What changes have already been made to Czech law on product safety, product liability and sale of goods?
Product safety
A new Act on General Product Safety was enacted in 2001. This Act is the main source of product safety legislation in the Czech Republic and it introduces the main principles set forth by the first EU Directive on General Product Safety. The major provisions include:
- a definition of 'product' and 'producer'
- responsibility imposed on producers, importers and distributors to ensure that goods introduced on to the market are safe
- an obligation on producers, importers and distributors to provide relevant information to consumers
- a mechanism of supervision and control of compliance with the Act
- the possibility to impose fines in the case of a breach of the Act; and
- an outline of structures which will be used to identify dangerous products at external borders.
The Act on General Product Safety, just like the Directive, is general in its nature and does not contravene any existing rules on the safety of products within specific categories. Czech legislation has already introduced regulations concerning the safety of the following types of products:
- toys
- cosmetics
- clothes and shoes
- pharmaceuticals
- arms
- feedings and manures
- chemical substances
- ozone layer protection
- surgical devices; and
- personal protection tools.
Product liability
In 2000, the Czech Act on Product Liability was amended to make it compliant with the provisions of the EU Directive 85/374/EEC on Product Liability. This directive has been fully transposed with the exception of Article 7f) which stipulates that the manufacturer of a component shall not be liable if he proves that the defect is attributable to the design of the product in which the component has been fitted or to the instructions given by the manufacturer of the product. The Czech republic also decided not to include any provision concerning financial cap on liability as proposed by article 16 of the Directive.
The most notable provisions of the new act on product liability are the following:
- a definition of 'manufacturer', 'product' and 'defective product'
- a general principle whereby manufacturers shall be liable in the case of damage caused by a defective product
- the expiry of the entitlement to damages after ten years from the day the defective product was introduced on the market
- a requirement for compensation for damage with a lower threshold of CZK 5,000; and
- a provision whereby a manufacturer shall not be liable when the state of technical knowledge at the time when he put the product into circulation does not allow the existence of the defect to be discovered ("development risks" defence).
Sale of goods
The Czech Civil code has been amended in order to be fully compliant with EU legislation (Directive 1999/44/EC). Relevant amendments have also been made to the Consumer Protection Act.
The following major changes have been already made in this field:
- more precise definitions in line with the definitions set by the directive such as "conformity with the purchase contract"
- more detailed rules governing warranties (e.g. the minimum warranty period was extended to 2 years, a written and explicit warranty statement with a strictly defined content shall be inserted in all contracts, special time limits for raising claims under the warranty are set)
- new provisions regarding contracts relating to the purchase of the right to use real estate property on a timeshare basis ("timeshare contracts") have been implemented.
What changes to Czech law on product safety and product liability come into effect on accession?
Product safety
To ensure a higher level of protection for customers' health and safety at EU level, the general requirement to market safe products was reinforced with the adoption of a new EU Directive on General Product Safety on 3 December 2001.
For the Act on General Product Safety to fully comply with EU law, an amendment has been adopted to extend the range of products covered by the Act. These now include products that are not primarily intended for sale to the consumer, but can reasonably be expected to be used by consumers. An important issue is, in particular, the definition of product safety criteria and the sequence of its application. What is also important is a more precise definition of the rules for product designation and the introduction of an obligation to inform the consumer about the safe handling of products in the event of potential risk. Last but not least, the powers of the supervisory authority have been further defined and extended. Supervisory authorities may now order a manufacturer or distributor to accept an unsafe product back from a consumer. They may also restrict a product launch, order a product to be withdrawn or accepted back if they have proof that, despite compliance with the applicable regulations, the product is not safe.
Product liability
The law already contains a provision according to which, on the day of the Czech Republic's accession to the EU, the manufacturer shall compensate damage to a product for which he is liable with a lower threshold only in the amount of EUR 500, translated by the exchange rate of the foreign exchange market, as announced by the Czech national bank for the day on which the damage arose or was ascertained. Consequently the reference to the threshold of CZK 5,000 will disappear.
Sale of goods
Most of the provisions were already adopted and are effective. There are 2 exceptions in relation to timesharing contracts, which will come into effect on accession:
- the Czech Civil Code currently protects consumers where the shared real estate is situated in the territory of the Czech Republic. After accession, the same protection will be granted if the real estate is situated within the territory of the EU
- the consumer's right to choose the language when the timesharing contracts are concluded with a consumer from an EU member state will become effective on accession.
What can you do to ensure you comply with the new law and prepare for accession?
- check whether any products you sell are governed by specific safety regulations
- review your standard agreements with customers to make sure they are compliant with the law; and
- review the relationship with your customers and ensure they are properly informed.
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