Matthias E. Storme

1. Matthias E. Storme Goods, supply of digital content and provision of related services under (Draft) CESL

2. CESL can be used for (Art. 5 Reg.) 3 types of contract or a combination of them: sales contracts contracts for the supply of digital content related service contracts Not for contracts including other elements than those 3 Excluded in case of consumer credit incl. in the form of deferred payment

3. SALES CONTRACT = contract for the transfer of ownership of goods for a price (art. 2 k Reg.) GOODS = tangible movable items (2 h Reg.) Sale includes provision of (movable) goods to be manufactured ! Also if according to the buyer’s specifications ? Probably (under CISG and CRD 2011/83 covered)

4. DIGITAL CONTENT (defined in art. 2 j Reg.) = Data produced and supplied in digital form - whether or not according to buyer’s specifications • 6 exclusions (financial, legal, healthcare, e-communication, gambling, interacting with creation by users)

5. CONTRACTS FOR THE SUPPLY OF DIGITAL CONTENT • Whether or not supplied on a tangible medium • Whether or not in exchange for a price • But 2 requirements: 1° can be stored processed or accessed by the user 2° can be re-used by the user (Art. 5 b Reg.) Does not cover “streaming” (different from CRD 2011/83)

6. RELATED SERVICES CONTRACTS (2 n + 5 c Reg.) • Service related to goods or digital content • To be provided by the seller or supplier itself • Under the sales contract or a separate contract concluded at the same time • No separate price required • Not really an autonomous contract of services WHICH SERVICES ? (art. 2 n Reg.) - Related such as installation, maintenance, repair, processing • Not: Transport*, training, telecommunication support, financial. • Quid Hire-purchase, leasing ? * Excluded in case of related service, included in sale insofar as necessary for delivery ...

7. Structure of CESL in relation to the rights and obligations: Separate chapters and provisions for: Obligations seller or supplier of DC Obligations buyer of goods or DC Obligations Provider of related services (to goods or DC) (but incomplete) Obligations customer of related services (but incomplete)

8. Mixed contracts ? • “Distribution theory” in Art. 9 (1): separate rules apply to different parts of the contractual relationship (except that services contract is accessory in case of termination of sale, art. 147 II) • Service contracts under CESL are always mixed contracts (never autonomous) • Information requirements in MS law transposing Services Directive 2006/123 remain applicable (depends on classification as service or not in MS law ...)

9. Main specificities for DC in exchange for a price (1) • Art. 91 (obligations seller) : transfer ownership of goods > transfer tangible medium + ensure that buyer has right to use in accordance with the contract (CESL does not categorise the type of right the user has: treated as a sale even if rather a provision of service, but ownership only of tangible medium, rights to DC not specified) - No minimum rights of buyer of DC; no protection against disproportionate restrictions of right to use ? (see further)

10. Main specificities for DC in exchange for a price (1)(cont.) • Amsterdam study proposed (but not CESL): * explicit right to back-up copy * explicit right to private copies • No protection of right to transfer the DC / right to use

11. Main specificities for DC in exchange for a price (2) • Rules on conformity: in principle the same as goods, with a reservation in 103 (DC not considered as not conforming for the sole reason that updated DC has become available after the conclusion of the contract°) + specific rule in art. 105 (4) when duty to update. • Application of these rules in B2C contracts: • default rule in art. 100 (“qualities and performance capabilities the buyer may expect”) (but 13 (1) abd (20 (1) use “functionality”) • Agreements derogating are only possible where consumer knew of the specific condition of the DC and accepted it as being in conformity with the contract when concluding it (99(3)) • How does this apply to restrictions on use, restrictions on transfer ? ° after delivery would be more correct.

12. Main specificities for DC in exchange for a price (3): • Return of DC is not valid as restitution, monetary value must be paid (173 I) (to be calculated according to 173 (4): amount saved) (it follows that art. 174 on payment for use does only apply to goods) - Compare also restrictions to right to withdraw in art. 40 (3) (c) and (d)

13. Rules mentioning only “goods”: • Art. 10:4 Buyer’s knowledge of lack of conformity (in B2B) • Art. 121: duty to examine • Art. 122: notification requirement • Art. 148 (4) service to install goods (installation such that goods conform to the contract)

14. Main specificities for DC not in exchange for a price: • Art. 107: limitation of remedies of DC not in exchange for a price: only damages for loss or damage caused to the buyer’s property. • Art. 130 (early delivery and wrong quantity) does not apply • “ no restitution will be made” (174 (6)). (Will ??)

15. Main specificities for services (1): • Obligations spelled out separately • No separate rules on payment, sles rules apply w.a.a. • No rules on place and time of performance by service provider

16. Main specificities for services (2) – remedies • Basically the same remedies as in sales, but “with appropriate adaptations”. Not a good technique in an Optional Instrument with a limited coverage !! • Right to cure more widely granted (159 (2)) (excluded largely in consumer sales). But how does this right relate to termination by consumers ? • Consumer’s right to decline future performance (Art. 158) • Broken structure problematic, also because no definition of non-performance by service provider – Art. 147 does not solve this.

17. Scope of termination (not the clearest part !!) • Regulated in part in art. 9 (2-4), 117, 137, and by reference with “appropriate adaptations” in 155 and 157, , and also in art. 172 (3) .... • > problematic .....