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Standard European sales contract to ease cross-border shopping - 14/10/2011

Two hands about to shake, with one coming out of a laptop screen © iStock/Brian Jackson

Common set of optional sales rules would ease cross-border trade and cut costs for companies while giving consumers greater choice and protection.

Over the last 20 years Europe’s integrated market has brought many benefits, from lower air-fares to lower mobile phone roaming costs. However, barriers to cross-border trade still remain – such as the differences between national sales laws across the EU.

Traders dissuaded by the complicated and costly process of dealing with these differences miss out on at least €26bn in sales every year.

The proposed European sales contract would remove this obstacle, easing cross-border trade and giving consumers greater choice, lower prices and the same high level of protection for their rights across all EU countries.

Customers receiving a defective product, for example, would have a choice of remedies. They could terminate the contract and get their money back, or get a replacement, repair or some money off.

These remedies would also be available to consumers who have downloaded (for a fee) music, films, software and other digital products from the internet.

At present, 44% of Europeans say they don't buy abroad because they're uncertain of their rights.

Encouraging trade

The new rules would not replace national laws – though countries can also choose to make them applicable nationally. They would just allow traders to offer an optional sales contract when selling in another EU country. The contract would apply only if a seller offers it and the consumer agrees.

Sellers offering the common sales contract would benefit from no longer having to deal with multiple national systems, so lowering their costs.

Currently, companies wishing to sell across borders in the EU may have to adapt to up to 26 different national contract laws, translate them and hire lawyers, costing an average €10 000 for each market. Adapting their websites can cost another €3 000 on average.

A survey shows 71% of European companies say they would use the single European contract for all sales to consumers in other EU countries – if it were available.

Next steps

The proposal now needs approval from EU countries and the European Parliament, which has already signalled its support in a vote earlier this year.

More on contract law

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