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Vol. 1984/0 023 
  
 
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Conformém ent au règlement (CEE, Euratom) n° 354/83 du Conseil du 1er février 1983 
concernant l'ouverture au public des archives historiques de la Communauté économique 
européenne et de la Communauté européenne de l'énergie atomique (JO L 43 du 15.2.1983, 
p. 1), tel que modifié par le règlement (CE, Euratom) n° 1700/2003 du 22 septembre 2003 
(JO L 243 du 27.9.2003, p. 1), ce dossier est ouvert au public. Le cas échéant, les documents 
classifiés présents dans ce dossier ont été déclassifiés conformément à l'article 5 dudit 
règlem ent. 
In accordance with Council Regulation (EEC, Euratom) No 354/83 of 1 February 1983 
concerning the opening to the public of the historical archives of the European Economic 
Community and the European Atomic Energy Communit y (OJ L 43, 15.2.1983, p. 1), as 
amended by Regulation (EC, Euratom) No 1700/2003 of 22 September 2003 (OJ L 243, 
27.9.2003, p. 1), this file is open to the public. Where necessary, classified documents in this 
file have been declassified in conformity with Article 5 of the aforementioned regulation. 
In Übereinstimmung mit der Verordnung (EWG, Euratom) Nr. 354/83 des Rates vom  1. 
Februar 1983 über die Freigabe der historischen Archive der Europäischen 
Wirtschaftsgemeinschaft und der Europäischen Atomgem einschaft (ABI. L 43 vom  15.2.1983, 
S. 1), geändert durch die Verordnung (EG, Euratom) Nr. 1700/2003 vom 22. Septem ber 2003 
(ABI. L 243 vom 27.9.2003, S. 1), ist diese Datei der Öffentlichkeit zugänglich. Soweit 
erforderlich, wurden die Verschlusssachen in dieser Datei in Übereinstimmung mit Artikel 5 
der genannten Verordnung freigegeben. 
COMMISSION OF THE EUROPEAN COMMUNITIES
COM(84) 55 final
Brussels, 9 February 1984
UNFAIR TERMS IN CONTRACTS CONCLUDED  
WITH CONSUMERS
(Communication from the Commission)
COM(84) 55 final

1
UNFAIR TERMS IN CONTRACTS CONCLUDED
WITH CONSUMERS
I THE PROBLEM
1. In all the Community Member States, in both civil law and common law  
systems, the fundamental principle of contract law is that the parties to  
a contract are free to negotiate its terms. In those countries with a  
codified civil law system (France, Belgium, Luxembourg, Italy, Germany,  
Denmark, the Netherlands and Greece), the civil codes devised and drafted  
in the nineteenth century allow the contracting parties considerable  
freedom of negotiation. Generally, the rules they lay down form a  
framework leaving the contracting parties considerable scope to derogate  
from or supplement their provisions.
2. The position is very similar in the common law countries (United  
Kingdom and Ireland). The contracting parties are normally free to  
negotiate the terms of a contract, and each party, particularly the  
purchaser of goods, is responsible for ensuring that the contract concluded  
is not to his disadvantage (caveat emptor). Statute law has been used  
only to prevent flagrant abuses.
3. The emergence of a society of mass production, distribution and  
consumption has resulted in the increasing formalisation of contracts, and  
particularly in the development of standard form contracts. The use of  
standard terms is now widespread throughout the Community, and applies in  
the vast majority of contracts between suppliers and consumers. For 
example, contracts for the sale of consumer durables or for the supply of  
electricity, gas or water are, as a rule, subject to standard terms, drawn  
up in advance by the supplier. Many other examples could be cited.
4· In real economic terms, there are essentially only two types of trans­
action in which contract terms are not generally formulated in advance.
(a)atypical transactions relating to situations so far removed from  
the norm that standard terms are inappropriate;
00on-the-spot transactions which do not involve a substantial risk  
for the supplier, such as retail sales of foodstuffs, books or  
cosmetics.
5· Standard contract terms play an important part, not only in consumer  
contracts, but also in those between traders. This working paper is  
concerned only with consumer contracts, but it should be borne in mind  
that many of the arguments put forward apply equally well to other  
contracts, particularly those between small traders and their suppliers.
6. Although many of the details of the typical consumer contract - such  
as price, time of delivery and description of the goods - vary from  
contract to contract, the underlying legal framework - the supplier's  
standard business conditions - does not. The application of these  
conditions to his own contract may seriously prejudice the consumer's  
interests.

2
7· Standard conditions may provide, for example, that stipulations as to  
time of delivery are purely indicative in character and have no binding  
force, so that the consumer is left without a remedy if the goods are not  
delivered within the time specified. Furthermore, the very fact that the  
consumer is permitted to stipulate a time may actually work to his  
detriment in such cases: for it may give him the impression that his  
stipulation is a term of the contract. If he had been told unequivocally  
that delivery times were not guaranteed and that there was, therefore, no  
point in his choosing a date, he might well have decided either not to  
make the contract with that supplier, or to try to negotiate on the basis  
that the standard condition in question should not apply and that the  
stipulation as to delivery time was a term of the contract.
8. Standard conditions may go so far as to purport to exclude the  
consumer's rights under the general law, sometimes offering him a more  
limited "warranty" in exchange. This situation, which may reasonably be  
described as an abuse of the principle of freedom of contract, has led to  
the adoption in a number of Member States of legislation designed to redress  
the balance in favour of the consumer: details are given below in section II  
of this paper.
9· A possible "self help" remedy has already been suggested at para 7 
above: the consumer may try to make the contract on terms other than those  
proposed by the supplier. However, very few consumers will be sufficiently  
well-informed to do so; and those who try, for example, by striking out  
clauses to which they object, and stipulating that the general provisions  
of the law shall apply, may well find that the supplier refuses to do  
business except on his own standard conditions. Moreover, the consumer who  
then decided to try another supplier will almost inevitably find himself  
faced with that supplier's standard conditions.
10. There appear to be two main types of standard term contract which may  
cause problems for consumers. First, standard form contracts which, for  
the purposes of this discussion paper mean contracts prepared and printed  
in advance: only the name and address of the purchaser and details  
identifying the goods or services in question need be added in each  
individual case. The use of standard form contracts effectively excludes  
the possibility of real negotiation between the parties on the conditions  
governing the subject matter of the contract (although there may be  
negotiation on such matters as the price and the specifications of the  
goods). Secondly, contracts other than the above, whether or not in  
writing, made subject to the supplier's standard business conditions:  
typical examples are contracts for services such as dry-cleaning or  
transport, where a ticket or voucher is generally given, and written  
contracts for structural work on buildings. In these cases some of the  
terms may well be negotiated between the parties, but the standard  
conditions used by the supplier often purport to restrict or exclude the  
effect of such negotiation, as outlined under ^ above. In the case of  
oral contracts there is, from the consumer’s point of view, the additional  
difficulty of proof.
11. Standard contract terms have the advantage of saving time on  
negotiation and, from the consumer's point of view, ought strictly to  
provide greater legal certainty than non-standard terms, as they have been  
used in a large number of contracts and may even have been the subject of  
court decisions. In practice, however, the typical consumer, not being a  
lawyer, is very unlikely to be aware of this.

3
12. In most cases, standard terms are drawn up "by or on behalf of the  
supplier for use in his dealings with consumers. In some cases they are  
prepared by the company’s legal department, or adapted from a model  
prepared by an independent legal adviser; in others, they are drawn up by  
a trade association for use by its members. The common feature of all  
these methods is that the standard terms are drawn up without the  
consumer’s participation, so he is unable to assert his interests and  
ensure that they are reflected in the terms.
13« Many, if not most, consumers who enter into contracts made on standard  
terms do so in ignorance of their precise meaning. Frequently, although  
the contract stipulates that signature by the consumer indicates that he  
understands and accepts all its terms, the consumer has in practice no  
real opportunity to study the terms, for example, because they have not  
been communicated to him in advance, or because he has simply been advised  
that they are available on request or are to be found elsewhere. Moreover,  
even if the consumer has the opportunity to study the terms, he will  
probably be unaware of the precise legal significance of the language used,  
any may therefore be misled as to the contract’s true meaning.
14· While the law generally ensures a certain equilibrium between the  
various interests involved, it is not the purpose or effect of standard  
terms to establish a fair balance. They are designed to reinforce the  
economic and legal position of the party who drew them up and uses them.
The main purpose of the various clauses governing, for example, the terms  
of payment of the contract price or the obligations of the supplier in the  
event of non-delivery or faulty delivery, is to limit the supplier’s  
contractual obligations and liabilities while adding to those of the  
consumer. Since the terms were designed, drawn up and applied unilaterally  
by the supplier, they improve his bargaining power. The result is that the  
consumer’s position in negotiating and performing contracts with a  
supplier is further weakened. The reason for this is that the consumer is  
rarely in an economic position in relation to the supplier which enables  
him to impose contract terms on the supplier.
1 5.  The widespread use of standard contract terms can thus be seen as  
calling into question the consensual basis of contract law. It was long  
believed that the provisions of the general law ensured an equitable  
balance between the parties to a contract, while parliament and the courts  
saw to it that this balance was maintained. Since the parties to a  
contract may in so many cases derogate from the law’s provisions, however,  
the equitable balance which such laws might have guaranteed is almost  
never achieved, because suppliers use standard terms designed primarily to  
protect their own interests.
II TEE SITUATION IN THE MEMBER STATES
16. General Observations
The principles of the law of contract were to a great extent laid down in  
the last century, and were devised for parties of approximately equal  
economic power. This was not an altogether realistic view of the typical  
contract even then: and it is clearly inappropriate today. Rather,  
however, than take an approach which would involve a general reform of  
the law of contract, at least insofar as it concerns consumer contracts, a  
number of Member States have in recent years enacted specific legislation

4
dealing with particular types of contract between suppliers and consumers  
(for example, "doorstep" contracts, consumer credit and travel contracts).  
These laws frequently prohibit any derogation from their provisions.
17·  Nevertheless, both approaches - general reform or partial reform by  
sector of the law of contract - require a considerable investment of time  
and effort. In a society of mass production and distribution any general  
reform may well have a major impact on the existing economic and legal  
structures and cause considerable confusion. While affording consumers a  
degree of protection, mandatory legislation is at the same time open to  
criticism as restricting business activity. This frequently leads to more  
general criticism of excessive legislation on the grounds that it restricts  
economic freedom and leads to the risk of higher unemployment following  
price rises, or to loss of competitiveness. Moreover, as it is difficult  
to evaluate precisely the full impact of new legislation on a given sector  
of the economy or production and distribution in general, it is not  
surprising that legislative action sometimes takes a very long time. For  
example, negotiations on the international convention on a Uniform Law on  
International Sale of Goods (ULIS) took over 20 years. The process is,  
admittedly, much faster at national level, but it is still apparent that  
the drafting and amendment of national legislation does not always keep  
pace with the need to maintain a balance between the interests of consumers  
and suppliers. This gap between economic reality and the legislative  
process is often increased by the fact that laws, being abstract and  
general in nature, cannot always take account of all aspects of economic  
activity. Their precise impact often appears in the interpretation they  
receive in court decisions, even when drafted in very narrow or precise  
terms.
18. To sum up:
- overall or specific legislative action, whether national or inter­
national, takes considerable time to prepare and implement}
- the fact that it is abstract and does not specifically deal with all  
aspects of economic activity means that it cannot cover every  
situation in which there is an imbalance between the rights and  
obligations of the contracting parties;
- the economic situation evolves so rapidly that it cannot be  
accurately and permanently reflected in legislation.
19· In seeking a so lu tio n  to  the problems raised  by contract terms drawn up  
u n ila te r a lly , Member S tates have gen erally introduced a number o f measures  
adopting where appropriate mandatory provisions governing certa in  types o f  
contract or economic a c tiv ity . The measures given as examples below are  
in  many cases concurrent with and supplemented by other p rovision s.
20. To mitigate some of the consequences of standard contract terms, a  
general provision may be incorporated in the law laying down the principle  
that contract terms must not be unfair. Provisions of this kind are to be  
found in the following laws:
-  the Danish lav/ o f 1974 on marketing p ractices which requires  
general compliance with f a ir  commercial practice;
-  the Luxembourg law of 25 August 1983 on the legal protection of the 
consumer;

5
-  the German law of 9 December 1976 on general conditions of business  
(Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen)  
which lays down that a contract term drawn up by one party and  
placing the other at a disadvantage i s  void i f  i t  i s  in  bad fa ith ;
-  the French law of 1978 on consumer protection and information
providing for the banning, lim itin g  or regulating of contract terms  
which "appear to have been imposed on the consumer as a resu lt of  
the other party’s abuse of h is economic power, givin g that party an  
excessive advantage": such terms are void.
21. A  number of leg a l systems have a black l i s t  of clauses which are  
regarded as p reju d icial to the in ter e sts of consumers; the penalties for  
using such clauses vary:
-  the B ritish  Unfair Contract Terms Act, 1977» renders void clauses  
r e s tr ic tin g  l i a b i l i t y  for economic lo s s , unless the supplier can  
s a tis fy  a court that they are reasonable in  the circumstances; the  
Consumer Transaction (R estriction s on Statements) Order, 1976 (made  
under the F air Trading Act, 1973) makes i t  a criminal offence to  
d isp la y  certain  statem ents, such as "no refund" n o tices, which  
purport to  lim it a consumer’ s righ ts under the general law of  
contract ;
-  the Ir ish  Sale o f Goods and Supply o f Services Act, 1980, contains  
very sim ilar provisions;
-  the German law of 1976 on general conditions lays down a l i s t  
o f prohibited terms and d istin gu ish es between those cases in  which  
some la titu d e  i s  allowed in  assessin g  whether or not a term is  
un fair and other cases where i t  i s  not;
-  the Luxembourg L aw  of 25 A ugust 1983 lists 20clauses which are  
deemed u n fair.
22. Regardless of whether or not leg a l provisions are adopted governing  
the content of contract terms, a b etter balance between the in terests of  
supp liers and consumers can be achieved by negotiations on the drafting  
o f standard terms.
-  The Danish law of 1974 on marketing practices entrusts the consumer  
Ombudsman with the task of promoting compliance with fa ir  commercial  
p ra ctice. To th is  end, he negotiates standard contract terms with  
supp liers or th e ir  trade asso cia tio n s.
-  In the Netherlands in  p articu lar, but also in  Belgium, France and  
Germany (automobile sec to r ), consumer association s have negotiated  
standard contract terms with the representatives of given ind ustrial  
or commercial sectors in  an attempt to  reach a compromise between  
the d ifferen t in te r e sts involved. I t appears th at, with the  
exception of the automobile sector in  Germany, these in itia tiv e s  
have been only moderately su ccessfu l, p artly because there are no  
le g a l constraints in  the event o f a breakdown in  negotiations,  
p a rtly  because supp liers are in  many cases un w illing to p articip ate.
23· Some national laws have introduced s p e c ific  checks on unfair contract  
terms :

6
-  the German law of 1976 e n t it le s  consumer asso cia tio n s and certain  
other bodies to bring actions to put an end to the use o f standard  
contract terms which c o n flic t with the provisions of the law (a  
sim ilar rule appears in  the Dutch draft law);
-  the French law of 1978 set up a commission on un fair terms to  
examine contract terms and determine whether they were lik e ly  ’’to  
create an obvious imbalance between the righ ts and ob ligation s of  
the p a rties, to the consumer’ s detriment". The Commission makes  
recommendations, where appropriate, and sends them to the government.  
I t i s  for the government to  decide whether the recommendations  
should be published.
24· Another approach would " b e  to  require prior authorization to  he  
obtained in  cases in volvin g standard contract terms· A  number o f States  
have adopted th is  approach fo r the insurance secto r. However, the large  
number o f d ifferen t standard contracts -  in  Germany alone, there are  
some 1 ,4 0 0  standard l i f e  assurance contracts and 1 ,5 0 0  standard accident  
insurance contracts -  would seem at f i r s t  sig h t to  rule out any wider use  
o f th is  approach.
25· There have been proposals to  allow  the public a u th o rities to  draw up  
standard terms or a standard contract fo r  a given economic secto r (See, fo r  
example, the Netherlands draft c i v i l  code and the Luxembourg law of 25 A u­
gust 1983.A sim ilar proposal has been made in  Prance in  respect o f tra v el  
co n tr a c ts.) However, because o f the lengthy procedure involved, requiring  
thorough consultation with the relevant in te r e st groups, th is  approach  
would not seem at f i r s t  sig h t to  be lik e ly  to  produce r e s u lts  more quickly  
than the le g is la tiv e  or rule-making approach.
The current le g is la t iv e  p o sitio n  in  the Member S tates
26. Belgium
There i s  no general law on un fair contract term s. S p ec ific  le g is la tio n  
governs only a few types of contract (tran sport, tr a v e l and insurance  
con tracts).
A draft law amending the Law on commercial p ractices o f 14·7*1971 was  
tabled in  1977· The draft contains a general provision on contracts  
concluded with consumers layin g down that any onerous clause causing an  
excessive imbalance between the righ ts and ob ligation s o f the p a r tie s, to  
the consumer’s detriment, i s  void . A  sample l i s t  o f nine types o f clause  
regarded as onerous w ithin the meaning o f the law i s  added. The use of  
certain clauses may be made ob ligatory, or prohibited, by Royal decree.  
Actions to put an end to  infringem ents may be brought in  the event of non-  
compliance with such decrees.
2 7. France
The Law o f 10 January 1978 provides fo r  the p roh ib ition  or regu lation ,  
by decree, of certain  clauses which ’’appear to  have been imposed on the  
consumer as a resu lt o f the other party’s abuse o f h is  economic  
p o sitio n ,g iv in g  that party an ex cessiv e advantage’’. A  commission on un fair  
terms, co n sistin g  o f rep resen tatives o f consumer and trade in te r e s ts ,  
judges, lawyers and c iv il servants, was given the task o f examining models  
o f agreements normally used by supp liers and may recommend the d e le tio n  or  
amendment o f clauses found to  be u n fa ir. The m in ister respon sib le may make  
th ese recommendations pu blic.

7
The commission has to date published three annual reports on i t s  a c tiv ity ,  
for the years 1978, 1979 and 1980. In these reports, the Commission gives  
a broad ou tlin e of i t s  recommendations, ten of which have been made p u b lic-  
for example, No. 80-03 o f 8 August 1980, recommending that terms allowing  
the supp lier, but not the consumer, a "cooling off" period after the  
contract has been made should be elim inated from contracts as being unfair.  
The reports also mention the Commission’s opinions on draft standard form  
contracts.
The commission would lik e  i t s  work, p a rticu larly i t s  recommendations, to  
receive broader p u b licity . It emphasizes that nearly a ll it s  studies have  
been adopted unanimously by i t s  members. It regrets that th is consensus  
has not yet been given p ractical implementation. Although some contract  
terms have been found to be void, in  accordance with leg a l provisions, they  
continue to be used and consumers may be led to believe they are bound by  
them. The commission therefore proposes that criminal penalties should be  
la id  down for those who continue to use these terms in  contracts.
The commission also proposes a number of le g is la tiv e  reforms, aimed at  
improving contract p ra ctices.
Since the entry in to force of the Law o f 10.1.1978, only one decree has  
been issu ed to prohibit or regulate the use of unfair terms (Decree of  
24»3·1978). This decree prohibits three types of contract term, including  
terms givin g the supplier the right to a lte r  the price o rig in a lly  agreed,  
and provided th at, in  certain  circumstances, the purchaser must be informed  
of h is s t r ic t  leg a l r ig h ts. The commission would lik e  to see further  
decrees issued and p ractical proposals made.
2i. Luxembourg
The L a w  of 25 August 1983 on the Legal protection of the consumer lays d o w n  
that "in contracts concluded between a professional supplier of durable or 
non-durable consumer goods or services and a private end consumer, any 
clause or combination of clauses which leads to an imbalance in the rights 
and obligations laid dow n in the contract to the detriment of the consumer 
is unfair and as such shall be deemed null and void". The text also gives 
a limitative list of 20 unfair clauses.
"The chairman of the court of first instance of the applicant's place of 
residence may, at the request of any individual, professional group or co n r- 
sumers' association represented on the Prices Commission, declare that a 
clause or combination of clauses is unfair within the meaning of Articles 1  
and 2  and that such clause or combination of clauses shall be deem ed null 
and void. The action shall be brought and judged in accordance with the 
procedure for matters of special urgency".
The text provides for the posting and publication of the decision and a  
penal fine, and allows the individuals, professional groups and consumers' 
associations referred to above to claim damages before the criminal courts 
in relation to acts which are detrimental to their individual or collective 
interests.
29. Italy
The Italian Civil C ode of 1942 contains three Articles <1341, 1342 and 1370) 
on the interpretation of standard contracts and restricting their use. 
There are no specific checks on unfair terms outside the normal system of 
judicial control.

8
30. The Netherlands
A draft law on terms in standard contracts, which will form part of the new  
civil code, was laid before Parliament in the summer of 1981. It includes  
a general provision to the effect that contract terms shall not be  
unfavourable to the consumer and two lists: a black list of terms which are  
always void and a grey list of terms which may be void,depending on their context.  
The draft law also allows consumer organisations to go to court to request the  
banning of particular terms.
31· Denmark
A law of 1975 amending the law on contracts of 1917 introduced a general  
provision whereby a contract may be set aside in whole or in part where it  
would be unreasonable (urimelig)  or contrary to fair commercial practice  
to allow it to remain.
The law of 14 June 1974 on Marketing Practices established the office of  
Consumer Ombudsman, whose duty is to ensure compliance with fair commercial  
practice and includes the supervision of all contract terms, not merely  
those in consumer contracts.
In recent years a number of laws have been enacted for the protection of  
consumers in the field of financial transactions: the Interest on Overdue  
Payments Act (Ho. 638 of 21 December 1977); the Consumer Contracts Act  
(no. 139 of 29 March 1978); and the law (Ho. 147 of 4 April 1979) amending  
the Sale of Goods Act, 1906.
The Consumer Ombudsman is empowered by the Marketing Practices Act to  
negotiate with suppliers or trade associations to end the use of unfair  
contract terms and other objectionable commercial practices. This procedure  
has worked well in practice.
The Consumer Ombudsman's decisions under the Act cannot be challenged before  
any other administrative body; this gives him effective autonomy in deciding  
which practices are to be regarded as being in conflict with the Act's  
provisions.
The Ombudsman cannot ban practices: if suppliers do not accept his  
recommendations, he may bring an action before the Maritime and Commercial  
Court in Copenhagen which may declare the practices to be void.
32. Federal Republic of Germany
The law on general conditions of business of 9 December I 976 introduced a  
general provision governing terms drawn up in advance by one party,  
banning those which are contrary to good faith (Treu und Glauben) and  
which place the other party (not necessarily a consumer) at a disadvantage.
The law includes two lists of terms deemed to be contrary to these  
principles: one of terms which are void under all circumstances, such as  
terms purporting to shift the burden of proof from the supplier onto the  
consumer; the other of terms whose validity depends on their context  
(Bewertungsspielraum),  such as those allowing the supplier an unusually  
long time to perform the contract. Trade associations and consumers may  
bring actions before the ordinary courts to prevent the use of such terms.

9
33· United Kingdom
The Sale of Goods Act, 1979 1 provides that contracts with consumers for the  
supply of goods shall contain terms requiring, for example, that goods shall  
correspond with their description and be fit for their purpose. The  
contracting parties may not derogate from these provisions.
The Unfair Contract Terms Act, 1977 aims to render ineffective contract  
terms which limit liability for negligence in the event of death or personal  
injury. Where economic loss is involved, any clause which purports to  
limit the liability of one party is void if it does not satisfy the test of  
reasonableness set out in the Act. The ordinary courts are responsible for  
s-Pplyi^S these provisions. To date, however, the superior courts have not  
had the opportunity to rule on their scope.
The Fair Trading Act, 1973, gives the Director General of Fair Trading  
certain powers to examine commercial practices in use and to make appro­
priate pecommendations to the Government. Where appropriate, he may also  
aPPly "k° the courts to obtain a declaration from a supplier that the latter  
will cease an objectionable commercial practice. Finally, the Director  
General may encourage the elimination of certain contract terms through  
codes of conduct negotiated between his office and trade associations.  
Twenty one codes exist at present.
34* Ireland
There are no specific laws governing general conditions of sale and  
delivery. The Consumer Information Act, 1978, set up the office of  
Director of Consumer Affairs, one of whose tasks is to examine commercial  
practices relating to the provision of information on goods or services to  
members of the public. He may, where appropriate, request that misleading  
practices be discontinued and obtain a court order to this effect if  
necessary. It appears that the Director’s work has not so far included  
any examination of unfair terms in contracts used by suppliers.
The Sale of Goods and Supply of Services Act, 1980, prohibits exemption  
clauses excluding certain specific rights which the Act confers on  
consumers. Many of the Act’s provisions are broadly similar to those in  
the British Unfair Contract Terms Act, 1977 and Sale of Goods Act, 1979»
35* Greece
There is no legislation dealing with the specific problem of unfair  
contract terms, nor is it planned to introduce any in the near future.
Ill THE POSITION AT COMMUNITY LEVEL
36.  Paragraph 30 of the Community’s second programme for a consumer  
protection and information policy, referring to the question of unfair  
contract terms, stated that:
"the Commission considers that the first step should be to draft  
a discussion paper in which it will set out all the problems  
which this subject involves and the various options open with  
a view to harmonizing those aspects of competition which may be  
affected by discrepancies in this area".

10
37· Background
It is clearly desirable that, as far as possible, consumers throughout the  
Community should enjoy a high standard of protection against unfair contract  
terms. This aim has not yet been achieved: in those Member States whose  
legislation does not deal with the problem, there is little incentive for  
suppliers to decide spontaneously to abandon the use of such terms. The  
Council, in its Resolutions of 14 April 1975 (l) and 19 May I 98I (2) 
(adopting the preliminary and second programmes respectively), declared  
that:
"the improvement of the quality of life is one of the tasks of the  
Community and as such implies protecting the health, safety and  
economic interests of the consumer".
The fulfilment of this task requires that regional disparities be eliminated  
as far as possible in raising the standard of living, in order to promote  
the harmonious development of economic activities in the Community. This  
indicates that Community action will be necessary.
38. Cross frontier transactions offer a good example of the need for such  
action. One of the main aims of the European Community Treaties is to  
establish and operate a common market with an external customs frontier  
and a single internal market. A common market implies that consumers shall  
be able to make their purchases in the place where they can obtain the most  
favourable terms. While the customs union has not yet been fully  
implemented and the harmonization of fiscal, monetary and technical  
measures is still incomplete, it is clear nevertheless that a large  
number of consumers purchase goods and - to a growing extent - services  
outside their country of residence.' This is particularly true in the case  
of Member States with a common frontier, but it is also an everyday  
occurrence in Member States separated by a stretch of water.
39. T he question therefore arises whether the existence of a genuine 
internal market requires that rules providing the sam e protection to 
consumers in respect of guarantees and after-sales service - including 
protection against unfair contract terms - be largely harmonized. Such a  
m o v e could be a direct benefit to consumers. (It would also avoid 
distortions of competition within the c o m m o n  market of the type envisaged 
in Commission Decision of 23 October 1978 (0J N o. L  322, p. 36 - Zanussi.)
However, one might argue that transparency concerning contract terms is 
sufficient to protect the consumer intending to purchase in another M em ber 
State. Whether such a transparency is feasible to the extent necessary, 
to draw the attention of foreigners to specific elements of the legislation 
of the country of purchase on unfair contract terms, is another question to 
be discussed.
40. Different national standards also m ean that, in practice, the sam e 
standard form contracts cannot be used throughout the Com m unity :  yet a  
Community-wide system would help to spread the cost of consumer protection 
more fairly am ong the Community’s suppliers, and would thus help in 
reinforcing the development of a single internal market.
(1) 0J No. C  92, 25.4.1975, p. 1
(2) 0J No. C  133, 3.6.1981, p. 1

11
41· I t is  hardly surprising, in  the lig h t of what has been said above, that  
both Community programmes should have c lea r ly  brought out the importance of  
the problem of consumer protection in  the f ie ld  of standard contract terms.  
Under the heading "Protection o f the economic in terests of consumers", the  
follow in g p rin cip le i s  la id  downs
"Purchasers of goods or services should be protected against the  
abuse of power by the seller, in particular against one-sided  
standard contracts, the unfair exclusion of essential rights in  
contracts, harsh conditions of credit, demands for payment for  
unsolicited goods and against high-pressure selling methods", (l)
42. Paras 2 4 and 2 5 of the preliminary programme included as "priorities":
"to protect consumers from unfair commercial p ractices, for example  
in  the follow ing areas:
-  terms o f contracts;
-  conditions in  guarantees, p articu la rly  for consumer durables ....
To this end, the Commission will:
- collate the measures already taken by the Member States and the  
studies already made or being made by international organiza­
tions ;
- submit all appropriate proposals to the Council"·
Para 18 la id  down that "th is kind of protection should be ensured by laws  
and regulations which are eith er harmonized at Community le v e l or adopted  
d ir e c tly  at that le v el" .
43« In 1977, the Consumers’ Consultative Committee gave its opinion on the  
question of unfair terms in contracts with consumers. This opinion (doc.  
EHV/ 2 4 0 /7 7  -  CCC/ 4 8 /7 7  Rev. l) may be summed up as follows:
(a)The terms of contracts concluded with consumers must be lawful,  
equitable and easy to understand. Moreover, their wording and  
form must be harmonized.
0 0It was proposed to create an official body authorized to:
- issue prior authorizations for the use of standard terns  
in fields where the consumer is particularly vulnerable  
(for example, insurance, credit, housing);
- adopt, following negotiations with interested circles,  
legislation on standard terms that may be used;
-  prohib it the use of oertain unfair terms.
This body would therefore be entrusted with the task of  
preventing the use of unfair terms in contracts concluded with  
consumers.
(1) Prelim inary programme: para 19(d) -  O J No. C  92, 25.4*1975* P*6 
Second programme: para 28(1) -  O J No. C  133, 3.6.1981, p«7

12
(c) It was considered desirable to draw up a Community list of unfair  
terms whose use was to be prohibited.
(d) Tables should be drawn up setting out consumers' fundamental  
rights in connection with those transactions considered as being  
of greatest importance. These rights should not be capable of  
being waived.
(e) Joint negotiations between consumer and trade associations were  
considered viable only as a supplementary measure.
(f) It was considered essential to define the concept of "unfair  
term". A term should, in particular, be considered unfair if it  
conferred an advantage on a trader or deprived consumers of a  
right so that there was no reasonable balance between the  
parties.
(g) Community action should not be restricted to standard terms but  
should extend also to expressly negotiated terms.
(h) It should be the rule that the use of an unfair term constitutes  
an offence.
(i) Specific rules governing disputes should be adopted.
44. The Commission has not proceeded with work in this field since 1977 >  
owing to commitments in other areas and lack of staff. Meanwhile, the  
European Parliament, in its Resolution on the second programme, has called  
for a directive on unfair contract terms, (l)
45. Article 5 of the Convention on the law applicable to contractual  
obligations of 19 June I 98O (2) provides a definition of a consumer  
contract which could be used in Community action on unfair contract terms:
"a contract the object of which is the supply of goods or services  
to a person ('the consumer') for a purpose which can be regarded  
as being outside his trade or profession, or a contract for the  
provision of credit for that object".
46. The Council of Europe has also been active in this area: Resolution  
Mo. 76(47), containing a Recommendation on unfair contract terms, was  
adopted by the Committee of Ministers on 16 November 1976.
47.  Opportunities for action at Community level
In view of the situation in the Member States, of which six possess  
specific legislation on unfair contract terms and another proposes to  
adopt legisla/tion in the near future (see paras. 26 to 35 above), 
action at Community level should aim at ensuring that consumers throughout  
the Community enjoy a similar high degree of protection against unfair  
contract terms: not only would this be of direct benefit to consumers, but  
it would remove one factor contributing to the distortion of competition  
within the Community. (See para 39 above.)
(1) OJ No. C 291, lO.ll.i 98O, p.35
(2) OJ No. L 266, - 9.lO.i98O, p.l

13
4 8. Any action  to be taken at Community le v e l must, of course, proceed with  
caution. National le g is la tio n  dealing with unfair contract terms is  fa ir ly  
recent, and i t  i s  therefore understandable that Member States may be  
relu ctant to abandon th e ir  chosen approach to  the problem in  favour of a  
Community scheme. C ertainly they w ill wish to  evaluate ca refu lly  the  
operation in  practice of th e ir  own national le g is la tio n  before making such  
a d ecisio n .
However, experience seems to suggest that a sta r t could be made in  evalua­
ting  the operation o f national le g is la tio n : in  Prance, for example, a  
number o f annual reports on the operation o f the law of 1 9 7 8  have already  
been published, as outlined under para 27 above. The Commission cannot,  
th erefore, accept that the problem can be set aside in d efin itely : for the  
reasons set out under 37 to  40 above, Community action against unfair  
contract terms is  e sse n tia l i f  the in te r e sts of consumers are to be  
protected at the same high le v e l throughout the EEC.
49· For Community action  to be taken, a number of questions must be  
answered:
Should action be taken to deal with a ll unfair terms or with unfair
standard terms only? Should i t  be further lim ited to unfair terms
in  standard form contracts?
(a) Arguments in  favour of d ealin g with a ll unfair terms
( i ) The m ajority o f Member States which have approached the  
problem do not d istin g u ish  between standard and non­
standard terms.
( Ü ) I t  may be d if f ic u lt  to define the precise scope o f action  
lim ited  to  standard terms: would i t ,  for example, include  
non-standard contracts containing a sin g le standard term?
(iii) From the s t r ic t  leg a l point o f view, there is  no difference  
between standard and non-standard terms.
00Arguments in  favour o f dealing with standard terms only
( i ) The vast m ajority o f transactions involving consumers are  
eith e r  governed by standard terms or f a l l  w ithin the  
category of on-the-spot transactions, described above in  
para 4(h), to which, sin ce neith er party stip u la tes any  
terms, the lawfs general provisions apply. I t i s , moreover,  
sca rcely  p ossib le to imagine a supplier drawing up a  
com pletely new contract, not containing or governed by any  
standard terms, for every transaction with a consumer. Such  
behaviour would be extremely time-consuming and would be  
econom ically ju s tifia b le  only in  the case o f transactions  
in volvin g large sums o f money: and consumers in  such cases  
are almost always le g a lly  represented.
(ii) There i s  a greater tendency for standard terms to favour  
the su p p lier at the expense o f the consumer. Since these  
terms have been drawn up by, or, more usually, for the  
su p p lier, without the consumer's p articip ation , i t  is  not  
su rp risin g th at they tend to be biased firm ly towards the  
su p p lier. Such terms are more lik e ly , therefore, to be unfair.

14
(o)Arguments in favour of limiting action to unfair terms in
standard term contracts
A Community system for dealing with unfair terms should presumably  
include some kind of "watchdog" or "pre-vetting" arrangement, 
whereby the fairness of contract terms may be checked in advance  
and unfair terms eliminated. It is clear that only a few terms  
will be unfair in all conceivable circumstances: in the majority  
of cases, fairness will depend on the context. If, therefore,  
the "watchdog" system is to be of any real use, and to include  
checking of terms whose fairness depends on their context, it  
must necessarily be limited to standard form contracts only.
5 0.,  Is i t  necessary to draw up a l i s t  o f u n fair terms or should there
rather be a sin g le  clause d efin in g "unfairness"?
To answer this question it is necessary to examine commercial practice.  
Standard contract terms are designed to be used in numberous individual  
cases, so that a contract made with any given individual consumer may  
almost be said to be "mass-produced".
However, the number of standard terms used is extremely high: for example, 
the German Federal Justice Ministry has estimated that some 200,000 to  
300,000 standard terms are in use in Germany. These contracts all vary  
according to the goods or sendees offered to the consumer. They are  
constantly being revised and brought up to date so as to serve the best  
interests of their "manufacturers".
It is generally agreed - by suppliers as well as consumers - that  
contracts should not contain unfair terms, or unfair combinations of  
terms: a general clause defining unfairness should therefore be the more
acceptable solution. It
is, in contrast, extremely difficult in any given contract to isolate an  
unfair term or combination, as each term depends for its significance on  
its context, and an assessment of the value of a general clause defining  
unfairness, as compared with a list of unfair terms, is therefore  
particularly difficult. It ought to be possible to agree on terms which  
should never appear in a contract with a consumer - for example, a term  
excluding the supplier’s liability even in cases of deliberate or  
negligent misconduct. Clearly, however, a list of unfair terms would not  
be very long, given that it is difficult to imagine many terms which would  
be unfair in all conceivable circumstances.
51.Should a "watchdog" system for unfair terms be set up?
For the reasons indicated above, such a system appears necessary, so as  
to allow monitoring of developments in the standard terms area and the  
elimination of terms found to be unfair.
It will not be easy to find a common denominator for the very different  
"watchdog" systems in use in the various Member States. It is unlikely  
that all Member States will be able to agree on the introduction of the  
Danish or British type of system. Such a system, however, would appear  
the most promising, given the resistance by trade interests to any  
attempt to solve the unfair terms problem by a prescriptive list or penal  
sanctions.

15
It would not seem  possible to entrust the task of attacking unfair terms 
to consumer and trade associations alone, as any such action taken by them  
would necessarily be limited to the case in question. Moreover, such an 
arrangement would lack the "generalising" effect which could be achieved 
by examination of standard terms in a  whole industrial sector and 
negotiation with the relevant trade associations, leading to a  general 
review of the standard terms used in that sector.
52. In conclusion, and in the light of what has been said above, tw o m ain 
courses of action seem  possible.
First, a  directive - the normal method of establishing c o m m o n  standards 
throughout the C om m unity - might be drawn up.
Given the fact that national approaches to the problem of unfair terms 
are so different, this could be a cum bersom e approach. However, it might 
be worthwhile discussing the possibilities for agreeing on a  directive or 
any other form of Com m unity legislation laying dow n a basic framework of 
rules to be followed and allowing a very wide discretion to M e m b e r States 
authorities as to h o w  these rules should be implemented.
In this context it might be worthwhile to discuss in depth the possible 
contents of provisions such as :
(a) a general provision defining unfairness, for example, by 
providing that terms conferring an undue advantage on the party 
using them should be void. However, such a provision would not 
necessarily lead to the elimination of unfair terms in practice, 
as it would have to be decided, by a court or som e administrative 
body, whether any given term w as unfair within the meaning of the 
definition. Unless som e system of pre-vetting, of the kind 
outlined in paragraph 5 1  above, were introduced, the consumer w ould 
in practice have to sue, or be sued by, the supplier in order to 
establish the fairness or unfairness of the term;
(b) a black list of unfair, and therefore void, terms would have the 
advantage that unfair terms in contracts could quickly be 
identified. However, as pointed out in paragraph 50, such a  
list would necessarily be fairly short, as few  terms would be 
unfair in all conceivable circomstances. It might include, for 
example :  terms purporting to oust the jurisdiction of the courts; 
terms restricting the supplier's liability for negligence, or in 
case of the death of or personal injury to the consumer; terms 
allowing the supplier, but not the consumer, a  "cooling-off" period 
after the contract's entry into force;
C c ) provisions dealing with possible control and enforcement procedures 
because, even with a black lis t, the problem of enforcement w ould 
remain. Experience in the M em b er States show s that, even where the 
use of a void term or representation has been m ade a criminal 
offence (as in the United K ingdom  and Ireland), traders m ay, through 
ignorance or malice, continue to m ake use of it.
These difficulties could be solved in the case of standard 
form contracts if there were a requirement that their terms 
should be approved in advance, as suggested in paragraph 51.

16
53. A s  an alternative to or in paralLel with a directive it might to be 
possible to achieve som e positive results by non-legislative action. For 
example, discussions might be promoted between consumer organisations and 
trade and industry representatives in various economic sectors, under the 
auspices of a public supervisory authority, with a view to ending the use 
of unfair terms in contracts involving those sectors. This would be the 
equivalent at C om m unity level of the procedures operated successfully in 
D enm ark by the Consum er O m budsm an and in the United K ingdom  by the Director 
General of Fair Trading (described in paragraphs 3 1  and 33 respectively). 
Extending such experiences to the Com m unity would nevertheless be a major 
innovation and would require very thorough preparatory work.
Attention could, as a start, be focussed on products and services which 
are broadly similar throughout the Community, such as motor vehicles, 
bicycles, electrical domestic appliances, radios and television sets, 
cameras and travel. The aim  should be to establish an agreed definition 
of unfairness for each sector, on the basis of which it might be 
possible to draw up a list of unfair terms which should not appear in 
consumer contracts. It might also be possible to regulate the presentation 
of standard form  contracts, so that their terms could more easily be 
compared by consumers.
54. T he aim  of this document is to promote discussion on the issues raised 
by unfair terms in contracts concluded with consumers. The Commission of 
the European Communities invites com m ents from those interested in this 
matter, with a view to the preparation of action at Com m unity level.