# C_2006086EN.01000702.xml

| 8.4.2006 | EN | Official Journal of the European Union | C 86/7 |
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JUDGMENT OF THE COURT

(Second Chamber)

of 25 October 2005

in Case C-229/04: Reference for a preliminary ruling from the Hanseatisches Oberlandesgericht in Bremen: Crailsheimer Volksbank eG v Klaus Conrads, Frank Schulzke and Petra Schulzke-Lösche, Joachim Nitschke( 1 )

(Consumer protection - Contracts negotiated away from business premises - Loan agreement linked to property purchase concluded in a doorstep-selling situation - Right of cancellation)

(2006/C 86/12)

Language of the case: German

In Case C-229/04: reference for a preliminary ruling under Article 234 EC from the Hanseatisches Oberlandesgericht in Bremen (Germany), made by decision of 27 May 2004, received at the Court on 2 June 2004, in the proceedings between Crailsheimer Volksbank eG and Klaus Conrads, Frank Schulzke and Petra Schulzke-Lösche, Joachim Nitschke, the Court (Second Chamber), composed of C.W.A. Timmermans, President of the Chamber, J. Makarczyk, C. Gulmann (Rapporteur), R. Silva de Lapuerta and P. Kuris, Judges; P. Léger, Advocate General; M. Ferreira, Principal Administrator, gave a judgment on 25 October 2005, in which it ruled:

| 1. | Articles 1 and 2 of Council Directive 85/577/EEC of 20 December 1985 to protect the consumer in respect of contracts negotiated away from business premises must be interpreted as meaning that when a third party intervenes in the name of or on behalf of a trader in the negotiation or conclusion of a contract, the application of the Directive cannot be made subject to the condition that the trader was or should have been aware that the contract was concluded in a doorstep-selling situation as referred to in Article 1 of the Directive. |
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| 2. | Directive 85/577, and Article 5(2) thereof in particular, does not preclude:
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a requirement that a consumer who has exercised his right to cancel under the Directive must pay back the loan proceeds to the lender, even though according to the scheme drawn up for the investment the loan serves solely to finance the purchase of the immovable property and is paid directly to the vendor thereof; —
a requirement that the amount of the loan must be paid back immediately; —
national legislation which provides for an obligation on the consumer, in the event of cancellation of a secured credit agreement, not only to repay the amounts received under the agreement but also to pay to the lender interest at the market rate; However, in a situation where, if the Bank had complied with its obligation to inform the consumer of his right of cancellation, the consumer would have been able to avoid exposure to the risks inherent in investments such as those at issue in the main proceedings, Article 4 of the Directive requires Member States to ensure that their legislation protects consumers who have been unable to avoid exposure to such risks, by adopting suitable measures to allow them to avoid bearing the consequences of the materialisation of those risks. | — | a requirement that a consumer who has exercised his right to cancel under the Directive must pay back the loan proceeds to the lender, even though according to the scheme drawn up for the investment the loan serves solely to finance the purchase of the immovable property and is paid directly to the vendor thereof; | — | a requirement that the amount of the loan must be paid back immediately; | — | national legislation which provides for an obligation on the consumer, in the event of cancellation of a secured credit agreement, not only to repay the amounts received under the agreement but also to pay to the lender interest at the market rate; |
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| — | a requirement that a consumer who has exercised his right to cancel under the Directive must pay back the loan proceeds to the lender, even though according to the scheme drawn up for the investment the loan serves solely to finance the purchase of the immovable property and is paid directly to the vendor thereof; | | | | | | |
| — | a requirement that the amount of the loan must be paid back immediately; | | | | | | |
| — | national legislation which provides for an obligation on the consumer, in the event of cancellation of a secured credit agreement, not only to repay the amounts received under the agreement but also to pay to the lender interest at the market rate; | | | | | | |

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( 1 )  OJ C 201, of 7.8.2004.

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