Termination and cure under the Common European Sales Law: Consumer protection misunderstood

This article forms part of a special edition of the Common Market Law Review.

Publishers Abstract:
In many areas, the Common European Sales Law follows the paths trodden by the existing directives on European contract law or the Principles of European Contract Law. This is also true for the scheme of remedies in case of defective performance by the seller. However, the CESL diverges from the solutions offered by the current Directive on consumer sales and guarantees in important respects. One concerns the right to damages, discussed elsewhere, the other the right of the consumer to terminate the contract without allowing the seller to cure the defect.

In this paper, it is argued that a right to immediate termination imposes substantial costs on the seller that will be passed on to consumers through increased prices. Contrary to the intentions of the framers, this outcome does not benefit consumers at all, but leads to cross-subsidization of savvy consumers, who are willing and able to force the costly remedy of rescission onto sellers, by the majority of consumers who are less vigilant in enforcing their legal rights.