Movable Servitization – Contractual Liability in the B2C Relationship

Abstract

Business models based on servitization (a shift from selling goods to offering products as-a-service) are increasingly on the rise in B2C sectors. Examples of these so-called Product-Service Systems (‘PSS’) include subscriptions for household appliances, furniture, bicycles, printing solutions, etc. Although innovative business models based on servitization are often cited as important enablers of the circular economy a lot of legal challenges still remain. This contribution looks at the contractual liability regime for B2C use- oriented and result-oriented PSS contracts for movables. Here, we saw (a) that there is only a limited regulatory framework for services at the EU level, and there is no general set of rules for service contracts. The Unfair Contract Terms Directive plays the most important rol as this directive makes it possible to challenge unfair terms in the PSS contract; (b) also at the national level (Belgium, the Netherlands) there is only a limited (and often non-mandatory) regulatory framework. As a result, the PSS contract is the main source of the rights and obligations of the PSS parties. This contract is generally drawn up unilaterally by the PSS supplier using general terms and conditions. Therefore, using practical examples, we gave a brief overview of the content of a typical PSS contract available on the B2C market and looked at the legal consequences if one of the parties does not fulfil its obligations. We concluded with the observation that there is a need for a modern, more comprehensive framework for service contracts. This could further the development of servitization and PSS, which in turn can contribute to the transition to a sustainable and circular economy.

Keywords: Servitization, product service systems, PSS, contractual liability, circular economy, consumer law, contract law

JEL Classification: K12, Q01