Case law

Consumer Sales and Guarantees Directive, Article 1, 2. Consumer Sales and Guarantees Directive, Article 3, 5.

This case concerned the question whether there was a B2C-sale or a P2P-sale, where the seller was a private person selling a sailboat to another private person. The seller was, however, also shareholder in a boatyard, where the boat was displayed. In case it would be regarded as a P2P-sale the Purchase act 1990 would apply (based on the CISG), otherwise the Consumer purchase act was applicable.
There was a question whether the contract could be terminated due to faulty delivery, whether
there would be a right of price reduction and whether the buyer was entitled to damages.
The Supreme Court found that this was a B2C-sale and that the buyer was entitled to price reduction.

The sailboat sold was of a well-known mark and the buyer alleged that he believed that the boat was manufactured in Sweden not in Poland. The question of place of manufacturing had not been discussed specifically between the parties. The seller had not informed but the buyer had not asked. The buyer in connection with delivery signed a document stating that he accepted the boat. The document also made it reasonably clear that the seller was the private person, not the yard.
The questions discussed concerned whether the buyer should have understood that the seller was a private person, whether manufacturing in Poland meant that the boat should have been cheaper and therefore the buyer entitled to terminate the contract, or demand price reduction or damages.

The purchase agreement was dated in March 1994 and the first instance rendered its decision in 1996. Based on a lot of evidence the court found that this was to be considered as a consumer transaction. Taking into consideration the evidence produced the court found that the delivery was faulty and that the buyer was entitled to price reduction which was determined as 10 % of the value.
The Court of Appeal largely reversed the decision in those parts which had been appealed. This was not a B2C transaction but rather a P2P sale, and thus the purchase act in stead of the consumer purchase act applied. There was no duty on the seller to inform specifically the buyer on where the boat had been manufactured.
In the Supreme Court a minority of 2 judges wished to uphold the court of appeal decisions, whereas the majority of 3 judges reversed the court of appeal decision and in stead followed the judgment of the first instance. The reasoning differed however, and the Supreme Court to start with explained that due to the circumstances the buyer had reason to believe that the seller was the yard. Therefore it was a consumer sale. In respect of the faulty nature of the goods the Supreme Court found that there was no obvious physical difference between a boat manufactured in Sweden and a boat manufactured in Poland. There was, however, a difference in the value between boats manufactured in the two different countries, and the buyer should in the particular situation be able to rely on the boat being manufactured in Sweden. The price reduction decided by the first instance was endorsed.
After a new act (2002:587) it is more clear that the seller in this case should be regarded as a commercial entity.

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