4.5.3 More EU rules on multiple-element transactions

As demonstrated above, when determining whether (all elements of) a (multiple-element) transaction is (are) made for consideration, the agreement or contractual structure is leading unless the contract is not in line with economic or commercial reality.1

This view is supported by the interpretation of an EU Directive on certain aspects of the sale of consumer goods and associated guarantees.2 Because the matter is not explicitly regulated by this directive, I asked the official EU information service for clarification of a specific point in the Directive (see below).3 I accept that this is not a proper scientific method of research, but since the result of this section is only intended to demonstrate that my views are supported by other sources, I decided to include it. I asked the EU information service the following question:

“I found information about the customers' rights in case of purchase of faulty products. It says everywhere that the item must be 'purchased'. What if the product was free, as part of a larger deal – e.g. a free foot stool that came with an expensive sofa and the footstool breaks down after a couple of weeks as a result of a manufacturing error. Do I still have the same rights (i.e. right to a guarantee), even though I did not agree to pay for that specific product. I understand that the price of the smaller product was included in the price of the main item, but under the agreement it did not cost anything. On the invoice, the sofa is mentioned for the full price and the footstool for the amount of Euro 0. Could you please inform me where I can find the relevant background information (legislation, regulations etc.) to answer this question?”

The EU information service answered me as follows (underlining by me, JB):

“This matter is not explicitly regulated by Directive 1999/44/EC* on the sale of consumer goods. Nevertheless, when the consumer negotiates with the trader, the final price agreed between the parties would normally cover all products included in the contract of sale, including those that were added as a part of the bargain or negotiations. The fact that this additional element is presented by the trader as "free" is of no relevance for the application of the legal guarantee, as it is merely a marketing technique linking the sale of an expensive product with an additional benefit to persuade the consumer to decide. In fact, the total price covers both products and consequently the legal guarantee applies to these both products as well. A similar example of this situation are marketing techniques such as "buy 2 and receive the third for free".

The situation would be different, if the trader offers a real gift to the consumer which is not part of the bargain and therefore not part of the sales contract to which Directive 1999/44/EC applies. For example, when parties already agreed on the price and other conditions of sale, and only afterwards the trader voluntarily offers a gift to strengthen the brand loyalty of the consumer. In this case, the gift is not part of the contract of sale and is not subject to the legal guarantee under Directive 1999/44/EC.”4

This demonstrates that under the rules of at least one other EU Directive, the ‘sale’5 of goods includes the supply of goods advertised as ‘free’ that are part of negotiated deal. I consider this relevant, because in interpreting concepts of Union Law, as included in the EU VAT Directive, the CJEU considers that the explanation of the same or similar Union concepts as included in other EU legislation can possibly be used as guidance6, keeping in mind the possible similarities and differences in the aim, purpose and context of those provisions included in other EU legislation. Also, in at least one proposal for an amendment to the EU VAT Directive, a specific concept (‘payment service’) is defined by reference to its definition in another EU Directive.7