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Consumer Protection: Right to Complaint for Nonconformity of Goods and Sellers’ Obligations

Consumer Protection: Right to Complaint for Nonconformity of Goods and Sellers’ Obligations

Serbia
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The Law on Consumer Protection (Official Gazette of RS no. 62/2014, 6/2016 – other law and 44/2018 – other law; “LCP 2014“) prescribes seller’s liability for non-conformity of goods that occurs within a period of two years after the transfer of risk to the consumer.

What is actually conformity of goods?

The term conformity was introduced into the domestic legal system in 2010, by adoption of the Law on Consumer Protection (Official Gazette of RS no. 73/2010, “LCP 2010“).

In general, conformity means that a consumer has been delivered goods with appropriate characteristics as to their use, hence this institute actually protects reasonable expectation of consumers that they will be able to use the purchased goods without any restriction in a certain period of time i.e. that the goods will not have defects to prevent such use.

Before the adoption of the LCP in 2010, consumer protection was legally guaranteed for a much shorter period. The Law on Consumer Protection (Official Gazette of RS no. 79/2005, “LCP 2005“) prescribed consumers’ right to complaint for shortcomings that appear within six months after purchase, whereas in case of Law on Consumer Protection (Official Gazette of RS no. 79/2002, “LCP 2002“) such period was 90 days. The two-year deadline was introduced only through the LCP 2010.

In addition, the LCP introduced another significant novelty, which was finally the elimination of all forms of legal entities and entrepreneurs from the definition of “consumer”. Today, consumer is only considered a natural person purchasing goods or services in the market that are not intended for business or other commercial activity.

This means that rights on basis of conformity are only allowed to and may only be exercised by natural persons who purchase goods and services for personal use.

Conformity of goods vs. guarantee for goods

Although the term “conformity” has appeared in regulations for more than 10 years, it seems that it has not been very much used in practice and that its subjects – consumers, do not sufficiently understand it.

In most cases this term is confused and mixed with the term “guarantee”. However, the LCP 2014, alike LCP 2010 before it, make a clear distinction between these two terms.

Guarantee is any statement whereby its giver makes promises relating to goods and it is legally binding under the terms given in the statement and in advertising of such goods. These are additional rights that are guaranteed to the consumer by default by manufacturer, importer or retailer, hence the guarantee does not exclude or affect the rights of consumers relating to conformity of goods with the contract.

Unlike the rights based on conformity whose realisation does not require a seller to issue any additional document, in case of warranty so-called warranty lists are issued that contain additional rights that may be exercised by consumers in a warranty period.

The LCP 2014 explicitly prohibits the abuse of term “guarantee” and prescribes that a seller shall refrain from the use of that and similar terms if based on sale agreement the consumer does not acquire more rights than under seller’s legal liability for nonconformity of goods.

Basically, these are two types of guarantees that have different legal bases – one is legal because it is based on the law, whereas the other one is contractual because it is based on purchase agreement and it is directly binding upon the guarantor against the consumer. We believe that the use of these or similar terms in domestic regulation would significantly simplify the understanding of rights and their practical application, particularly considering that similar terms are also used in the relevant EU Directive: “legal guarantee of conformity“ and “commercial guarantee”.

Deadlines

As stated above, under the LCP 2014 seller shall be liable for nonconformity of goods with the contract that occurs within a period of two years before the transfer of risk to the consumer.

If nonconformity disappears within six months after the transfer of risk to the consumer, it is assumed that the nonconformity existed at the moment of risk transfer, unless this is contrary to the nature of goods and nature of particular nonconformity.

In the case of sale of second-hand goods, a shorter deadline may be agreed for seller’s liability for nonconformity, whereas it cannot be shorter than one year.

With regard to goods whose shelf life is shorter than two years (e.g. batteries, chargers etc.), seller’s liability for nonconformity reasonably cannot last for two years. According to the ministry in charge of trade, in such cases sellers shall be obliged to notify consumers thereof before the conclusion of purchase agreement (“obligation of pre-contract notice“) because this is considered a significant feature of goods.

In any case, the stated deadlines are not running in the period used by seller to eliminate nonconformity.

The manner of complaint

In order to exercise the right based on conformity or guarantee, consumers needs to complain to the seller that sold them the goods.

Complaint can be addressed orally at a selling point where the goods were purchased or another place designated for complaints, by phone, in writing, electronically or via permanent record carrier.

Consumers need to provide a receipt or other proof of purchase (copy of receipt, slip etc.) along with complaint. Previous legal provisions contained in the LCP 2002 and LCP 2005 envisaged mandatory provision of receipts for the purchased goods.

The LCP 2014 explicitly prescribed that the inability of consumers to provide packaging of goods to the seller cannot be a condition for resolution of complaint or a reason for refusing to eliminate nonconformity, however in practice sellers often insist on this.

Seller’s obligations in connection with the receipt of complaints

In accordance with LCP 2014, the seller is obliged to:

  • visibly display a notice at the point of sale on the manner and place of receipt of complaints,
  • ensure the presence of a person authorized to receive complaints during working hours,
  • keep records of received complaints for at least two years from the day of submitting consumers’ complaints,
  • issue a written confirmation to the consumer or confirms the receipt of the complaint electronically, i.e. communicate the number under which a complaint is registered in the records of received complaints.

Contrary to the consumer’s right to be delivered a compliant product, there is an economic interest of the seller to protect himself from unfounded objections to the properties and performance of the purchased goods. In practice, this often means that sellers automatically reject complaints, or that they take over the right to choose “replacement or repair”. The sellers themselves should take care of the education of their own staff in connection with resolving complaints, as well as to regulate this procedure by internal acts (procedures, etc.) within the framework of the binding legal regime, but also to adjust the same to the goods they sell.

Seller’s response to complaint

Upon receipt of complaint, seller shall be obliged to issue to the consumer a written confirmation or to confirm the receipt of complaint electronically and to notify the consumer of the registration number of such complaint in the records of complaints.

Seller shall immediately and no later than eight days after the receipt of complaint reply to the seller in writing or electronically as regards the received complaint.

Seller’s response to consumer’s complaint needs to contain a decision whether the complaint was accepted, statement on consumer’s request, particular proposal and deadline for resolution of complaint. The deadline may not exceed 15 days i.e. 30 days for technical appliances and furniture, from the day of complaint submission.

Request for elimination of nonconformity

If the delivered goods are not in conformity with the agreement, consumer shall have the right to request from the seller to eliminate the nonconformity without compensation, by repair or replacement. The right of choice is upon the consumer since he is to choose whether the goods would be replaced or sent to official service for repairing.

If the nonconformity cannot thus be eliminated, consumer shall be entitled to request appropriate discount or termination of agreement and refund. Therefore, consumer cannot immediately opt for termination of agreement and refund if nonconformity can be eliminated by replacement of repair.

Exceptionally, consumer may immediately opt between replacement, appropriate discount or termination of agreement:

  • If the same or another nonconformity occurs after the first repair; or
  • If nonconformity appears within six months after the day of transfer of risk to the consumer.

Legal remedies

In case of infringement of rights in the process of complaint resolution, consumer may institute consumer dispute against seller before a relevant court. This is a dispute subject to the rules from a special chapter in the law on civil procedure and which is not subject to court fees for complaint if the value of matter in dispute does not exceed RSD 500,000.00.

There is a possibility for extrajudicial resolution of consumer disputes through special bodies established in line with LCP 2014.

Consumers may also address market inspection that is authorised for submitting requests for institution of misdemeanour procedures for misdemeanours under LCP 2014. The prescribed fines vary from RSD 300,000 to RSD 2,000,000.00 (legal entity), from RSD 50,000.00 to RSD 150,000.00 (responsible person in the legal entity) and from RSD 500,000.00 (entrepreneur).

This article is to be considered as exclusively informative, with no intention to provide legal advice.
If you should need additional information, please contact us directly.

By Ivana Ruzicic, Managing Partner, PR Legal

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