On Thursday, the CJEU (in C-133/22) ruled on the precise meaning of "commercial guarantee" as defined by point 14 of Article 2 of the Consumer Rights Directive ("CRD").
The referring court (German Federal Court of Justice) specifically asked whether the provision must be interpreted as meaning that a "commercial guarantee" includes, as "any other requirements not related to conformity set out in the guarantee statement" (Art. 2), an undertaking made by the guarantor regarding "circumstances specific to the consumer, in particular his or her subjective attitude towards the item purchased (in this case, the consumer's personal satisfaction with the item purchased (...) without it being necessary that those personal circumstances relate to the condition or features of the item purchased" (ruling).
Consumers, reading this case, will be interested in this question: Can an intelligibly worded guarantee cover reasons for dissatisfaction with the product which are exclusively subjective and only concern how the consumer feels about the product?
Let's take a look at the facts of the case. LACD is a company which distributes sports and fitness products both via online merchants and retailers. On LACD products, consumers could find a tag defining a pretty wide "LACD Warranty". The tag stated:
"Every LACD product comes with our lifetime guarantee. If you are not completely satisfied with any of our products, please return it to the specialist dealer from whom you purchased it. Alternatively, you can return it to "LACD" directly but remember to tell us where and when you bought it."
BB Sport, a retailer of sport and fitness products, purchased two LACD t-shirts through a mystery shopper and upon reading the tag brought an action before the Regional Court of Munich seeking an injunction which would prohibit LACD form attaching those hangtags. BB Sport considered the tags not to meet the statutory requirements applicable to guarantee statements, as detailed under Article 443 and 479 of the BGB. The provisions establish that:
"the specific undertaking by the seller (...) set out in a statement (...) constitutes a guarantee in addition to the guarantee of conformity, the purpose of which is to reimburse the purchase price, to replace or repair the goods sold or to provide any other service in connection with those goods in they do not meet the specifications or any other requirements not related to conformity set out in that guarantee statement" (ruling). Such statement "must be worded in plain, intelligible terms" and must list "the elements which that statement must include" (ruling)
The first court dismissed the action, while the Higher Regional Court of Munich upheld the appeal. LACD brought an appeal before the Federal Court of justice, which referred to the CJEU with the question detailed above.
The CJEU first observed that nothing, in the way Article 2 of the CRD is worded, excludes from its scope of application a guarantor's undertaking regarding the consumer's subjective and personal satisfaction with the product purchased. "Any other requirements" is a wide expression, as observed by the AG, and there is no need for those requirements to refer to an "objective consideration related to the features or properties of those goods". This interpretation is consistent with the objective of the CRD, which is aimed at providing a high level of consumer protection by ensuring consumers have all the information necessary to make a decision before purchasing. Consumers purchasing from LACD will know that they are guaranteed a high level of protection, also as regards their very personal dissatisfaction with a product.
The Court observes that, after all, in making this undertaking LACD is only using its right to conduct business, established by Article 16 of the Charter of Fundamental Rights of the European Union.
Finally, the Judges rule that, because the statement provides guarantees related to the consumer's subjective satisfaction with the products, the failure to satisfy the expectation "cannot, by definition, be subject to objective verification" (ruling). A mere statement of the consumer must be considered sufficient.
This ruling can certainly be regarded as ensuring a high level of consumer protection, allowing at the same time traders to offer a very wide guarantee and thus conduct their business as they think is best. Clearly, the wording of the statement must comply with clarity requirements and always be worded intelligibly and plainly.
