Consumer can expect better terms of commercial guarantees

Zofia Brylińska-Karpicz

It is a year now that a new law on minimum terms of commercial guarantees for consumers entered into force. These provisions were enacted by amending the Consumer Rights Act, mainly with respect to consumer rights in the event of non-conformity of goods with the contract. The amending legislation also introduced minimum requirements for a “guarantee of durability” offered to consumers.

Changes to the commercial guarantees regulatory framework

The changes to commercial guarantees for consumers are the result of Polish implementation of EU law through Consumer Rights (Amendment) Act of 4 November 2022 which took effect on 1 January 2023. As regards commercial guarantees, the changes involved adding Article 43g at the end of the relevant chapter. This particular provision caused plenty of controversy among businesses. In accordance with Article 43g(2), a guarantee of durability may not offer repair or replacement on terms that are worse for the consumer than those laid down in Article 43d of the Consumer Rights Act. This reference means commercial guarantees fall under the repair and replacement provisions applicable in case of non-conformity.

“Guarantee of durability”

On its face, the new term “guarantee of durability” may seem inconsistent with contractual guarantee provisions contained in the Civil Code. It can thus be doubted that consumer guarantees should be governed by minimum requirements under the Consumer Rights Act. But while “guarantee of durability” is a new term that has not been known to Polish law before, it generally corresponds to what is currently regulated in the Civil Code as guarantee/warranty (gwarancja) or guarantee/warranty of quality (gwarancja jakości). The reason is that durability is defined as “the ability of the goods to maintain their functions and performance throughout normal use”. It will be remembered that these changes were made to implement EU law (Directive 2019/771), which often employs a different conceptual framework. It is thus important to understand what it means.

Impact of the changes

This seemingly small change in law has considerably increased consumers’ remedies under commercial guarantees. On the other hand, it added to the overall burden of businesses wishing to offer such guarantees. Previously, the guarantee framework offered a relatively large space for discretion, even  if it was generally constrained by the Civil Code and, partially, by unfair contract terms legislation. Now minimum guarantee requirements are outright regulated by statutory law.

New duties of commercial guarantors

Commercial guarantors have new duties primarily with respect to repair or replacement of goods complained about under the guarantee. First of all, the goods should be repaired or replaced within a reasonable time and without significant inconvenience to the consumer.

The vendor should, for example, pay the cost of the repair or replacement, including postage, carriage, labour and materials, and should take the defective goods from the consumer at its own cost. Moreover, if the goods complained about were installed, the vendor must remove them and then reinstall them after the replacement or repair, or alternatively, have them so removed and reinstalled at its cost. All in all, commercial guarantors face much greater  burdens than before. Currently it is the business party that must arrange and pay for having the defective goods taken from the consumer.

The consumer is in principle entitled to elect between repair or replacement. On the other hand, where reasonable, the vendor may choose repair over replacement or the other way round. It may also refuse to comply with consumer’s request if repair or replacement is impossible or would impose disproportionate costs on the vendor. Also, the consumer is not required to pay for normal use of goods which are subsequently replaced.

Guarantee statement

The 1 January 2023 amending legislation was concerned also with certain Civil Code provisions on guarantees/warranties. In particular, it elaborated on the prescribed content of a guarantee statement, which should now provide, inter alia, terms of the guarantee and a description of the procedure to be followed to obtain its implementation.

As such, the new law substantially enhances consumer rights under commercial guarantees. This should cause businesses to verify and modify their commercial guarantee terms. It might be that the guarantee for consumers should be re-established in accordance with the new rules.

Conclusion

Were the changes to the commercial guarantee framework really necessary? Based on market practice alone, the answer seems to be “no”. The previous law on product guarantees allowed for more discretion, with benefits for both consumers and businesses. With the law as it is, consumer rights in respect of non-conformity and those under commercial guarantees are largely on an equal footing now. I expect that this may discourage businesses from offering commercial guarantees or prompt them to reduce their durations. Consequently, commercial guarantees may well become purely provisional and more a marketing tool than an additional remedy for consumers.