communication of 2001, which identified the fragmented legal framework in the field of contract law together with the obstacles that this carries with it to cross-border trade. In July 2010, the Commission launched a public consultation with the Green Paper on policy options for progress towards a European contract law for consumers and businesses, setting out policy options in order to strengthen the growth of the internal market in the area of European contract law.
On the 8 June 2011, in response to the Green Paper, the European Parliament issued a Resolution expressing its strong support for the development of an instrument that would improve the establishment and functioning of the internal market, benefiting traders, consumers and judicial systems of the Member States.
To this end, the instrument chosen to develop this initiative is a Regulation on a Common European Sales Law (CESL).
The CESL focuses on the harmonisation of the contract laws of Member States, not by modifying the existing national contract laws in force, but creating within the legal systems of each Member State, a second regime of contract law for contracts that fall within its scope of application, which must be identical throughout the European Union and coexist with the rules of the national contract laws in force in each Member State, on a voluntary basis and upon the expressed agreement of the parties.
Among the innovations introduced by this proposal, it is worth noting the unification in the regulation of the model of sales contracts, the sale of digital content and the related services contract . As set out in its recital number 19, its aim is to maximise the added value of the common European sales law, which justifies the inclusion in its material scope of certain services provided by the seller that are directly and closely related to the specific goods or digital content supplied on the basis of the said rules. These are, in practice, often mixed in the same contract or in a related contract concluded at the same time, as happens in relation to repair services, maintenance or installation of the goods or the digital content, or temporary storage of digital content in the provider’s cloud, whose execution is very close to the sale, as if it were another provision.
12.2 Related Services Contracts
12.2.1 Concept
The proposal for an optional instrument is structured on the basis of the sale-services dichotomy, so that the contracts to which it is applied can only be sales contracts or contracts related to specific services. It should also not be forgotten that this concept is closely linked with initial Part IV, which regulates the obligations and remedies of the parties to the sales contract.
The CESL does not contain any definition of the services contract; it only defines related services, redundantly, for example: placing, installation, maintenance, repair or other treatment provided by the seller of goods or provider of digital content. For this reason it is important to underline that the CESL does not affect all service contracts but only those very specific services that are linked to the sale of goods or digital content.
Specifically, art. 2(m) defines “ related services” as “any service related to goods or digital content, such as storage or any other processing, including installation, maintenance, 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 of the contract for the supply of digital content”.
Therefore, the definition given by the Proposal covers two cases.
The above article links, firstly, a service to a sale of goods or digital content that has been executed. Then, the article defines the related services as: any goods or digital content related services; such as: storage or any other processing, installation, maintenance, repair or any other treatment that has been provided by the seller of the goods or provider of digital content under the sales contract or under the digital content contract. However, the second meaning of related services has a different scope because it also includes related services contracts that are concluded separately and at the same time as the sales of goods contract or the supply of digital content contract or provided for, even if only as an option, in the sales contract or in the contract for the supply of digital content.
This systematic framework makes it clear that the treatment given to the related service has no autonomy, but it is subject to the main contract. For instance, the conclusion of the sales contract or the supply of digital content contract, being the first main contract, will initiate the second contract. The same interpretation is to be given to the third case because they are contracts that have been formed at the same time and with the aim of completing the main contract.
In addition, art. 5 sets out that the CESL may be used for: “c) related service contracts, irrespective of whether a separate price was agreed for the related service”.
However, pursuant to art. 7, the CESL “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’)”.
The following are excluded from this scheme:
a.
transport services,
b.
training services,
c.
telecommunications support services, and
d.
financial services.
That is to say, it excludes all those contracts that are not subject to the performance of an agreed sales contract. The intention of the Proposal for a Regulation is very clear: to establish exclusively a regulation on the sale of goods or digital content.
Moreover, the regulation of these services is not independent from the sales contract; and the regulation only includes those services related to a sales contract of personal property that has been concluded at the same time. Mixed contracts also opt for the application of the rules of the sale to apply to the services.
This regulation is not compiled in this way in any EU Member State—although, for example, there is extensive regulation of the service contract in the German BGB (sections 607–630 BGB), but it is redirected in his treatment to that provided thereby for the service contract or, where appropriate, in its treatment of work contracts.
12.2.1.1 Regulation in the DCFR
The regulation contained in the DCRF has a different purpose as it is applicable to all services, while the rules included in the CESL are only applicable to the related services included in it. In contrast to those mentiones in the DCFR, the CESL only includes the processing service, expressly excluding the others.
The DCFR contains a general category applicable to all the services, which highlights the common aspects of the performances to be carried out, and then a general category that regulates and has special implications in each field of business: construction, processing, storage, design, information and advice, and treatment.
The regulation of services in the DCFR is contained in Book IV that is entitled “Specific contracts and the rights and obligations arising from them”; and which, in art. IV.C.-1:101, includes the scope of the service contract as being “contracts under which one party, the service provider, undertakes to supply a service to the other party, the client”. The CESL excludes, specific types of contractual services included in chapters 3–8 of Book IV, Part C DCFR, following the recommendation of the Green Paper on policy options for progress towards a European contract law for consumers and businesses, since this Paper stated that the regulation of sales contracts shall be included, but not services contracts. The purpose of the DCFR, unlike the CESL, is to regulate the activity undertaken by a multitude of economic agents, which undertake the tasks of: construction, maintenance and repair of goods, storage and safekeeping, design and project development, information and professional advice, and medical activity; but excludes a systematic regulation of the service contract citing the existence of sector-specific regulations and the heterogeneity of the issue. The DCFR only provides a collateral regulation of the related services to the sale of goods and digital content, some of which could be described as post-sales services, for which specific obligations and remedies of the parties are stated.
The DCFR also differs as to the scope of application of the service contract, defined as a contract under which one party undertakes to supply a service to the other party in exchange for remuneration. However the CESL expands this concept to the contracts in which the provider performs a service without the right to receive payment from the client.
12.2.2 The Parties
Pursuant to art. 2of the CESL, two parties are involved: the service provider and the costumer.
The “‘service provider’ means a seller of goods or supplier of digital content who undertakes to provide a customer a service related to those goods or that digital content;” and, the “‘customer’ means any person who purchases a related service”.
The concept of customer does not clarify if this definition includes consumers and businesses or only consumers. It is not clear whether the contracts shall be concluded between a trader and a consumer or, on the contrary, the contract may be concluded between traders. In this event, we cannot assume that the customer may only be a consumer. This matter is completely clear in other types of contracts, such as the ones set out in art. 2(p), which defines the concept of distance contracts and off-premises contracts, stating expressly that these contracts must be entered into between a consumer and a trader.
Following the policy of different Community Directives, the reference to the term ‘person’ must be understood as referring exclusively to the natural person and not to legal persons, which would exclude a customer from being a business. In this regard, the DCFR defines ‘consumer’ as “any natural person who is acting any primarily for purposes which are not related to his or her trade, business or profession” (art. I.-1:106).
12.2.3 Application of Certain General Rules to Related Services
12.2.3.1 The Duty to Disclose Information About the Goods and Related Services
This obligation is contained in art. 23 of the CESL, located in section 2, which regulates the pre-contractual information to be provided by the trader who deals with another trader, stating that :
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 circumstances, including:
a.
whether the supplier had a 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.
In the DCFR, pre-contractual obligations of notice or information are regulated by establishing, in advance, before the conclusion of the contract; that the trader is bound by an obligation to warn the client (art. IV.C.-2:2102 DCRF).
12.2.3.2 Right to Withdraw
The right to withdraw will not apply to “a contract for the supply of goods or related services for which the price depends on fluctuations in the financial market which cannot be controlled by the trader and which may occur within the withdrawal period” (art. 40.2(c) CESL).