Consumer rights in case of defective products
Despite utmost care everyone may buy a product that later proves to be defective or which is not in conformity with the consumer contract. In most cases the items are not too expensive, they cost just few thousand forints, and many of us would be reluctant if it turns out we should go to court. However, we would not like to loose the money we paid for these articles either.
This set of useful advice compiled by the European Consumer Centre can help consumers to find information about where to go with their complaint when a product becomes defective, and which rights they are entitled to.
What does defective performance mean?
Performance is defective if it does not comply with the requirements set by law or the consumer contract. The incorrect installation shall also be considered defective performance if the installation is also part of the contract, and if the installation was carried out by the obligor or a third person whose conduct is under the responsibility of the obligor (the employee of the seller, agent on the spot assigned to perform the installation). The obligor is also responsible when the installation was made by the buyer in accordance with the contract, and the incorrect installation is due to the shortcomings of the installation instructions. The contract terms in consumer contracts deviating from these conditions to the detriment of the consumer are null and void.
Who should I contact if I have a quality complaint in relation to a purchased product?
It is important to point out that when a consumer buys a product he/she enters into a contractual relationship with the seller of the product. Therefore whenever any defect of the product is revealed you shall contact the seller (go to the shop) where the product concerned was bought.
It may – unfortunately - occur many times that the consumer is informed by the seller that he/she shall go to the service or the manufacturer. It must be, however, underlined that it is not mandatory for the consumer to accept it, as it is always the seller selling the product to the consumer who is obliged to guarantee responsibilities in connection with the product.
What does guarantee and warranty mean?
The obligor (seller) shall be liable for the defective performance, this is called guarantee. So, when a purchased product is defective or the lack of conformity appears later during the use of the product, in line with the common ruling of the EU applicable in all Member States – Directive 1999/44/EC – the consumer can assert his/her guarantee rights within two years after handing over the product to him/her. In Hungary the Civil Code includes the guarantee provisions.
In addition to the guarantee based on EU legislation there is a specific piece of legislation (Government Decree No. 151/2003) in Hungary regulating the mandatory warranty scheme that shall be provided to a specified circle of new durable consumer goods. It is the seller who shall fulfil warranty obligations. The trader/seller shall hand over a warranty sheet to the consumer upon purchasing such a product. The duration of warranty is one year. It should be highlighted that this mandatory warranty covers only the new and durable consumer products bought in the territory of Hungary, consequently, in case of shortcomings of a product purchased abroad the consumer cannot refer to consumer rights deriving from mandatory warranty.
If mandatory warranty is valid for a product both the mandatory warranty rights and the common rules of guarantee right can be simultaneously asserted.
What are my guarantee rights?
In case of defective performance the following four claims can be asserted against the seller:
- In the first place we can require repair or replacement, as a general rule it is the consumer who chooses which option he/she wants, unless the chosen option is impossible (e.g. the product is sold out and not available any more) or involves disproportionate additional costs for the seller compared to other guarantee option (e.g. in case of an expensive article due to the defect of a spare-part of some thousand forints the replacement of the entire product is not justified), taking into account the value of the product that would have if there were no lack of conformity, the significance of the lack of conformity and the inconvenience caused to the consumer by the fulfilment of guarantee rights.
- If based on the above facts the consumer is entitled neither to repair nor replacement, or the seller has not completed the repair or replacement, or the seller has not completed this obligation within reasonable time respecting the intended purpose and nature of the product and without causing significant inconveniences to the consumer, then the consumer may choose an appropriate reduction of price or have the contract rescinded (he/she may ask for the reimbursement of the purchase price). It is good to know that consumer is not entitled to have the contract rescinded if the lack of conformity is minor.
What are my rights, if the product is covered by mandatory warranty scheme and goes wrong?
If the purchased product is covered by the one-year mandatory warranty scheme established by the national government decree, and it becomes defective, the consumer can assert the same rights as ensured by the legal guarantee included in the Civil Code. So we can require repair, replacement or reduction of price or rescission of the contract, in the order specified in the previous section (under Point 4).
What is the difference between guarantee and warranty?
In the course of asserting guarantee rights – opposite to the mandatory warranty ensured by the government decree – it is the consumer who shall prove that the non-conformity was already present at the time of the purchase, so the costs related to the proving procedure shall be born by the consumer. However, it must be pointed out that the Directive 1999/44/EC lays down a minimum requirement in all EU Member States, accordingly the defects revealed within 6 months after purchase are presumed to be present at the time of the purchase in hidden form.
In contrast to the above, the mandatory warranty scheme is more favourable for consumers, as during its whole duration (1 year) the burden of proof shall be born by the seller, namely, the seller will be released from this obligation if he/she can prove that the cause of the defect occurred after the performance. Please note that the mandatory warranty scheme is only valid for the durable goods listed in the annex to the government decree.
How long can we assert our guarantee rights?
The law lays down that based on the cooperation obligation we have to communicate the defect to the obligor at the earliest opportunity. In case of consumer contract if the lack of conformity is communicated not later than 2 months after the reveal of the defect it shall be regarded as communicated in due time.
Guarantee claims can be enforced within a 2-year limitation period after the performance (acceptance of the goods). When it comes to second-hand goods we can agree upon a shorter period with the seller, but the duration has to be at least one year.
If we cannot enforce the claim due to justifiable reason (e.g. in case of longer stay abroad or permanent disease), or if the nature of the product or the defect could not become apparent within 2 years, the enforcement deadline of claims for durable goods will be then 3 years. We, however, must bear in mind that after the first 6 months it is the responsibility of the consumer to prove that the lack of conformity was already present at the time of purchase.
Claims under the mandatory warranty scheme can be enforced for one year after the purchase.
What can I do if the product goes wrong within 3 days?
In relation to the products covered by the mandatory scheme and listed in the Annex to the Government Decree 151/2003 the consumer can ask for replacement within 3 working days (Saturday and Sunday are holidays even if the trader’s shop is open) when the lack of conformity makes the normal use impossible. We should know that in case of other product the replacement guarantee is not applicable.
When asserting guarantee rights are we obliged to accept the seller’s offer for choosing another product instead of receiving the refund of the purchase price?
No, not at all. The relevant legislation does not include any provisions concerning the purchase of other goods in the shop to the value of the defective product. However, if this option offered by the seller is favourable it is recommended to accept it in order to avoid further debates.
What does contractual warranty mean?
The contractual warranty is based on the agreement of the parties, i.e. in the course of selling a product it is not the law that obliges the seller for providing warranty, but it is performed voluntarily. The content elements of the mandatory warranty are determined by legislation, while in case of contractual warranty the parties jointly agree upon its terms, and it is laid down in a contract. The contractual warranty does not exclude the mandatory warranty. For instance if the legislation provides one-year (mandatory) warranty for a product (washing machine), the seller may decide that in addition to the mandatory one year he will guarantee the faultless status of the appliance for a further period. The content and terms of the warranty offered beyond one year may defined by the seller.
This type of contractual warranty may even be partial. E.g. when the seller takes up repair service but does not ensure replacement.
What can we do if the product goes wrong?
We should go back to the shop where we bought the product and ask for taking records of the quality complaint.
The seller has to draw up minutes about the consumer’s objection, where the following data shall be recorded:
- name and address of the consumer;
- name and purchase price of the product;
- date of purchase;
- description of the problem;
- claim of the consumer;
- offered solution to settle the complaint.
If the offered solution for settling the complaint differs from the consumer’s claim, the reasons shall be recorded in the minutes. A copy of the minutes shall be handed over to the consumer.
If the seller cannot make a statement about the fulfilment of the claim, he may make that statement within 3 working days and shall inform the consumer.
Is there any deadline of repair or replacement?
In accordance with the Civil Code repair or replacement – taking into account the nature and the expectable use – shall be performed within appropriate time limit without significant inconveniences for the consumer. In addition to the Civil Code the Decree No. 49/2003/GKM on the handling of guarantee and mandatory warranty claims in consumer contracts lays down that the seller shall endeavour to complete the repair or replacement within maximum 15 days. However, the appropriate time limit of repair is not specified by the Civil Code. Based only on the specific circumstances of the case concerned can be declared that the seller has had the repair done within appropriate time. The possible duration of repair can be significantly affected by such factors that cannot be influenced by the seller. These factors can derive from the features of the product or the nature of the defect, but it may also occur that a special spare-part is needed that can only be delivered by the manufacturer with a delay.
May the consumer perform the repair himself?
If the seller does not undertake or complete the repair, the consumer can perform the repair himself or have the repair done at the expense of the seller.
Is it compulsory for the seller to provide a substitute appliance?
No, not at all. The Hungarian legislation does not include any provision that would oblige the service to provide a substitute appliance for the period of repair. Apart from this more companies upon business considerations offer substitute appliances for consumers.
May the seller restrict guarantee rights in the contract?
No, not at all. Any term of the consumer contract that deviates from the order of guarantee rights set by law to the detriment of consumer is null and void.
What costs are charged to the consumer in the course of enforcing complaints?
All costs related to the accomplishment of guarantee obligations and bringing the goods into conformity with the contract – including particularly the cost of postage, labour and materials – shall be born by the obligor (seller, trader). It is illegal if the trader undertakes the repair or replacement for paying a so-called administration fee, or requires payment in consideration of exercising right of withdrawal. It may occur that the consumer shall pay certain costs (e.g. of return) in advance. If afterwards it has been proved that the quality complaint is justified, the seller shall reimburse these costs to the consumer.
Can the seller be relieved from liability concerning the defective performance?
The seller is relieved from the guarantee liability if the buyer concluded the contract (bought the product) in spite of the fact that he knew or was aware of the defect of the product, or had to know it (as he had been informed about it, or the non-conformity was apparent). However, the seller is relieved from liability in relation to the defect known by the buyer.
The seller is also relieved from the liability if the lack of conformity has its origin in materials supplied by the consumer, and the seller warned the buyer about the non-conformity of the materials. E. g. the tailor stated that the supplied textile was not suitable for training-suit, but the buyer resisted on the order.
May the seller limit the liability in case of goods offered on sale or at discounted price?
No, not at all. Based on the relevant legislation quality complaint can be submitted in relation to the part of the product offered at discounted price which was not defective or was defective, but the buyer was not aware or could not be aware of it.
If the seller does not indicate the reason of discount and has not provided information about it, - as the burden of proof lies with the seller related to the information he gave to the consumer about the non-conformity – the consumer may claim for the non-conformity of the whole product.
If a new appliance is provided for any reason as a replacement of a defective product, will the guarantee period restart?
The deadline of enforceability of guarantee rights restarts if the product or its essential part has been replaced (repaired) for the product or the part that has been replaced (repaired), and also for the defect that has been occurred due to the repair.
In such cases the one-year mandatory warranty period, and the two-year (3-year if applicable) legal guarantee period for exercising guarantee rights restarts from the day of the receipt of the new product in respect of the whole product.
Are we entitled to exercise mandatory warranty and legal guarantee rights if buying goods online, similarly as if we purchase in shop?
Yes, we are. In this respect there is no difference between goods purchased in traditional premises or virtual shop (webshop).
What is the “international guarantee”?
When the consumer purchases a product abroad the relevant law of the country concerned and the terms specified by the seller at the purchase will be applicable. It may occur that the manufacturer undertakes a guarantee based on which the consumer may contact any unit of the service network, irrespectively of the country where the product was purchased (so-called international guarantee).
Which body can consumers contact if any quality claim, guarantee complaint arises related to cross-border purchase or goods bought abroad, and the foreign seller has a seat in any EU Member State or Norway or Iceland?
In such cases - if the company does not respond to the claim or we do not agree with the response it is advised to ask for the free, informal, professional-legal help of the European Consumer Centre in order to make an attempt to reach an agreement with the enterprise concerned, and thus avoid potentially long-lasting cross-border litigation. The European Consumer Centre cannot provide substantial help in disputes if the company is registered outside the EU, Norway or Iceland.