Opinion of the Advocate General — ECLI:EU:C:2004:568
Date: 2004-09-28
Language of the case: German
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the Judgment 1. Approximation of laws – Consumer protection – Article 95(3) EC – Provision which cannot be relied on directly as a basis for obligations which are binding on a Member State (Art. 95(3) EC) 2. Approximation of laws – Consumer protection in the case of contracts negotiated away from business premises – Directive 85/577 – Scope – Contracts for the sale of immovable property which are a component of an investment scheme financed by a loan – Not included (Council Directive 85/577, Art. 3(2)(a)) 3. Approximation of laws – Consumer protection in the case of contracts negotiated away from business premises – Directive 85/577 – Loan agreement serving to finance the purchase of immovable property – Cancellation – Effects – Obligation to repay immediately with interest – Whether permissible (Council Directive 85/577, Arts 4, 5 and 7) 1. Article 95(3) EC, which provides that the Commission, in its proposals envisaged in paragraph 1 of that article concerning consumer protection, is to take as a base a high level of protection, and that, within their respective powers, the European Parliament and the Council of the European Union are also to seek to achieve that objective, is directed at the various institutions, which each have their role in the legislative process. That provision cannot, therefore, be relied on directly as a basis for obligations which are binding on a Member State. At the most the provision could be used as an aid to interpretation of the Directive. (see paras 59, 61) 2. Article 3(2)(a) of Council Directive 85/577 to protect the consumer in respect of contracts negotiated away from business premises must be interpreted as excluding from the scope of the Directive contracts for the sale of immovable property even where they are merely a component of an investment scheme financed by a loan for which the negotiations prior to the conclusion of the contract were held in a doorstep-selling situation, both as regards the contract for the purchase of the immovable property and the loan agreement serving solely to finance that purchase. (see para. 81, operative part 1) 3. Although, under Article 7 of Directive 85/577 to protect the consumer in respect of contracts negotiated away from business premises, it is for the Member States to legislate as regards the legal effects of cancellation of the contract by the consumer, that power must be exercised in accordance with Community law and, in particular, the rules of the Directive interpreted in the light of its objective and in such a way as to ensure that it is fully effective. In that regard, in the case of a loan agreement serving to finance the purchase of immovable property, the Directive does not preclude: - national rules which limit the effect of cancellation of the loan agreement to the avoidance of that agreement, even in the case of investment schemes in which the loan would not have been granted at all without the acquisition of the immovable property; - 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, 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. (see paras 69, 81, 88-89, 93, 103, operative part 2-3)