On 29 September 2022, the National Assembly of the Republic of Slovenia adopted a new Consumer Protection Act (“ZVPot-1” and the “Act“), which implemented three European directives in the field of consumer protection into the national legislation.
In addition to the implementation of the directives, the ZVPot-1 incorporates the content of the previously applicable Consumer Protection Act (“ZVPot“) and the Consumer Protection against Unfair Commercial Practices Act (“ZVPNPP”), which shall cease to be in force upon the entry into force of the ZVPot-1.
The Act entered into force on 26 January 2023, and in this article, we present some of the main changes and novelties introduced by the Act.
- Definition of unfair contract terms
A company must not impose contract terms that are unfair to the consumer. Such terms are prohibited and cannot be relied on by the seller.
The ZVPot-1 maintains the definition of unfair contract terms, whereby contract terms are considered unfair if, to the detriment of the consumer, they result in a significant imbalance in the contractual rights and obligations of the parties, or if the performance of the contract is unreasonably prejudicial to the consumer, or if the performance is substantially different from what the consumer reasonably expected, or if they are contrary to the principle of fairness and good faith.
The assessment of the unfairness (unconscionability) of a contractual term in relation to the main subject matter of the contract has so far only been carried out if it was written in an unclear and incomprehensible manner. Otherwise, it would be considered to be an excessive interference with the autonomy of the contracting parties.
The ZVPot-1 now explicitly provides that the unfairness of contractual terms, even if they are written in clear and comprehensible manner, may also be assessed in relation to the definition of the main subject-matter of the contract and the adequacy between the price and the payment for the service, goods or digital content exchanged.
- New rules on the enforcement of material defects – non-conformity of goods with the contract
Under the ZVPot-1, the seller is responsible for any defect of the goods which exists at the time of delivery of the goods and which becomes apparent within the warranty period, i.e. two years from delivery of the goods, with the presumption that the defect already existed at the time of delivery being extended from six months to one year from the date of delivery of the goods. This means that if a defect in the goods becomes apparent within one year of delivery, the seller bears the burden of proving that it did not exist at the time of delivery.
Consumers may exercise their rights resulting from a material defect on the condition that they notify the seller of the defect within two months of the discovery of the defect.
An important novelty introduced by the ZVPot-1 is the order of consumer warranty claims. In the event of non-conformity of the goods, the consumer is entitled to make warranty claims in a certain order, namely he can first claim from the seller to restore the conformity of the goods free of charge, either by repairing them or by replacing them with new goods. The seller must remedy the defect within a reasonable period of time, which may not exceed 30 days from the date of notification of the defect. However, if the goods are not brought into conformity in this way, the consumer has the right to request a reduction in the purchase price in proportion to the lack of conformity or to withdraw from the contract of sale and request a refund of the amount paid.
The new Act also introduces a right of rejection, which means that, despite the hierarchy of claims, the consumer has the right to withdraw from the contract if defect of the goods occurs within 30 days of delivery of the goods, without first having to request repair or replacement of the goods.
The seller’s right of recourse has also been newly set out in the ZVPot-1. A seller who will meet a consumer’s warranty claim due to non-compliance resulting from an act or omission, including a failure to provide updates for goods with digital elements, by an upstream undertaking, is entitled to recourse against the upstream undertaking, which means that it can recover the value of the consumer’s asserted warranty claim.
The ZVPot-1 introduces a change regarding the warranty period on the conformity of used goods, whereby the warranty period will be subject to a contractual agreement. The seller and the consumer will be able to agree on a warranty period of less than two years, but not less than one year. In the absence of an express agreement, used goods will also be subject to a two-year warranty period instead of the one-year warranty period provided for in the ZVPot.
- New developments on the statutory guarantee
An important amendment introduced by the Act is that the consumer will only be able to claim a guarantee from the manufacturer (the guarantor) and no longer also from the seller, as was the case under the ZVPot.
The Act maintains the provision that the guarantee of perfect working order must be given for a minimum period of one year, while the one-month guarantee for used goods is no longer required.
The time limit for remedying defects in the case of a guarantee is also reduced from the current 45 days to 30 days from the date on which the manufacturer or the consumer’s authorised repairer receives the request to repair the defect, with the possibility of an extension of an additional 15 days.
- Contracts for the supply of digital content or a digital service
The Act introduces new rules for a contract for the supply of digital content or a digital service, whereby a company undertakes to supply digital content or a digital service to a consumer and the consumer undertakes to pay the company a purchase price.
In addition to that contract, the chapter on the contract for the supply of digital content or a digital service also applies to cases where the digital content or digital service is supplied in such a way that the consumer does not pay the purchase price but provides personal data to the company. An example of such a contract is where the consumer creates a social media account and provides a name and an email address, which are used for purposes other than the supply of the digital content or digital service or to comply with legal requirements.
A company that supplies digital content or a digital service to a consumer after the conclusion of a contract for the supply of digital content or a digital service now warrants the compliance of the digital content to consumers, and the Act also provides for an obligation for the company to provide the consumer with necessary updates to the digital content or service.
The consumer thus has a range of warranty claims for non-compliance of the digital content or service with the contract, namely restoration of compliance, a proportionate reduction of the purchase price or withdrawal from the contract and a full refund of the purchase price.
There is also a right of recourse for the seller when he fulfils a consumer’s warranty claim for non-compliance resulting from an act or omission of the upstream undertaking. In such a case, the undertaking will be entitled to pursue its right of recourse against the upstream undertaking in the contractual chain.
- New obligations for online marketplaces
The Act also introduces new obligations for online marketplace providers. This is a service using software, including a website, part of a website or an application, operated by or on behalf of a business, which enables consumers to conclude distance contracts with other companies or consumers.
Before a consumer undertakes a distance contract or any other similar offer on an online marketplace, the online marketplace provider is now required to provide the consumer, in a clear and comprehensible manner and in a manner adapted to the means of distance communication, with information on the main parameters determining the ranking of the offers presented to the consumer as a result of a search query, on the relative importance of those parameters in relation to other parameters and an indication of whether or not the third party with which the consumer concludes the contract is a company. If the counterparty to the contractual relationship is not a company, the consumer does not benefit from the protection of the ZVPot-1. The consumer must also be given prior notice of this fact.
- Other novelties
As part of misleading commercial practices, the ZVPot-1 also now defines and prohibits any marketing of goods in one Member State as identical to goods marketed in other Member States, where those goods have substantially different composition or characteristics, unless justified by legitimate and objective factors, i.e. the so-called prohibition of dual quality of goods.
Where a company provides access to product reviews given by consumers, it must now ensure that the published reviews are given by consumers who have actually used or purchased the product. The Act now prohibits the providing of a false consumer review or recommendation, the solicitation of such a review or recommendation from other entities, as well as the misrepresentation of such a review or recommendation for the purpose of product promotion.
Company can adapt prices in distance and off-premises contracts to specific consumers or categories of consumers on the basis of automated decision-making and consumer behaviour profiling, which allows sellers to assess consumers’ purchasing power. The new Act imposes an obligation on companies to provide information to the consumer that the price has been adjusted on the basis of automated decision-making.
Since the ZVPot-1 did not enter into force until 26 January 2023, it is worth recalling that the provisions of the previous ZVPot will apply to all sales contracts concluded by consumers before 26 January 2023, even after that date.