These agreements usually involve small amounts. Every now and then we buy or sell things for higher amounts. For many people, the sale or purchase of a home will take the cake in terms of the purchase price. But significant purchase prices can also be involved when purchasing or selling a car or a horse; for top sport horses, sometimes considerably more than for an average home.
For many years now, the law has provided numerous guarantees when it comes to the purchase of real estate. For example, immovable property is described in a register. The size and ownership of the property can easily be determined to avoid misunderstandings as much as possible. Furthermore, delivery of immovable property is only possible through the intervention of a notary and the same applies to the establishment of a mortgage on immovable property.
The law does not provide such guarantees for movable property. It would also be very cumbersome to have to engage a notary for the delivery of a carton of milk and then have to register that carton of milk in a designated register. A number of guarantees have now been laid down by law for the purchase of movable property, mainly to protect the consumer.
One of these is the so-called consumer purchase. I will largely ignore in this article exactly what protection consumer purchases offer, but that protection is very broad for the consumer-buyer.
The law stipulates that consumer purchase is understood to mean: the purchase of a movable property concluded by a seller who acts in the context of his trade, business, craft or professional activity and a buyer, a natural person, who acts for purposes outside his business or professional activity.
It must therefore concern movable property, for example a washing machine, a car, or … a horse. The law then shows that the distinction between the capacity in which the seller acts and the capacity in which the buyer acts is of crucial importance. This means that everyone who concludes a purchase agreement must be very aware of the capacity of the other party. The legal provisions regarding consumer purchases are also mandatory law. This means that it cannot be deviated from, not in a contract, not in a side letter and not through sham constructions.
The European Directive, which has ensured that the provisions on consumer purchases have been included in our law, aims at a high degree of consumer protection, as a result of which judges assume that it is obvious that a broad definition of consumer purchases (and therefore of trading in the context of a professional, trade or business activity). In sham constructions and other attempts to evade consumer protection, the consumer has much more than the benefit of the doubt.
Not long ago I handled a case for a consumer buyer who had paid more than Euro 200,000 for a talented dressage horse with which she wanted to compete at a high level. The dressage horse quickly became lame and appeared to have an injury that must have existed before delivery. The horse was not suitable for dressage and did not comply with the purchase agreement. Consumer purchase was invoked on behalf of the consumer-buyer and the purchase agreement was terminated, requiring the seller to prove that the injury occurred after delivery. That proof could not be provided.
When examining the purchase contract, it was immediately noticed that it was not the owner of the trading stable where the horse had been tried out and who initially posed as the seller, but a stable employee of his who had just turned 18 and was listed as the seller on the purchase contract. Apparently, an attempt was made through a sham construction to turn the seller into a consumer, so that the provisions of consumer purchases would not apply and the consumer-buyer would therefore have to prove that the injury already existed before delivery.
It was completely unbelievable that this just 18-year-old stable employee was the owner of a dressage horse with a value of more than EUR 200,000 and that she had the capacity of a seller. Fortunately, it was quite easy to demonstrate that the owner of the dressage stable had posed as the owner of the dressage horse shortly before signing the purchase contract and that he had purchased the horse himself from the previous owner a year earlier.
Nevertheless, the consumer-buyer would have been wise to check the capacity of the seller. That applies to everyone and always. Know who you are doing business with; know who you’re dealing with! Check whether the seller is the owner of the thing sold. Additionally, make sure the seller is who he says he is. This of course also applies the other way around for the seller with regard to the status of the buyer. Is the buyer who pretends to be a consumer really one?
Wibe Reddingius is a lawyer and partner at Langelaar Klinkhamer Advocaten. He specializes in the areas of corporate law, contract law and (international) commercial law. In addition, Wibe is a specialist in the field of equestrian law and as such he is a lawyer for well-known riders, breeders, traders and equestrian trade organizations. Questions regarding this blog post? Contact Wibe by emailing email@example.com.