In June 2021, the Government adopted a new consumer protection decree under number 373/2021 (VI. 30.). The main rules of the legislation, which also takes into account the relevant European Union directives, entered into force on 1 January 2022, while the provisions amending the mandatory warranty rules for new durable consumer goods had already entered into force on 1 July 2021. The decree affects entrepreneurs and businesses, primarily retailers and manufacturers. Its scope also covers contracts for the supply of digital content and digital services.
1. What options will consumers have in the future in the event of defective performance?
Alongside the introduction of the new legal basis, Government Decree 45/2014 (II. 26.) on the detailed rules of contracts between consumers and businesses will, of course, continue to apply. From 1 January, in the event of defective performance, consumers may turn directly to the business in order to enforce a voluntarily provided warranty, requesting repair or replacement of the product. Another consumer-friendly innovation is that, until proven otherwise, any defect detected within one year from the date of delivery of the goods must be presumed to have already existed at the time of delivery. The only exceptions are cases where this presumption is incompatible with the nature of the goods or the nature of the defect. During this one-year period, the burden of proof regarding the defect lies with the business in the case of both voluntary and mandatory warranties, meaning that this rule applies to all products regardless of whether they are otherwise subject to a statutory warranty. Accordingly, while consumers must prove product liability claims brought against the manufacturer, in the case of defective performance arising during the period of the manufacturer’s warranty, the burden of proof lies with the manufacturer. Voluntary warranties, however, should not be confused with mandatory warranties, which are imposed on seller businesses depending on the sale price of durable consumer goods. If the consumer identifies and reports a defect, the business may refuse to fulfil its warranty obligation and may be released from liability under the warranty only if it proves that the defect arose from a cause occurring after performance.
2. Changes to statutory warranty rights
As regards the relationship between statutory warranty remedies, the government decree introduces rules supplementing the Civil Code. Under the new rules, from 1 January 2022 consumers will be entitled to request a price reduction or terminate the contract if the business has not repaired or replaced the product, has refused to do so, or has breached its obligation to bear the costs relating to taking back the goods. The same applies where a defect in performance occurs repeatedly, despite the business having previously attempted to bring the goods into conformity with the contract. Finally, consumers may also request a price reduction or exercise the right to terminate the contract if the defect in performance is so serious that it justifies an immediate price reduction or immediate termination of the sale, or if the business does not undertake to bring the goods into conformity with the contract, or it is clear that it cannot do so within a reasonable time or without causing significant inconvenience to the consumer. If the consumer exercises the right to terminate the contract, the business must, on the one hand, reimburse the costs incurred in returning the goods and, on the other hand, refund the purchase price of the product.
3. What next for voluntary warranties?
Businesses that, in addition to statutory and product liability rights, provide a manufacturer’s warranty for the durability of their products must make a warranty statement available to consumers with the content prescribed by the decree, in clearly understandable wording and in Hungarian. This statement should not be confused with the warranty certificate that the seller must issue to the consumer in the case of a mandatory warranty. The decree gives a clear definition of product durability: it means the ability of the product to retain the required functions and performance under normal use. Under the decree, the warranty statement must include the name and address of the person obliged under the warranty, the goods covered by the warranty, the procedure to be followed in order to enforce the warranty, the conditions of the warranty, and, in addition, information that the warranty does not affect the consumer’s statutory warranty rights.
Zusammenfassung
Examining the new regulation, it is clear that this already not particularly transparent area of law is becoming even more differentiated. Therefore, in navigating the maze of the provisions currently in force and the new rules entering into force, it is advisable to seek the assistance of a legal representative. If you believe that legal assistance may be useful either from a business or consumer perspective, please feel free to contact our law firm.
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