Turkey: Refurbished Products And Producers' Liability

1) Contractual Liability Arising Out of Defective Products and Services

The Regulation holds the Refurbishment Centre and authorized seller jointly liable for the consumers' statutory rights, including rights under the warranties and after-sale services.

On the other hand, the Consumer Protection Law further holds the producer and importers jointly liable together with the seller for the consumers' elective rights to free-of-charge repair and replacement. However, if applied as is in the matters that fall under the Regulation, this provision may give rise to unfair consequences for the reasons explained below.

Firstly, the first sale of the product and the further sales (as refurbished products) are subject to prescription/warranty periods with different durations and different starting points. Holding producers/importers jointly liable with the resellers/Refurbishment Centres would put them to carry contractual obligations for an unforeseeable future and for circumstanced beyond their controls. This goes against the fundamentals of the concept of statute of limitations.

Secondly, when being offered for a resale, a refurbished product would contain certain marks indicating that it is "refurbished" and it comes with specific repairs and replacements. Consumers informed of the refurbishment should not be allowed to direct any claim to the producer/importer for refurbishment-related defects. Hence, Art 5 of the Regulation, for this purpose, provides that the warranties initially provided by producers or importers shall remain in force if they have given consent to the refurbishment process.

That being said, whether or not the defect is related to the refurbishment process would often be a controversial issue. Producers and importers who face consumer claims for free-of-charge repairs or replacements would need to prove, as stipulated under Art. 11/2 of the Consumer Protection Law, that the defect occurred after they put the product on the market, in particular in the course of the refurbishment process.

Another justifying reason for producers and importers avoiding such consumer claims would be the fact that requested repairs and replacements would be unreasonably burdensome as per Art. 11/3 of the Consumer Protection Law. Indeed, the refurbished product in question would be a unique item, having certain parts repaired and replaced. It may also be the case that the producer may have ceased its serial production long ago. It would not always be reasonable and fair to expect producers/importers to replace such products with new ones or repair them using original spare parts. Due to these concerns, Turkish courts, in case of a dispute, may redirect the consumers to exercise their other alternative rights against the authorized seller and Refurbishment Centres to claim reimbursement upon rescinding the sale contract or to claim a reduction in the purchase price.

In view of the above, the consumers' remedies to be exercised producers/importers should be granted only if these producers/importers have given consent to the refurbishment process. Supporting this conclusion, the Regulation, for the purposes of enlightening the consumers about their available rights, requires the refurbished product packages to bear a mark stating "Refurbished Under the Producer's Approval" if such approval exists.

2) Non-Contractual Product Liability

The Regulation holds the Refurbishment Centres liable for compensation claims arising from bodily injuries and damages caused by the refurbished products (Art. 12/9). This liability corresponds to the product liability regime set forth by the Product Safety Law. Product liability can be invoked not only by the consumers party to a contract, but also third parties who sustained a loss from the refurbishment process. This is why such liability is often evaluated as a type of tortious liability.¹

Refurbishment Centres should be evaluated "dealers" in terms of the Product Safety Law, i.e. "enterprises involved in the supply chain (other than producers and importers) by releasing the products to the market". That being said, dealers bear the product liability just like producers and importers normally do if the dealers,

• Release the product under their trade name or trademark or
• Change the product in a way effecting its conformity with the product safety regulations and technical requirements

as stipulated under the Regulation and amendments to the Consumer Protection Law.

For this reason, Art 12/9 of the Regulation conforms with the liability regime under the Product Safety Law. Notably, Product Safety Law does not allow any agreement by and between parties that would contract out the strict liability imposed on the producers/Refurbishment Centres.

Having sustained damage arising out of the refurbished product, a person can succeed in its claim if it manages to prove the existence of the loss and its causal nexus with the non-conformity with the product. As a feature of strict liability, this person is not required to determine and prove whether the non-conformity has occurred within the sphere of the original producer or the Refurbishment Centre. This is why the claimant may find more than one potentially liable counterpart to direct its claims in such cases. These producers, a term that includes Refurbishment Centres in the context of product liability, can avoid liability only if they prove that their activities did not cause the alleged non-conformity. If both the actual producer and the Refurbishment Centre fail to meet their burden of proof, the court may hold these jointly liable for the claimed compensation. They may further recourse to each other as per their internal shares of liability.