THE MAIN CONCLUSIONS AND RECOMMENDATIONS

593. Based on the findings from the research performed in this book, this final chapter provides a summary of the main conclusions that were established at the end of some of the preceding chapters. This chapter also develops normative recommendations on how ethical issues, analysed in Chapter 2 , and legal uncertainties, outlined in Chapter 3 , associated with mood HETs could be tackled to answer the main research question of this book:“How should policymakers and lawmakers address the main ethical and regulatory challenges of human mood enhancement technology?“.

594. Before discussing ethics and the law of mood HETs, some notions and concepts needed to be clarified first. The notion of mood falls, together with notions of emotions and feelings, within the umbrella term of affective states of people.

INTRODUCTION

425. Obligation to ensure the availability of the product/service as main obligation of the PSS supplier – The main obligation of the PSS supplier in a PSS contract is to ensure the availability of the product and/or the service to the PSS user. This obligation falls into two sub-obligations. First, the PSS supplier must make the product/service available to the PSS user, which generally implies a delivery obligation. Depending on the contractual qualification of this obligation, the risk regime, which essentially boils down to the question which party bears the risk of loss or damages to the product due to force majeure, will also diff er. These questions are discussed for the main three types of PSS in section 4.2. Second, it does not suffice to make the product/service available to the PSS user, this delivered product/service must also be in conformity with the PSS contract. Therefore, section 4.3. analyses the conformity requirements, the rules on liability for non-conformity and the available remedies for non-conformity for the three main types of PSS contracts. Section 4.4 evaluates the legal framework for these two sub-obligations and proposes normative solutions. Finally, section 4.5 sets out model clauses on the obligation to ensure the availability of the product/service for both use-oriented and result-oriented PSS contracts.

INTRODUCTION

800. Ownership, moral hazard, and end-of-life of the product – An essential characteristic of use-oriented and result-oriented PSS (and contrary to product-oriented PSS where ownership is still transferred) is that the PSS supplier wishes to retain the ownership of the product. The first section of this chapter (section 7.2) therefore deals with the question of how the PSS supplier can protect its right of ownership of the product. The second section of this chapter (section 7.3) discusses moral hazard, i.e. the risk that PSS user will treat the product less carefully then if he were the owner of the product. Here, particular attention is given to how this risk can be (contractually) mitigated. Finally, the third section (section 7.4) deals with the end-of-life stage of the product. Here, the responsibilities of the PSS supplier regarding collection, repurposing, and/or disposal of the product in use-oriented and resultoriented PSS are discussed compared to the responsibilities of the PSS supplier in product-oriented PSS. Additionally, this section also analyses how circular guarantees can be incorporated into the PSS contract.

INTRODUCTION

352. Importance of contractual qualification – PSS contracts are usually concluded between two parties: a) the PSS supplier and b) the PSS user. Yet more complex constructions are also possible. For example, PSS contracts can be offered through a platform, or a third party can be involved in the financing of the product. The parties to a PSS contract derive rights and obligations from both EU law and national law. To determine which rules apply to PSS contracts, it is therefore important to consider their contractual qualification.

353. Qualification under EU law – When considering the qualification of the PSS contract under EU law, the CRD is the first legal instrument that comes to mind. This directive makes a distinction between a “sales contract” and a “services contract”. According to the CRD, a “sales contract” means “any contract under which the trader transfers or undertakes to transfer the ownership of goods to the consumer and the consumer pays or undertakes to pay the price thereof, including any contract having as its object both goods and services.”

Analysed Terms and Conditions

INTRODUCTION

80. PSS under general contract law – This chapter sets out some basic principles of general contract law and applies them to PSS contracts. This provides the necessary context, concepts and legal building blocks that allow the following chapters to delve deeper in the contractual rights and liabilities of the PSS user and the PSS supplier.

First, the formation of the PSS contract is discussed. Section 2.2 analyses the requirements for the validity of the PSS contract, such as consent, capacity, object and cause. It also discusses the process of formation of the PSS contract, such as offer and acceptance, pre-contractual information, and the conclusion of the contract through representation.

Second, this chapter looks at the widespread use of standard contracts and general terms and conditions for PSS. Section 2.3 explores the role, function, and risks of using standard contracts for PSS contracts, as well as the requirements for incorporation/enforceability of the terms and conditions into the PSS contract. Furthermore, it deals with the (un)fairness of the terms and conditions, mainly through an analysis of the Unfair Contract Terms Directive (“UCTD”) and its national implementation in Belgian and the Netherlands.

The PSS user-consumer's right of withdrawal is examined in section 2.4. Here, there is a particular focus on the diff erence between the right of withdrawal for product-oriented PSS (which qualify as sales contracts for the purposes of the CRD) and use-oriented and result-oriented PSS (which qualify as service contracts for the purposes of the CRD).

926. Servitisation, circular business models and PSS contracts – Th is book3480 focused on the “servitisation” of the economy – a shift from buying products to using “products-as-service” – which is said to have a huge potential towards a more circular economy in the movable consumer products and services sector. Th e idea is that, since service suppliers retain ownership of the products off ered “as-a-service”, it is in their best interest to ensure they last a long time. Th is can be done by off ering high-quality and durable products that can easily be taken back, repaired, refurbished and/or recycled at the end of their useful life. Th e umbrella term used throughout this book is “product-service systems” (“PSS”), meaning a “marketable set of products and services, capable of jointly fulfi lling a user's need.”

927. One central research question… – Although the trend of servitisation has huge potential, also in economic terms, consumers oft en feel uncertain and hesitant to engage in new circular business models and PSS contracts. Th is may be explained by behavioural barriers and the lack of a clear regulatory framework. Moreover, the sustainability of PSS is not necessarily a given. Studies have shown that in some cases PSS even have a negative eff ect on sustainability due to careless use of a product by those who are not the owner (“moral hazard”) or due to an increase in “unnecessary” consumption of PSS that are cheaper than purchasing the product outright (so-called “rebound eff ects”).

6.1. INTRODUCTION

697. Additional services and specific obligations of the PSS supplier – Besides the general obligation to ensure the availability of the product/service, the PSS supplier often also offers additional services. This chapter first deals with the obligation to install the product (section 6.2). Then, it discusses the obligation to maintain and repair or replace the product (section 6.3). Third, it looks at the obligation to supply updates for connected “smart” products (section 6.4). Finally, this chapter looks at ways to include innovation obligations in the PSS contract (section 6.5).

INSTALLATION OF THE PRODUCT

698. Obligation of the PSS supplier to install the product – Very often, the PSS contract will include an obligation for the PSS supplier to install the product, especially for larger products such as home appliances, kitchens, HVAC equipment, etc. The term “installation” should be understood broadly, and includes putting together parts provided to the PSS user, mounting the product on other objects including any necessary adjustments (such as connecting a rented washing machine to the water supply and water discharge) as well as the replacement of parts. Several issues are relevant here. First, the question arises as to when the product is properly installed, and the consequences of

INTRODUCTION

619. Main obligation of PSS user is paying the price – The main obligation of the PSS user is the obligation to pay the price stipulated in the PSS contract. This obligation is discussed in section 5.2 for the three main types of PSS. First, the legal framework of the obligation to pay the price is discussed. This includes the legal basis of the obligation to pay the price and the rules on the modalities of the payment. Second, this section looks at the diff erent components of the price (e.g. periodical fee, pay-per-use fee, mandatory insurance fee, start-up cost, etc.) that may be included in the PSS contract. Third, the PSS supplier's transparency requirements regarding the price of the PSS are explored. Fourth, this section deals with the remedies in case of non-payment by the PSS user. In section 5.3, this chapter looks at price change clauses. These are clauses included in the PSS contract that allow the PSS supplier to increase the price, which are often used to hedge against changed circumstances. It discusses the limits to price change clauses and evaluates some examples of price change clauses found in the analysed PSS contracts. Additionally, clauses allowing to change the other terms of the PSS contract are also discussed in this section. Finally, section 5.4 addresses set off, which is a mode of extinguishment of obligations where the obligation of the PSS user to pay the price is “compensated” with a claim the PSS user has on the PSS supplier. In this section, the validity of and limits to set offclauses are also discussed.

1. European Commission

2. OVAM (Flemish environmental authority)

3. KBC Group (banking)

4. BSH (Businesses offering home appliances “as-a-service”)

5. Agoria (Business organisation of technology-driven companies)

6. IBJ (Professional organisation of in-house legal counsel)

7. UNIZO (Trade organisation)

8. COMEOS (Trade organisation)

9. BEUC (European consumer organisation)

10. Test-Aankoop (Belgian consumer organisation)

11. Peerby (Sharing and renting platform)

12. Aliloca (Business helping rental services grow)

13. Vlaanderen Circulair (Flemish policy maker circular economy)

14. Möbius (Consultancy company involved in circular economy projects)

15. Op wielekes (Business model for renting children’s bicycles)

16. Decathlon (Project We Play Circular: sport as a service)

17. Renson (Business active in the HVAC sector)

18. European Patent Office

19. ETAP (Business offering “light-as-a-service”)

20. Daikin (Business active in the HVAC sector)

21. P2S (Consultancy company involved in servitisation projects)

22. VOKA (Employers’ organisation)

23. POM West Flanders (Policy maker)

24. Tillup (Business active in the logistics sector)

25. Mediamarkt Saturn retail group (Business active in the retail sector (consumer electronics))

26. Pollet Water Group (Business active in the water sector)

27. Ariadne Innovation (Digital platform for a more sustainable textiles & fashion industry)

PROBLEM SETTING

TOWARDS A MORE CIRCULAR ECONOMY

Circular economy – Since the industrial revolution, our economy has predominately been characterised by a linear approach of growth and resource consumption following a “take – make – use – dispose” pattern. Producers extract resources, use them to manufacture a product, and sell this product to a customer who in turn discards it as waste when it no longer serves its purpose. Mankind however became aware that this linear approach upon which traditional business models are built exhausts global resources and causes environmental concerns. The “circular economy” – with key elements such as resource-efficiency and life-cycle thinking (“closing the loop”) – provides an alternative framework and is one of the most promising ways of making our (linear) economy more sustainable. This is achieved by making more sustainable purchasing decisions and keeping materials and products in the value chain for as long as possible instead of replacing them.

2. Circular economy strategies and circular business models – In a circular economy, various strategies and business models across many sectors are used to keep materials and products in the economy for as long as possible.11 These strategies include long-lasting design, sharing access or ownership, maintenance and repair, reuse, refurbishing, remanufacturing and recycling, etc.

In linear business models, producers and commercial intermediaries transfer ownership over products to final consumers, who buy and own these products for some time, and then discard them (turn them into “waste”). The consumer sales contract represents the final link in global value chains which consist of multiple cross-border commercial contracts. Existing consumer laws in EU Member States provide for extensive protection of consumers in the context of such “ownership-based” consumption of products, and even, to some extent, encourage unsustainable consumption choices. EU waste law has attempted to mitigate the worst environmental impacts of the linear economy and throwaway society, by establishing a waste hierarchy and, for certain products such as electronic devices and batteries, imposing extended producer responsibility (EPR) schemes.

In contrast, circular business models (CBMs) break away from this traditional approach. Here, manufacturers or retailers no longer sell their products down the chain but become service providers who retain ownership of the product and its material resources. The final user does not “consume” the product but rather enjoys “access-based” consumption, based on a rental contract, a lease contract, a contract of works, a service contract, or another contract directly concluded with the service provider – typically online.

INTRODUCTION

50. Research question – This part addresses the first RQ, which is formulated as follows:

51. A dditional RQs – As mentioned above, the first RQ is split up into three additional RQs, being:

• – What is the current legal framework and the relation between international law, EU law and national law regarding intrastate grid connection and transmission?

• – Is this framework adequate/comprehensive enough to deal with the future intrastate connection and transmission of electricity?

• – If this framework is not adequate/comprehensive enough, how should the legal framework look like to deal with the future intrastate connection and transmission of electricity and who could deal with this?

This research question and the additional questions will be approached from a functional comparative law perspective, in which specific points will be examined by taking into account the legal regimes of the Netherlands and the UK.

52. Structure – First, the legal framework concerning grid development and integration (Pillar I) is discussed. Second, the legal aspects related to market issues (Pillar II) are assessed. Third, the legal framework for the planning and authorisation of (offshore) grid infrastructure (Pillar III) is examined. This section of the book primarily addresses the regime for connecting the OWFs and transmitting electricity generated by the OWFs, without considering cross-border interconnections.

INTRODUCTION

204. Aim – Cooperation between States is essential to realize the energy transition. This is also externalized in the development of (onshore and offshore) interconnected electricity systems. This part examines the interrelationship between transmission systems and interconnectors.

As regards interconnectors, this part looks for an answer to define energy islands, energy hubs, hybrid interconnectors, and multi-purpose interconnectors, relying on literature in the technical and economic research domains. This has to do with the fact that the definitions put forward in various laws and regulations are quite diverse and sometimes non-existent. Moreover, the functioning of the electricity markets is, to a large extent, an economic and technical topic, so the economic and technical literature should not be overlooked.

Following the technical and economic qualifications of the different concepts (energy islands, energy hubs, interconnectors … ), chapter 2.2 discusses the legal frameworks for the qualification of the respective infrastructure. What will become apparent is that the current legal framework, in terms of international law, European law, and national law, is not entirely clear and that pragmatism is often necessary to address qualification issues.

205. Research question – This part builds further on the results established in the previous chapters and is related to the long-term research question:“How can the current legal framework for interconnecting the Belgian OWFs to grids of other countries be assessed?“