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Changes to the Danish Sale of Goods Act: Guarantees

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Legal news
calendar 23 March 2022
globus Denmark

With the new updates to the Danish Sale of Goods Act, more companies must now get used to an increased responsibility towards consumers. In this newsletter, IUNO goes in depth with the new rules on guarantees - more specifically in relation to the rules on guarantees that companies give in advertising.

Many companies provide guarantees in connection with the sale of their products. Companies can, for example, provide guarantees in connection with advertising. With the latest update of the Danish Sale of Goods Act, new rules have been introduced for guarantees given in advertisements. The change means that guarantees in advertisements are binding to the person who gives the guarantee. This is also true even if another guarantee is given that does not favour the customer as much. For example, a guarantee in an advertisement may favour the consumer more than a guarantee given in connection with the sale of the product.

If a company issues a guarantee, the company will be directly responsible for remedying the defect or re-delivering the item if it does not live up to what the guarantee promises.

Liability to the guarantor

According to the new rules, information about a product in advertisements will be a guarantee if the advertisement was valid before or at the time the item was purchased. This means that if, for example, an advertisement states that the product has a shelf life of three years, the person who issued the guarantee will be responsible for refunding the purchase price, re-delivering, repairing, or otherwise remedying if the product's shelf life is shorter than three years.

When several guarantees have been given

If several guarantees have been given, the guarantee that provides the best terms for the consumer applies. If, for example, an advertisement states that a special can of tuna can last unopened for 20 years, while it appears on the can that the tuna can only last unopened for 10 years, it will be the 20 years that apply. However, if the advertisement is changed to 10 years before the sale, it will be the 10 years that apply.

These rules apply both to guarantees that describe the durability of the product, and to guarantees that describe the condition of the product or the properties of the product.

Guarantee or claim

It is important to note that not all product descriptions are a guarantee. For example, writing: "Denmark's best piggy bank" will not be a guarantee, but instead a claim that does not entail liability. However, it is a slippery slope and the more specific a description is, the more likely it is that there is a guarantee.

Read more about the changes in the Danish Sale of Goods Act

This newsletter is part of a series of newsletters explaining the changes made to the Danish Sale of Goods Act. If you would like a general overview of the changes, you can find it here. In the coming weeks, we will be publishing more newsletters that go in depth with the other updates.

IUNO’s opinion

The changes in the rules on guarantees lead to an extension of the responsibility of producers and sellers towards consumers. It can have unwanted consequences if a company guarantees something in an advertisement that the product cannot live up to. IUNO therefore believes that companies should make sure that their advertisements do not contain descriptions of their product that it cannot live up to.

The line between a guarantee and a claim can be difficult to distinguish, but the legal consequences can be great. If you are in doubt as to whether your company’s advertisements contain guarantees, IUNO recommends that you seek legal advice.

[Notice on the Danish Sale of Goods Act of 24 September 2021]

Many companies provide guarantees in connection with the sale of their products. Companies can, for example, provide guarantees in connection with advertising. With the latest update of the Danish Sale of Goods Act, new rules have been introduced for guarantees given in advertisements. The change means that guarantees in advertisements are binding to the person who gives the guarantee. This is also true even if another guarantee is given that does not favour the customer as much. For example, a guarantee in an advertisement may favour the consumer more than a guarantee given in connection with the sale of the product.

If a company issues a guarantee, the company will be directly responsible for remedying the defect or re-delivering the item if it does not live up to what the guarantee promises.

Liability to the guarantor

According to the new rules, information about a product in advertisements will be a guarantee if the advertisement was valid before or at the time the item was purchased. This means that if, for example, an advertisement states that the product has a shelf life of three years, the person who issued the guarantee will be responsible for refunding the purchase price, re-delivering, repairing, or otherwise remedying if the product's shelf life is shorter than three years.

When several guarantees have been given

If several guarantees have been given, the guarantee that provides the best terms for the consumer applies. If, for example, an advertisement states that a special can of tuna can last unopened for 20 years, while it appears on the can that the tuna can only last unopened for 10 years, it will be the 20 years that apply. However, if the advertisement is changed to 10 years before the sale, it will be the 10 years that apply.

These rules apply both to guarantees that describe the durability of the product, and to guarantees that describe the condition of the product or the properties of the product.

Guarantee or claim

It is important to note that not all product descriptions are a guarantee. For example, writing: "Denmark's best piggy bank" will not be a guarantee, but instead a claim that does not entail liability. However, it is a slippery slope and the more specific a description is, the more likely it is that there is a guarantee.

Read more about the changes in the Danish Sale of Goods Act

This newsletter is part of a series of newsletters explaining the changes made to the Danish Sale of Goods Act. If you would like a general overview of the changes, you can find it here. In the coming weeks, we will be publishing more newsletters that go in depth with the other updates.

IUNO’s opinion

The changes in the rules on guarantees lead to an extension of the responsibility of producers and sellers towards consumers. It can have unwanted consequences if a company guarantees something in an advertisement that the product cannot live up to. IUNO therefore believes that companies should make sure that their advertisements do not contain descriptions of their product that it cannot live up to.

The line between a guarantee and a claim can be difficult to distinguish, but the legal consequences can be great. If you are in doubt as to whether your company’s advertisements contain guarantees, IUNO recommends that you seek legal advice.

[Notice on the Danish Sale of Goods Act of 24 September 2021]

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Aage

Krogh

Partner

Matilde

Grønlund Jakobsen

Associate

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