No C 243/2 Official Journal of the European Communities 28. 9. 90 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for a Council Directive on unfair terms in consumer contracts 
COM(90) 322 fin. — SYN 285 
(Submitted by the Commission on 24 July 1990) 
(90/C 243/02) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European 
Economic Community, and in particular Article 100a 
thereof, 
Having regard to the proposal from the Commission, 
In cooperation with the European Parliament, 
Having regard to the opinion of the Economic and 
Social Committee, 
Whereas it is necessary to adopt measures to 
progressively establish the internal market before 31 
December 1992; whereas the internal market comprises 
an area which has no internal frontiers and in which 
goods, persons, services and capital move freely; 
"Whereas national laws of Member States relating to the 
terms of contract applicable between the seller of goods 
or services, on the one hand, and the purchaser of them, 
on the other hand, show many disparities, with the result 
that the national markets for the sale of goods and 
services to consumers differ from each other and that 
distortions of competition may arise amongst the sellers, 
notably when they sell in Member States other than their 
own; 
Whereas, in particular, national laws of Member States 
relating to unfair terms in contracts concluded with 
consumers show marked divergences, and the same is 
true of their national laws relating to the obligation of 
the seller of goods to answer for the quality of them, for 
their fitness for the purpose for which they are sold, and 
for their conformity to the contract, and of the supplier 
of services to answer for the performance of them; Whereas consumers do not know the laws which, in 
other Member States than their own, govern contracts 
for the sale of goods or services; and whereas this 
difficulty may deter them from direct transactions of 
purchase of goods or services in another Member State; 
Whereas in order to facilitate the establishment of a 
single market and to safeguard the citizen in his role as 
consumer when buying goods and services by contracts 
which are governed by the laws of other Member States 
than his own, it is essential to remove unfair terms from 
those contracts; 
Whereas sellers of goods and services will thereby be 
helped in their task of selling goods and services, both at 
home and throughout the single market; and whereas 
competition between sellers will thus be stimulated, so 
contributing to increased choice for Community citizens 
as purchasers; 
Whereas the Community's programmes for a consumer 
protection and information policy (') underlined the 
importance of safeguarding consumers in the matter of 
unfair terms of contract; and whereas this protection 
ought to be provided by laws and regulations which are 
either harmonized at Community level or adopted 
directly at that level; 
Whereas in accordance with the principle laid down 
under the heading 'Protection of the economic interests 
of the consumers', as stated in those programmes: 
'Purchasers of goods and services should be protected 
against the abuse of power by the seller, in particular 
against one-sided standard contracts and the unfair 
exclusion of essential rights in contracts'; 
O OJ No C 92, 25. 4. 1975, p. 1, 
OJNoC 133, 3.6. 1981, p. 1. 
28. 9. 90 Official Journal of the European Communities No C 243/3 
Whereas more effective protection of the consumer can 
be achieved by adopting uniform rules of law in the 
matter of unfair terms; whereas those rules should apply 
to all consumer contracts, whether concluded in writing 
or by word of mouth, and, if in writing, whether by 
means of one document or several; 
Whereas more effective protection of the consumer can 
be achieved by adopting rules of law which, in the 
matter of unfair terms, are to apply to all of them; 
Whereas Member States should ensure that unfair terms 
are not used in contracts concluded with consumers in 
the course of the trade, business or profession of the 
person who carries it on, and that if, nevertheless, such 
terms are so used they will be treated as void, but the 
remaining terms will remain valid and the contract shall 
continue to bind the parties upon those terms if it is 
capable of continuing in existence without the void 
provisions; 
Whereas it is desirable to identify certain types of terms 
which must not be used in contracts concluded with 
consumers; 
Whereas persons or organizations, if regarded under 
national law as having a legitimate interest in the matter, 
must have facilities for initiating proceedings concerning 
terms in contracts concluded with consumers, and in 
particular unfair terms, either before a court or before an 
administrative authority which is competent to decide 
upon complaints or to initiate appropriate legal 
proceedings; 
Whereas the courts or administrative authorities must 
have powers enabling them to order or obtain the with­
drawal from use of offending terms, 
HAS ADOPTED THIS DIRECTIVE: 
Article 1 
The purpose of this Directive is to approximate the laws, 
regulations and administrative provisions of the Member 
States relating to unfair terms in consumer contracts. 
Article 2 
For the purposes of this Directive: 
1. A contractual term is unfair if, of itself or in combi­
nation with another term or terms of the same 
contract, or of another contract upon which, to the 
knowledge of the person or persons who conclude the 
firstmentioned contract with the consumer, it is 
dependent: — it causes to the detriment of the consumer a 
significant imbalance in the parties' rights and 
obligations arising under the contract, or 
— it causes the performance of the contract to be 
unduly detrimental to the consumer, or 
— it causes the performance of the contract to be 
significantly different from what the consumer 
could legitimately expect, or 
— it is incompatible with the requirements of good 
faith. 
2. The Annex contains a list of types of unfair terms. 
3. 'The consumer' means a natural person who, in trans­
actions covered by this Directive, is acting for 
purposes which can be regarded as outside his trade, 
business or profession. 
4. 'Trade' and 'business' shall be taken to include the 
activities of suppliers, whether publicly owned or 
privately owned, and those expressions also cover the 
sale, hiring out or other provision of appliances by 
those suppliers. 
5. The fairness or unfairness of a contractual term is to 
be determined by reference to the time at which the 
contract is concluded, to the surrounding circum­
stances at that time and to all the other terms of the 
contract. 
Article 3 
Member States shall: 
— prohibit the use of unfair terms in any contract 
concluded with a consumer by any person acting in 
the course of his trade, business or profession; this 
prohibition shall be without prejudice to the seller's 
right to obtain compensation from his own supplier, 
— provide that if, notwithstanding this prohibition, 
unfair terms are used in such a contract they shall be 
void, and that the remaining terms of the contract 
shall continue to be valid and that the contract shall 
continue to bind the parties upon those terms if it is 
capable of continuing in existence without the void 
provisions. 
Article 4 
1. Member States shall ensure that in the interests of 
consumers, competitors and the public generally, 
adequate and effective means exist for the control of 
unfair terms in contracts concluded with consumers and 
of the terms of contracts for the sale of goods or services 
to them. 
No C 243/4 Official Journal of the European Communities 28. 9. 90 
2. Such means shall include provisions of law whereby 
persons or organizations, if regarded under national law 
as having a legitimate interest in protecting consumers, 
may take action before the courts or before an adminis­
trative authority competent to make a decision for deter­
mination of the question whether the terms used in such 
a contract are inconsistent with the provisions of this 
Directive. 
Article 5 
Not later than 31 December 1997 the Commission shall 
present a report to the Council concerning the operation 
of this Directive. comply with this Directive not later than 31 December 
1992 and shall forthwith inform the Commission thereof. 
Those provisions shall apply to all contracts concluded 
with consumers after 31 December 1992. 
The provisions adopted pursuant to the first 
subparagraph shall make express reference to this 
Directive. 
2. Member States shall communicate to the 
Commission the texts of the main provisions of national 
law which they adopt in the field covered by this 
Directive. 
Article 6 
1. Member States shall bring into force the laws, 
regulations and administrative provisions necessary to Article 7 
This Directive is addressed to the Member States. 
ANNEX 
The following types of terms are unfair if they have the object or effect of: 
(a) excluding or limiting the liability of a contracting party in the event of death or personal injury to the 
consumer resulting from an act or omission of that contracting party; 
(b) providing that a seller or supplier of goods or services may alter the terms of contract unilaterally, or 
terminate unilaterally a contract of indeterminate duration by giving an unreasonably short period of 
notice. This prohibition shall not prevent a supplier of financial services: 
(i) from altering the rate of interest on a loan or credit granted by him or the amount of other 
charges therefor; or 
(ii) from terminating unilaterally a contract of indeterminate duration, 
provided the contract confers the power to do so and also requires suitable notice of the alteration or 
termination to to be given to the other contracting party or parties. 
Moreover, this paragraph (b) shall not affect: 
(i) the application of price indexation clauses where these are lawful; 
(ii) stock exchange transactions; 
(iii) contracts for the purchase of foreign currency; 
(c) 1. denying the consumer the right, as purchaser under a contract for the sale of goods: 
to receive goods which are in conformity with the contract and are fit for the purpose for which 
they were sold, 
— to complain that the goods contain hidden defects, 
28. 9. 90 Official Journal of the European Communities No C 243/5 
— to require the seller (in the event that the goods supplied are not in conformity with the contract 
or are not fit for the purpose for which they were sold): 
(i) to reimburse the whole of the purchase price; or 
(ii) to replace the goods; or 
(iii) to repair the goods at the seller's expense; or 
(iv) to reduce the price if the consumer retains the goods, 
— to require the seller (whichever of the foregoing options the consumer chooses) to compensate 
the consumer for damage sustained by him which arises out of that contract, 
— (in cases where the seller transmits to the consumer the guarantee of the manufacturer of the 
goods) to benefit from the manufacturer's guarantee for a period equal, at the least, to the 
normal life of the goods or 12 months, whichever is the shorter; and to enforce payment, either 
by the seller or by the manufacturer, of the costs incurred by the consumer in obtaining 
implementation of that guarantee; 
2. denying the consumer the right, as purchaser under a contract for the supply of services: 
— to be supplied with those services at the agreed time and efficiently from his point of view, 
— to have the supplier's warranty that the supplier has the requisite skill and expertise to supply the 
services in the manner specified in the foregoing indent; 
(d) providing for the price of goods to be determined at the time of delivery or allowing a seller or supplier 
of goods to increase their price, not withstanding that in these various cases the consumer buyer has no 
corresponding right to cancel the contract if the final price is too high in relation to the price he 
expected when concluding the contract; but the application of price indexation clauses where lawful 
shall not hereby be affected; 
(e) excluding or limiting the liability of the seller or supplier or of another party in the event of total or 
partial non-performance by him; 
(f) imposing on the consumer a burden of proof which, according to the applicable law, should lie on 
another party to the contract; 
(g) in relation to a contract for the purchase of a timeshare interest in a building, fixing the date of 
conclusion of the contract in such a way as to deny to the consumer the possibility of withdrawing 
from the contract within seven clear days after making it.