Introduction

A consumer who has purchased a nonconforming (defective) product must report the lack of conformity to the seller within two months of discovery of the deficiency. See Article 7:23, Subsection 1 of the Dutch Civil Code (DCC); and the implementation of Article 5, Subsection 2 of the European Directive 1999/44/EG, which refers to the “detection” of the lack of conformity.

However, the moment of consumer discovery/detection of the lack of conformity was recently explored in a judgement (opinion in Dutch) by the Dutch Supreme Court (Hoge Raad) in the Netherlands, which ruled against the sellers.

Lack of Conformity

An object lacks conformity when it does not have the qualities a buyer can reasonably expect given the nature of the object (Article 7:17 DCC). The assessment of object conformity in consumer sales agreements includes statements made by the seller that could influence purchaser expectations (Article 7:18 DCC). Pursuant to Directive 1999/44/EG and Dutch consumer law, a consumer is defined as a natural person acting for purposes unrelated to his trade, business, or profession.

After reporting the lack of conformity to the seller (with reasonable speed after discovery), the buyer may demand that the seller: i) supplies what is missing, ii) repairs the supplied object, or iii) replaces the object. The seller is responsible for related costs. Alternatively, the consumer can rescind (ontbinden) the purchase agreement or reduce the price in proportion to the lack of conformity.

Case

The above-referenced Supreme Court case was decided on 15 February 2019 and concerned a horse that plaintiffs (consumers) bought from the defendant (seller) in February 2013. Before the purchase, the horse was inspected by a vet, who found it fit for use as a dressage horse. In April 2013, the horse started showing problems during training; the problems got progressively worse. A second examination at the end of August 2013 revealed that the horse had physical motor problems that had been present at the time of the purchase. Five months after the problem began to show, plaintiffs reported the lack of conformity to defendant.

The court of appeals in Arnhem-Leeuwarden found that five months was too long for plaintiffs to have waited to provide the notice of lack of conformity to defendants. The plaintiffs filed an appeal in cassation and argued that “discovery” did not occur when the problem first showed; they argued it only occurred once the defect was officially established by the vet, i.e., after the second examination.

The Advocate-General, advisor to the Supreme Court, concluded the appeal in cassation should be rejected, as the plaintiffs had to assume with a sufficient degree of probability (“voldoende mate van waarschijnlijkheid”) that the horse lacked conformity when the problem first began to show.

Supreme Court Judgement

The Supreme Court disagreed with the Advocate-General, holding that although the horse showed problems from April 2013 onwards, there was no reason to believe it lacked conformity. According to the Supreme Court, the clock started running on plaintiffs’ duty to report the lack of conformity to the seller at the moment the defect was established by the second examination, not when the horse began to show problems.

Relevance to Practice

Based on this decision, it could be argued that the consumer’s duty to report a lack of conformity to the seller starts from the moment the defect is established, and not when the purchased object is showing problems. However, based on case law involving non-consumers, the moment at which a purchased object begins showing problems still may be the starting point to provide notice to the seller.

This judgement strengthens the position of consumers. Companies selling products to consumers could face a longer time frame before consumers are required to issue notices of a lack of conformity, as the “discovery moment” pursuant to article 7:23 DCC, as well as the “detection moment” pursuant to Directive 1999/44/EG, will likely occur when lack of conformity is established, which might be later than when the lack of conformity first occurs. This is a fundamental consumer right that cannot be modified or limited by companies in contracts.