There are currently a record number of bills pending in the Slovak Parliament. While some are without a chance, others have one and are gradually "making their way" through the legislative process.

We also see a chance of success and adoption by Parliament with the new Consumer Protection Act. This is a government proposal, which the Parliament decided on 03.05.2023 to discuss it in the second reading and also assigned it to the relevant committees for discussion with deadlines until 09.06.2023 and 12.06.2023, respectively. The law could thus be approved at the June parliamentary session.

Although at the moment it is not clear whether it will be adopted (and signed by the President of the Slovak Republic) and possibly what will be its final approved wording, given the planned effective date – 01 August 2023 - and the significance of the changes it is supposed to introduce, we consider it necessary to inform our clients about these changes, as it will immediately affect their business and there will be a minimum of time left for the preparation of the implementation. This is the case even if the effective date is delayed. Due to the scope of the legislation presented (128 pages of paragraph wording and 90 pages of explanatory memorandum), this will be mainly basic and practical information, not an exhaustive overview (which will only make sense after the eventual publication of the new law in the Collection).  

As stated in the explanatory memorandum, "the act brings new general legislation in the field of consumer protection" and "is to redefine the general legal framework of consumer protection in the Slovak Republic", whereby, among others, there will be, in particular, a replacement of the current Act No. 250/2007 Coll., and Act No. 102/2014 Coll. (electronic sales), but also a significant amendment to the Civil Code, especially in relation to the liability for defects/warranties and the earranty procedure.

The sponsor of the new law - the Ministry of Economy of the Slovak Republic - described the most important changes in its following new release:

https://www.economy.gov.sk/top/schvaleny-novy-zakon-o-ochrane-spotrebitela

From the point of view of our clients - entrepreneurs and their activities, we would also like to draw your attention to the following, also practical, interesting (news):

1. Need to modify the designation of establishments (§ 4(1)(c) of the proposal)

According to the new regulation, the designation of the establishment will no longer include the name and surname of the person responsible for the operation of the establishment or the category and class of the accommodation establishment if it is an accommodation.

Particularly with regard to the GDPR and the protection of personal data against unauthorised processing (and in this case disclosure), it will therefore be necessary to remove the personal data of the responsible person from any such designation.

2. Instructions for use also in another language (Article 4(1)(g) of the proposal)

With the consumer's consent, he/she shall be allowed to be provided with information and documents in a language which he/she understands.

3. Reduction of the price of goods (§ 7 of the proposal)

When reducing the price of goods, it will also be mandatory to indicate the previous price of the goods, which is generally defined as the lowest price at which the seller sold or provided the goods in a period of not less than 30 days prior to the reduction in the price of the goods (if the goods have been sold for at least 30 days).

4. E-shops (§ 14 et seq. of the proposal)

Before concluding a “distance contract”, the trader will be obliged to inform the consumer on the one hand within the scope of the so-called general information obligations of the trader (§ 5 of the draft law), which apply to all traders, not only to e-shops. These obligations build on existing

obligations but also, in view of the change in legislation, introduce new formulations which may make it necessary to update the information currently provided, e.g:

• the existence and duration of the trader's legal liability for defects in the goods, digital content or digital service and the availability of a consumer guarantee, if the trader or the manufacturer provides one,
• the existence and duration of liability for defects in the service and the procedure for exercising rights under liability for defects in the service,
• the terms and conditions of after-sales service, if provided by the trader or the manufacturer
• an indication of the consumer's right to submit a request for redress to the trader pursuant to a specific provision, with a link to the website where information on the relevant alternative dispute resolution body is published

In § 15, the draft law provides for specific information obligations of the trader in the case of a distance contract (e-shops) and a contract concluded outside the trader's business premises, which follow the current regulation of § 3 of Act No. 102/2014 Coll., including the instruction on the consumer's right to withdraw from the contract, the conditions, time limit and procedure for exercising the right to withdraw from the contract; the trader shall also provide the consumer with a model withdrawal form according to Annex No. 2 (which is unchanged in content compared to the current regulation).

Withdrawal periods shall remain at 14 days, extended to 30 days only for contracts concluded on or in connection with an unsolicited visit or a sales event.

Overall, it can be concluded that e-shop operators, depending on the e-shop in question and the products sold, if any, and the rules currently in place, including the general terms and conditions, will need to audit the current state and identify which processes and documents will need to be updated and to what extent.

5. Sanctions  

Both in the draft law and in the amended legislation (e.g. the Advertising Act), there is an increase in the penalties, with the maximum amounts depending on the infringement to be governed by a certain % of the turnover of the entrepreneur (while maintaining certain upper limits) 

The powers of the supervisory authorities (Slovak Trade Inspection) will also be strengthened. 

6. Complaints procedure and liability for defects 

For the sake of simplification, after the new law comes into force, the regulation of liability for defects will be exclusively in the Civil Code, including the complaint procedure (until now Act No. 250/2007 Coll.). The draft law also deletes the need for expert assessments, and changes the deadlines for handling complaints (see below).

7. Manufacturer's warranty (§ 502 of the Civil Code)

The law is regulated in such a way that the warranty can also be provided by any third party, the so-called warranty provider (e.g. the manufacturer).  At the same time, new elements are introduced which the guarantee letter should comply with - the name and surname, business name or name of the guarantee provider, its registered office or place of business, the designation of the item covered by the guarantee, the conditions of the guarantee, and the procedure to be followed by the authorised person in order to obtain the performance of the guarantee.

In consumer purchase contracts, there is also a so-called consumer guarantee (Section 626 of the Civil Code), under which the manufacturer or seller may undertake to refund the purchase price to the buyer, to replace or repair the sold item or to ensure its maintenance beyond the scope of the rights arising from liability for defects. In the case of a consumer guarantee, a guarantee certificate shall be provided to the buyer on a durable medium at the latest at the time of delivery of the item in the Slovak language or, with the consumer's consent, in another language.

8. End of the maximum 30-day complaint period (§ 507 (1) of the Civil Code)

The seller shall remedy the defect within a reasonable time. A reasonable period of time means the shortest time the seller needs to assess the defect and to repair or replace the item, taking into account the nature of the item and the nature and severity of the defect (for consumer sales contracts, this is a new institute that replaces the statutory fixed 30-day period for processing a complaint under Section 18(4) of Act No. 250/2007 Coll.).

9. Rights from defects (§ 507 of the Civil Code)

Repairable defect - right to free removal (within a reasonable time)

Repairable defects - if due to the reappearance of the defect after the repair or due to a greater number of defects the object cannot be used properly - right of withdrawal

Irreparable defect that prevents the proper use of the thing - right of withdrawal

Irreparable defect that does not prevent the proper use of the item - right to a reasonable discount on the price.

The buyer shall also have the right to withdraw from the contract if the seller has expressly assured him that the object has certain characteristics, in particular those mentioned by the buyer, or that the object has no defects, and this assurance proves to be false

10. Consumer sales contract and liability for defects (§ 618 et seq. of the Civil Code)

The amendment to the Civil Code for consumer sales contracts terminates the existence of the 2-year guarantee in its current form. Under the new legislation:

• The seller will be liable for (any) defects that the sold goods have at the time of delivery and that become apparent within two years of delivery (i.e.  the seller will  be liable only for defects that the item has at the time of delivery, not, as before under the warranty, also for those defects that occur on the goods after the delivery within the warranty period).
• In the case of second-hand goods, a shorter period of the seller's liability for defects may be agreed, but not less than one year from the delivery of the goods.

If the defect manifests itself before the expiry of the above period, it is presumed that the defect was already present at the time of delivery (i.e. the burden of proof to the contrary will be on the seller). This does not apply if the contrary is proved or if this presumption is incompatible with the nature of the object or the defect.

Liability for defects - can only be exercised if the buyer has pointed out the defect within two months from the discovery of the defect, at the latest by the expiration of the aforementioned period of time.

The complaint may be made in person or by post. The seller shall provide the Buyer with a written confirmation of the defect and of the time limit within which the defect shall be rectified, immediately after the buyer's defect has been pointed out by the seller. If the seller refuses liability for defects, the reasons for the refusal shall be notified in writing to the buyer. However, according to the amendment, an expert assessment will no longer be necessary.

Buyer's rights:

• to remove the defect by repair or replacement - the seller shall repair or replace the item within a reasonable time after the buyer has pointed out the defect, free of charge, at his own expense and without causing serious inconvenience to the buyer, taking into account the nature of the item and the purpose for which the buyer has requested the item
• to a reasonable discount on the purchase price or the right to withdraw from the purchase contract if:

a)       the seller has not repaired or replaced the item,

b)      the seller has not repaired or replaced the item in accordance with his legal obligations

c)       the seller has refused to remedy the defect (if it is impossible or unreasonably expensive to remedy),

d)      the item has the same defect despite the repair or replacement of the item,

e)      the defect is of such a serious nature as to justify an immediate reduction in the purchase price or withdrawal from the contract of sale; or

f)       the seller has declared or it is apparent from the circumstances that he will not remedy the defect within a reasonable time or without causing serious inconvenience to the buyer.

In assessing the buyer's right to a discount on the purchase price or to withdraw from the purchase contract, all circumstances shall be taken into account, in particular the type and value of the item, the nature and severity of the defect and the possibility of objectively requiring the buyer to have confidence in the seller's ability to remedy the defect.

Of course, it will be necessary to familiarise oneself in detail with the whole new arrangement and the differences it brings. However, it can already be stated that, at least in the case of the operation of e-shops, in the case of guarantees (liability for defects) as well as in the case of complaint procedures, entrepreneurs will in any case have to adapt to the new legislation, more or less - depending on the current state of affairs. If and when it is adopted.