Common European Sales Law and UK Consumer Rights Bill to be discussed on same day

The Proposed Regulation on a Common European Sales Law (CESL) will be debated by the full European Parliament on the morning of Tuesday 25 February: the vote will take place on the afternoon of the following day.

This will be a key test for the proposal. As noted in earlier posts, the Legal Affairs Committee is strongly in favour of the proposed optional European sales law and has put forward a number of useful and constructive amendments, taking full advantage of the input of experts, consultees and stakeholders including, notably, the European Law Institute. However, the (rather divided) Internal Market and Consumer Protection Committee was not so keen on the idea of an optional instrument and has put forward amendments designed to convert the proposed optional instrument into a compulsory instrument, something which has little or no chance of proceeding further. It will be interesting to see what happens.

25 February is also the day when the new UK Consumer Rights Bill next comes before the Public Bills Committee of the House of Commons.

It is interesting to compare the CESL with the sales provisions of the UK Bill. Both are trying to do the same sort of thing but in some key respects the CESL comes out better. For example, the buyer’s remedies when goods are not conform to contract are set out much more clearly and simply in the CESL. There is a simple non-hierarchical list: the buyer has a free choice: nothing turns on the type of term which has been breached. In the Consumer Rights Bill the remedies vary depending on the type of term which is breached. There is one set of remedies for breach of certain statutorily included terms (the old implied terms under a new name) and there are different sets of remedies for breach of other terms, including express terms. Distinguishing between express terms and legally implied terms in this way seems a highly dubious way of proceeding – even worse than the discredited technique of distinguishing between conditions and warranties.

The Consumer Rights Bill also ties itself in knots in order to confer a new composite ‘right to reject ‘. This is not the right to reject the goods of the Sale of Goods Act 1979. It has nothing to do with returning the goods to the seller (or making them available for collection): that is now seen, correctly, not as a right of the buyer but as an obligation of the buyer which follows on termination of the contract and which corresponds to the seller’s obligation to refund the price if it has already been paid. The new ‘right to reject’ is instead a combination of a rather pallid right to reject the goods (which, according to the Bill, is exercised by just indicating to the seller that they are rejected) and a right to terminate the contract (described in the Bill as ‘treating the contract as at an end’). There is no need to legislate for a right (technically, a freedom) to decide that non-conforming goods are not acceptable and to tell the seller this. It would infringe basic human rights to deny such a freedom. So this element in the composite ‘right to reject’ is superfluous. The key element is the right (technically, a power) to terminate the contract. In reality the composite ‘right to reject’ seems to be nothing more than a right to terminate the contract. The Bill would have been much simpler if it had just said this. Of course, it will be said that the Law Commissions’ consultations revealed that the ‘right to reject’ was immensely popular in the UK but it is not the right to reject the goods which is popular. Consumers generally couldn’t care less if the seller said ‘You can keep the goods and get your money back’. It is the right to end the buyer-seller relationship and obtain a refund which is popular. The ‘right to reject’ of popular imagination is just a misleading and confusing way of describing the right to terminate the contract.

In many respects the Consumer Rights Bill is admirable. There are many fine drafting features, for example, and it should bring increased clarity in a number of areas. But its approach to remedies in general and the composite ‘right to reject’ in particular seems unnecessarily complicated and idiosyncratic.

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