Unfair contractual conditions for food sales between traders from 1 May 2019

From 1 May 2019, new rules for contracts in the food trade apply in Slovakia.

The new law aims at more effective prevention of unfair contractual conditions in the food trade with suppliers. The legislator believes that suppliers are often the weaker contracting parties compared to retail chains.

The law describes more than 40 practices as unfair and sanctionable. These are conditions in which one contracting party demands a service for which, from the point of view of the legislator, the other contracting party does not provide sufficient consideration or deviates from fair business dealings. The law does not precisely define what constitutes fair business transactions.

Since 1 May, inappropriate trading conditions include, for example, provisions which enable the following:
– reduction of the purchase price, with the exception of sales,
– discrimination against a supplier or group of suppliers through conditional use of a particular type of packaging where another supplier is able to use more economically advantageous packaging in supplying the same or a similar product,
– the buyer’s right to buy food at a lower purchase price than the supplier’s economically justified costs,
– unjustified or unfounded set-off of claims by the parties involved in a business relationship,
– acquisition of ownership or transfer of the risk of damage to a foodstuff at a time other than the time when the foodstuff was taken over by the buyer,
– demanding a guaranteed price for longer than 60 days,
– longer periods for payment of the purchase price than 30 days from the date of delivery.

Agricultural products and foodstuffs produced in Slovakia should now account for at least half of the total number of products mentioned in leaflets, advertising magazines or other forms of communication for promotional and marketing purposes.

Also new is the fact that the same law also applies if unfair conditions between the parties to a business relationship were negotiated, agreed or enforced abroad, or if the contractual relationship is governed by a legal system other than Slovak law, provided that the effects of such conduct will or could occur on the territory of the Slovak Republic.

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