Slovak Financial Law News 2004

Amendment to the Civil Code

Act No. 150/2004 Coll. amending and supplementing Act No. 40/1964 Coll., the Civil Code, as amended

This Amendment to the Civil Code (the ``Amendment'') introduces a new term ``a consumer contract'' into the Slovak Law System, it regulates this type of contract in general, and at the same time it stipulates a new legal regime of two special types of consumer contracts: (i) consumer contract on timesharing of immovable property (building) or its parts; and (ii) consumer purchase contract, known as contract on the purchase in business.

A consumer contract means a purchase contract, contract for work or other contract for a consideration regulated by Part 8 of the Civil Code, and the new contract on timesharing of immovable property or its parts, provided that contracting parties are the supplier and the consumer, who was not able individually influence the contents of the contractual proposal prepared by the supplier in advance.

The supplier means a person acting within its scope of business or other activities at the time of conclusion and performance of the consumer contract. The consumer means a person not acting within its scope of business activities at the time of conclusion and performance of the consumer contract.

According to this Amendment to the Civil Code the consumer contract shall not contain so-called ``unfair terms'', which are provisions inducing substantial inequality in rights and liabilities of contracting parties to disadvantage the consumer. This shall not be applied to subject or price of performance. The Amendment also provides for a list of unfair terms, for example the provisions entitling the supplier to transfer its contractual rights and liabilities to another supplier without a consent of the consumer if such a transfer leads to the adverse impact on enforceability or security of receivable of the consumer. The following terms are also deemed to be unfair (i) terms excluding or limiting supplier's responsibility for acting or non-acting in such cases that cause death or physical injury to the consumer, (ii) the provisions excluding or limiting the consumer's rights when claiming the liability for defects, or damages or the provisions, (iii) terms enabling the supplier to terminate the contract without providing any contractual or legal reason and not enabling the consumer to do so as well. The unfair terms are also the provisions entitling the supplier to amend unilaterally the provisions of the consumer contract without any contractual reason, etc.

The Amendment also introduced a rule of interpretation, that in the case of doubts of the content of the consumer contract, the construction in favour of the consumer shall apply. So-called unfair terms stipulated in the consumer contract are null and void by operation of law.

Special regulation relates to the consumer contract on timesharing of immovable property or its parts (the ``timesharing contract''). Under this contract, the supplier and the consumer agree to use a building or its part during one or more determined or determinable time periods in the year that cannot be shorter than a week. The building or its part means a construction designated for residence or accommodation. The timesharing contract shall be concluded for at least three years, and except for general requisites, it shall contain also special requisites listed in the Civil Code. This contract shall be concluded in writing. The timesharing contract shall contain detailed identification of the supplier, consumer, owner of the building in question or its part, subject of the contract, the amount of rent and costs as well as the instruction on the right to terminate the contract and information on possibilities and conditions of transfer or assignation of the right, resulting from the timesharing contract, to the third person, and other requisites.

If the timesharing contract does not contain obligatory requisites, and these are not supplemented within the period of three months after the conclusion of the timesharing contract, the consumer is entitled to withdraw from the contract. The consumer is also entitled to withdraw from the contract without stating any reason within ten days after the conclusion of the contract, after supplementing of the missing obligatory requisites or after the expiration of the three-month period from conclusion of the contract not containing the obligatory requisites. In addition, if the supplier or any third party provides a loan for financing of the price to the consumer, such a loan contract is automatically terminated in the case of termination of the timesharing contract by the customer and no penalties for such a termination can be applied.

If the consumer is a citizen of the Member State of the European Union, the timesharing contract shall meet specific requirements regarding the language of its execution. This provision is effective as of the date of the accession of the Slovak Republic to the European Union.

The Amendment also modifies the provisions on sale of the goods in business by introducing the consumer purchase contract subject to the regime of a general regulation of consumer purchase contract.

Pursuant to the Amendment, guarantee period shall be 24 months. If goods, their labelling or attached instructions for use contain the duration of usage period, the guarantee period shall not expire prior to the expiration of this period. In case of second-hand goods the consumer and the supplier may agree upon a shorter guarantee period, however not shorter than 12 months. Specific regulations stipulate guarantee period longer than 24 months for goods designated for long-term use. A single component may be subject to the guarantee period exceeding 24 months. Upon a request of the purchaser, the seller is obliged to provide the guarantee in writing (so-called guarantee certificate). A purchase bill may replace the guarantee certificate, if it is in compliance with the character of goods. In accordance with the Amendment the seller may provide the purchaser with a guarantee extending the guarantee period stated by law by the declaration in the guarantee certificate, or in the advertisement. The seller stipulates the terms and extent of this guarantee in the guarantee certificate.

If a defect may be repaired, the purchaser is entitled to have this defect repaired free of charge, properly and on time. The seller is obliged to repair the defect without undue delay. The purchaser may require exchange of the product instead of reparation, or exchange of a component thereof, provided it does not cause inadequate costs to the seller considering the price of the goods or the relevance of the defect. The seller is always entitled to exchange the defect goods instead of reparation of the defect provided that it does not cause serious difficulties to the purchaser.

The liability rights for highly defective goods must be claimed at latest on the day following the purchase; otherwise these rights shall cease to exist. As regards second-hand goods, the liability rights for defects shall expire, if these are not claimed within 24 months from the acceptance of the second-hand goods by the purchaser, or within a period agreed between the purchaser and the seller.

The Act shall implement the legal acts of the EC and EU into the Slovak law such as: (1) Council Directive 93/13/EEC on unfair terms in consumer contracts, (2) Directive 94/47/EC of the European Parliament and the Council on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis, and (3) Directive 1999/44/EC of the European Parliament and the Council on certain aspects of the sale of consumer goods and associated guarantees.

The Act came into force on 1 April 2004 except for Section 60, which entered into force as of the effective date of the Treaty on Accession of the Slovak Republic to the European Union.

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