Should Price Reduction be Recognised as a Separate Contractual Remedy?

• Author: Piia Kalamees - Karin Sein
• Position: LL.M., Lecturer in Civil Law, University of Tartu -Docent of Civil Law, University of Tartu
• Pages: 52-60

52 JURIDICA INTERNATIONAL XX/2013

Piia Kalamees Karin Sein

Ph.D, Lecturer of Civil Law Docent of Civil Law

University of Tartu University of Tartu

Should Price Reduction be

Recognised as a Separate

Contractual Remedy?

1. Introduction

Price reduction as a remedy is found in many international instruments and in the legal tradition of diverse

countries. For example, it has been regulated in the German Civil Code*1 (BGB), the Dutch Civil Code*2

(BW), and the Estonian Law of Obligations Act*3 (LOA).

*4 In addition, price reduction belongs to the sys-

tem of remedies acknowledged in international and EU legislation and model regulations. For instance,

price reduction is provided for as a remedy in Directive 1999/44/EC of the European Parliament and of the

Council on certain aspects of the sale of consumer goods and associated guarantees*5 (i.e., the Consumer

Sales Directive), United Nations Convention on Contracts for the International Sale of Goods*6 (CISG), Pro-

posal for a Regulation of the European Parliament and of the Council on a Common European Sales Law*7

(CESL), and Draft Common Frame of Reference

*8 (DCFR).

Bearing in mind the recent developments in European contract law that are evident in, for example, the

Consumer Sales Directive, the CESL, and the DCFR, one f‌i nds price reduction as a remedy to be clearly a

topical issue. First of all, the question arises of whether providing for price reduction as a remedy is justif‌i ed,

since, for example, in the Anglo-American legal system it is believed that there is no need for price reduction

as a separate remedy—because a set-off between the claim for damages and claim for payment would pro-

duce a similar outcome.

*9 The position has been taken in Dutch law that the effects of price reduction can

1 Bürgerliches Gesetzbuch, Bürgerliches Gesetzbuch in der Fassung der Bekanntmachung vom 2. Januar 2002 (BGBl. I S. 42,

2909; 2003 I S. 738), das zuletzt durch Artikel 7 des Gesetzes vom 19. Oktober 2012 (BGBl. S. 2182) geändert worden ist.

2 Burgerlijk Wetboek, 1.1.1992.

3 Võlaõigusseadus. – RT I 2001, 81, 487; RT I 08.07.2011, 21 (in Estonian).

4 P. Varul et al. Võlaõigusseadus III. Kommenteeritud väljaanne [‘Law of Obligations Act III. Commented Edition’]. Tallinn:

Juura 2009, p. 370 (in Estonian).

5 Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of con-

sumer goods and associated guarantees. – OJ L 171, 7.7.1999, pp. 12–16.

6 RT II 1993, 21/22, 52.

7 Proposal for a Regulation of the European Parliament and of the Council on a Common European Sales Law, COM(2011) 635

f‌i nal. Available at http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2011:0635:FIN:EN:PDF (most recently

accessed on 10.4.2013).

8 C. von Bar, E. Clive (eds). Principles, Def‌i nitions and Model Rules of European Private Law: Draft Common Frame of

Reference (DCFR). Full Edition. Munich: Sellier 2009.

9 J. Basedow, K.J. Hopt, R. Zimmermann, A. Stier (eds). The Max Planck Encyclopedia of European Private Law. Oxford:

Oxford University Press 2012, p. 1314.