European Union: Court Of Justice Of European Union Clarifies Rules On Limitation Periods Under Sales And Guarantees Directive

Last Updated: 11 September 2017
Article by Koen T’Syen

On 13 July 2017, the Court of Justice of the European Union (the "ECJ") held that a limitation period for action by the consumer which is shorter than two years from the time of delivery of the goods is incompatible with Directive 1999/44/EC of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees (the "Directive") (ECJ, 13 July 2017, Case C-133/16, Christian Ferenschild v. JPC Motor SA).

The ECJ delivered its judgment in response to a request for a preliminary ruling from the Mons Court of Appeal in a dispute between Christian Ferenschild ("Mr. Ferenschild") and JPC Motor SA ("JPC"). Mr. Ferenschild had purchased a second-hand car from JPC on 21 September 2010 but was subsequently unable to register the vehicle on 22 September 2010 because of a lack of conformity of the documents accompanying the car. The vehicle bought by Mr. Ferenschild was ultimately registered on 7 January 2011.

Article 1649quater, §1 of the Civil Code provides that the duration of the guarantee period is two years from delivery of the goods. For second-hand goods, this period may be reduced to a period of not less than one year by mutual agreement between the parties. Mr. Ferenschild and JPC had supposedly made use of that possibility. Furthermore, Article 1649quater, §3 specifies that actions by the consumer become time-barred after a period of one year from the day on which the consumer detected the lack of conformity, but that such limitation period may not expire before the end of the two-year guarantee period referred to in Article 1649quater, §1.

To obtain the reimbursement of costs incurred as a result of the lack of conformity, Mr. Ferenschild brought proceedings on 12 March 2012 before the Mons Commercial Court which dismissed the action. Mr. Ferenschild appealed the judgment to the Mons Court of Appeal. The Court of Appeal found that the vehicle sold lacked conformity within the meaning of Article 1649bis et seq. of the Belgian Civil Code, but that the conformity appeared to have been resolved following registration of the vehicle. However, it decided of its own motion to allow the parties to make submissions on whether the action was time barred.

Pursuant to Article 5(1) of the Directive, "[t]he seller shall be held liable under Article 3 where the lack of conformity becomes apparent within two years as from delivery of the goods. If, under national legislation, the rights laid down in Article 3(2) are subject to a limitation period, that period shall not expire within a period of two years from the time of delivery". Moreover, in the second sentence of Article 7(1), the Directive authorises "Member States [to] provide that, in the case of second-hand goods, the seller and consumer may agree contractual terms or agreements which have a shorter time period for the liability of the seller than that set down in Article 5(1). Such period may not be less than one year".

In this context, the Mons Court of Appeal decided to stay the proceedings and questioned the ECJ on whether Article 5(1) of the Directive, read in conjunction with Article 7(1), precludes a provision of national law, such as Article 1649quater, §3 of the Belgian Civil Code, if it is interpreted as allowing, for second-hand goods, the limitation period for action by the consumer to expire before the end of the two-year period as from delivery of the goods, where the seller and the consumer have agreed on a guarantee period of less than two years.

At the outset, the ECJ noted that the Directive distinguishes two types of time limits, each with a specific purpose. While the time limit set out in the first sentence of Article 5(1) of the Directive refers to the period during which the seller is liable where a lack of conformity of the goods at issue becomes apparent, the second sentence of Article 5(1) provides for a limitation period which limits the time during which the consumer can actually exercise the rights that arose in the period of liability of the seller.

The ECJ then considered whether the decision to impose a limitation period for action by the consumer is a matter for national legislation. However, it follows from Article 5(1) of the Directive that if a limitation period is imposed under national law, that period cannot expire within two years from the time of delivery of the goods concerned, even if, under national law, the limitation period does not commence at the time of delivery of the goods. According to the ECJ, in order to ensure a uniform minimum level of consumer protection, the Directive established two distinctive time limits, namely a period of liability of the seller and a limitation period, the mandatory minimum duration of each being, as a rule, two years from the time of delivery of the goods concerned.

Considering the above, the ECJ observed that (i) the limitation period of at least two years from the time of delivery of the goods is an important element of consumer protection guaranteed by the Directive; and (ii) the duration of that period is not contingent on that of the period of liability of the seller. The fact that the second sentence of Article 7(1) provides for the possibility of agreeing on a shorter liability period for second-hand goods does not warrant a different interpretation.

The ECJ noted that a national rule which would allow the limitation period offered to consumers to be shortened as a consequence of the reduction of the period of liability of the seller to one year would result in a lesser level of consumer protection and would undermine the guarantees afforded to consumers under the Directive. The ECJ therefore concluded that the Directive precludes a rule of an EU Member State which allows the limitation period for action by the consumer to be shorter than two years from the time of delivery of the goods where the EU Member State has made use of the option given by Article 7(1) of the Directive and the consumer and seller have agreed on a period of liability of the seller of less than two years for the second-hand goods concerned.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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