No C 159/34 Official Journal of the European Communities 17. 6. 91 
However, it is not clear what constitutes a 'substantive' 
change. 
2.2.2.3. The Committee stresses the importance of 
cases where the employee is required to work abroad 
(and not only in third countries). Separate regulations 
might be warranted in such cases and the Committee 
would urge the Commission to clarify this aspect of its 
proposal. 
2.3. Article 3 
The written declaration is not required in cases where 
there is a written contract of employment or a letter of 
appointment or other document referring to a collective 
Done at Brussels, 24 April 1991. 
1. Introduction 
The Committee welcomes the proposal submitted by 
the Commission as it constitutes a major contribution 
to the functioning of the Internal Market for consumers, 
who have a role to play in the economic integration 
process. It is in line with the principles accepted by agreement or to other regulations governing employ­
ment relationships. 
The legal principles and practical implications of this 
provision do not seem sufficiently clear. 
2.4. Article 5 
In view of the differing traditions in the Member States 
with regard to the content of written documents for­
malizing employment relationships, provision could be 
made for each Member State to decide for itself what 
basic conditions should be included in the document 
referred to in Article 2(2) of the proposal and Point 
2.2.1 above. 
The Chairman 
of the Economic and Social Committee 
Francois STAEDELIN 
the Council Resolutions devoted to the Community 
consumer policy (2), as well as with those expressed in 
the European Parliament's Resolution of 21 February 
1986 (3). Opinion on the proposal for a Council Directive on unfair terms in consumer contracts (*) 
(91/C 159/13) 
On 2 October 1990 the Council decided to consult the Economic and Social Committee, 
under Article 100 A of the Treaty establishing the European Economic Community, on the 
abovementioned proposal. 
The Section for Protection of the Environment, Public Health and Consumer Affairs, which 
was responsible for preparing the Committee's work on the subject, adopted its Opinion on 
2 April 1991. The Rapporteur was Mr. Hilkens. 
At its 286th plenary session (meeting of 24 April 1991) the Economic and Social Committee 
adopted the following Opinion by a majority vote in favour and 4 votes against, with 6 
abstentions. 
(») OJ No C 243, 28. 9. 1990, p. 2. (2) OJ No C 92, 25. 4. 1975, p. 1, OJ No C 133, 3. 6. 1981, p. 1 
and OJ No C 167, 5. 7. 1986, p. 1. 
(3) OJ No C 68, 24. 3. 1986, p. 194. 
17. 6. 91 Official Journal of the European Communities No C 159/35 
2. General Observations 
2.1. Objective and limits of the proposal 
2.1.1. The proposal for a Directive on unfair terms 
in consumer contracts introduces the principle of a 
standard for consumer protection against unfair con­
tract terms throughout the European Community. Such 
a standard constitutes indeed a basic requirement for 
the acceptability of a Single European market for con­
sumers, making it possible for the latter to engage in 
cross-border transactions on the basis of some common 
rules and will therefore promote consumer confidence 
in those transactions. 
2.1.2. The Committee accepts that consumer confi­
dence needs an approximated system of regulation of 
unfair terms in consumer contracts but acknowledges 
the fact that it is neither desirable nor the intention of 
the proposal to approximate contract law as such. 
The Committee also points out the limited value of 
approximation of legislative and regulatory provisions, 
and the increased risk of legal uncertainty, both for 
consumers and for suppliers, insofar as, in the area of 
contract law, a priority role is reserved to the courts: 
as a matter of fact, even on the basis of an approximated 
legislative instrument, national Courts will, with regard 
to the development of contract and consumer law in 
the respective Member States, and more generally with 
regard to their legal culture and tradition, construct 
(interpret) differently identical provisions. 
2.1.3. The Committee highlights the importance of 
the regulatory instruments of international law apply­
ing to transfrontier contracts and underlines the fact 
that the Rome Convention concluded on 19 June 1980 
will enter into force on 1 April 1991. 
This Convention, Article 5 of which stipulates that in 
the given circumstances the consumer cannot be 
deprived of the protection afforded by the mandatory 
provisions of the law of the country in which he nor­
mally resides, must be read in conjunction with the 
Brussels Convention of 27 September 1968, Article 14 
of which stipulates in the same circumstances that 
proceedings may be brought against the consumer only 
in the courts of the Contracting State in which the 
consumer is domiciled and that the consumer bringing 
proceedings may choose between the courts in the coun­
try in which he is domiciled and the courts in the 
country in which his opponent is domiciled. 
2.1.4. In order to maximize the practical efficiency 
of this directive, the Committee proposes that the com­
petent authorities of the Member States be obliged to 
set up a system within their jurisdiction which would 
make it possible to notify the Commission of all 
decisions, be they judicial or administrative, taken in application of the implementing provisions of the pro­
posed Directive. Such a system of notification would 
enable the Commission, when preparing the report it 
has to submit on the operation of the Directive, to 
identify sectors or issues where diversity of interpret­
ation is frequent and, if necessary, to propose more 
appropriate formulation of the existing provisions of 
the directive. 
2.1.5. The Committee furthermore stresses the need, 
from the point of view of consumer protection, for 
efficient and collective monitoring procedures. There­
fore, the Committee invites the Commission, with 
regard to Article 4, to specify some obligations for 
Member States to implement effective sanctions. 
2.1.6. The Committee has also considered the major 
role to be assumed by the Court of Justice of the 
European Communities in refining the Community 
notion of unfairness in preliminary rulings requested 
by national Courts. 
2.1.7. However, the Committee is reluctant to accept 
the idea of the creation of a body at European level 
devoted to the monitoring of unfair contract terms, as 
this seems bureaucratic and superfluous with regard to 
existing bodies at national level. 
2.2. Need and impact of a directive on unfair terms in 
consumer contracts 
2.2.1. The directive is intended to restore balance in 
consumer contracts. The explanatory memorandum to 
the proposal consistently describes the numerous im­
balances which characterize consumer and which are 
totally inconsistent with the traditional principle of 
freedom of contract which is based on the assumption 
that the contracting parties have equal bargaining 
power. As equal bargaining power is so often absent in 
consumer negotiations, the proposal for a directive 
seeks to ensure this bargaining power or to rectify the 
imbalances. 
2.2.2. The Committee recognizes the need for a 
European instrument intended to restore some balance 
in consumer contracts. As fear is expressed in some 
circles as to the negative impact of the directive on the 
industrial, commercial and other professional sectors, 
the Committee's reaction is that: 
— the directive will not constitute a major departure 
from the law of contract in nine Member States 
(United Kingdom, France, Germany, the Nether­
lands, Spain, Portugal, Ireland, Denmark, Luxem­
bourg), whose legislations related to unfair contract 
terms contain principles which are very close to 
those of the directive, and which already apply to 
the contracting parties in these States, 
No C 159/36 Official Journal of the European Communities 17. 6. 91 
— the directive will not introduce dramatic changes in 
contract law in the three Member States (Belgium, 
Italy, Greece), where no specific legislation exists, 
as in these countries case-law already, even if some­
times with hesitation, penalizes unfair contract 
terms. 
2.2.3. Therefore, the Committee considers that the 
Directive, rather than introducing new legal principles 
into the national legal systems, constitutes, at least 
partially, an approximation of existing national legis­
lation and practice and harmonizes technical ap­
proaches to the problem of unfair contract terms. 
2.3. Scope of the Directive 
2.3.1. According to the Commission proposal, the 
Directive applies to all consumer contract terms, be 
they standard or individually negotiated. While the 
Committee accepts that the offer, by suppliers, of stan­
dard terms may indeed constitute a potential risk of 
imbalance for consumers, it considers that a different 
treatment should be given by the Directive to individu­
ally negotiated contract terms. Indeed, genuinely nego­
tiated contract terms could be assessed on a different 
basis than standard terms, as the latter reflect situations 
where the risk of imbalance is most acute, while this 
may not be the case for the former. Therefore, the 
Committee invites the Commission to amend Article 2, 
para. 5 of its proposal in order to make it clear that 
the fairness or unfairness of a contract term is to be 
determined by reference to the surrounding circum­
stances at the time at which the contract was concluded, 
and specifically taking into account individually nego­
tiated contract terms. 
2.3.2. However, the Committee recognizes the prob­
lem of proof in case of litigation and the difficulty of 
drawing limits between the notion of standard term and 
individually negotiated term. Indeed the introduction of 
this distinction may give rise to practical problems and 
may make it more difficult for some categories of less 
well informed consumers to be protected against unfair 
terms. Therefore, in case of doubt, a contract term 
would be considered as standard. 
2.3.3. More generally, the Committee calls upon the 
Commission to consider, in the very near future, the 
possibility of prohibiting unfair terms in all contracts, 
whether concluded with consumers or not, taking par­
ticular account of the problems experienced by small 
and medium-sized enterprises (SMEs). 
2.3.4. Intermediaries will, after adoption of the direc­
tive, face the problem of consumers invoking the protec­
tion of the Directive without being able to turn to the 
importer or producer to invoke the same protection. The Committee considers that the drafting of Article 
3, para 1, last sentence, does not allow any legal cer­
tainty for intermediaries and requests that the problem 
be explicitly dealt with in the Directive itself. 
2.4. Formulation of the directive 
2.4.1. The Committee urgently suggests that the 
Commission pay specific attention to the drafting of 
the directive, in order to ensure compliance with legal 
principles and the general balance of the contract. 
2.5. A negative approach 
2.5.1. The approach of the proposal is to prohibit 
unfair terms in consumer contracts. It does not force 
suppliers into any positive obligation towards the con­
sumer. However, to prevent imbalances in consumer 
contracts, it is essential for the consumer to be in a 
position to make himself acquainted with the terms 
which are part of the contract (e.g. through delivery of 
contract form, posters in the shop etc.) and to be 
reasonably put in a position to understand them. 
2.5.2. Therefore, the Committee proposes to include 
in the Directive, and in line with various national legis­
lations or practices, an obligation on the supplier to 
inform the consumer, before contract conclusion, of 
the terms applicable to the contract. This would also 
be of interest in the case of individually negotiated 
terms, so that the consumer could become aware of the 
importance of the derogations to the standard con­
ditions of the supplier. 
2.5.3. The Committee suggests the introduction of 
an additional criterion of unfairness: the non-trans­
parency of a contract term. Howewer, this criterion 
should be drafted so as to allow evaluation on the basis 
of the objective criteria of 'prudent administration', in 
line with the experience developed in this respect in 
several Member States. 
2.5.4. Moreover, a major problem which consumers 
will have to face in the internal market — diversity of 
guarantee and after-sales service — has been tackled 
by the Directive through the prohibition, in the Annex, 
of restrictive terms. The Committee, however, invites 
the Commission to engage, in the very near future, 
in more comprehensive discussions with all interested 
parties in order to assess the need for Community 
action in the field of after sales service and guarantee 
conditions. The problem of lack of consumer confi­
dence in crossborder transactions due to diversity of 
after-sales service and guarantee conditions indeed 
seems to constitute a major barrier to crossborder trade. 
17. 6. 91 Official Journal of the European Communities No C 159/37 
2.6. Minimum or total harminisation? 
The proposal is not explicit about its relationship to 
existing or future national legislations with regard to 
unfair contract terms. The Committee proposes to 
make clear that Member States may in any event main­
tain or adopt legislation which goes beyond the protec­
tion granted by the Directive. 
2.7. Relationship of the Directive to other legislative 
instruments 
The proposal makes no mention of any relationship 
with: 
— other EC legislative instruments which also contain 
references to contract terms and contract content 
(e.g. product liability directive, package tours direc­
tive); 
— international legislative instruments, which exist in 
many fields [e.g. the limitation and restriction of 
third party liability as accepted by international 
conventions under the aegis of the Comite Maritime 
International and the UN Intergovernmental Mari­
time Consultative Organization (IMCO)]. 
It is of prime importance that the relationship between 
these different legislative instruments be made clear. 
2.8. The annexed list of unfair contract terms 
2.8.1. While the Committee acknowledges the Com­
mission's efforts to draft a list which would constitute 
a sufficient basis for a common list of unfair terms 
within Europe, it makes some suggestions to comp­
lement and improve the drafting of the annex. 
2.8.2. The scope of the annex raises several ques­
tions. 
Done at Brussels, 24 April 1991. The Committee takes the view that it must be made 
clear that the annex is non exhaustive and allows Mem­
ber States to adopt more stringent provisions as to the 
terms contained in it. Moreover, it has to be clarified 
whether the annex is absolute (no possibility for a term 
to be exempted from prohibition) or does it still leave 
freedom to the national authorities to assess the con­
tract terms it lists with regard to the context? 
2.8.3. The Committee stresses the need for a system­
atic approach, as the annex concerns both terms which 
concern all types of contracts and terms which concern 
specific contracts, such as timeshare property. Neither 
are the clauses listed in a systematic way, as liability 
questions are found bot in a) and in e), and unilateral 
modification clauses are found in b) and in d). 
2.8.4. The Committee invites the Commission to 
carefully revise the drafting of the different language 
versions of the annex, because many of the notions are 
not sufficiently clear and give rise to major difficulties 
of interpretation. 
2.8.5. Some of the difficulties identified by the Com­
mittee are the following: 
— clause b refers only to credit and debit, 
— the warranty period provided for by clause c (1), 
fifth indent, should take account of shorter periods 
for second hand goods, 
— clause c (2), first indent, should not refer to subjec­
tive assessment, but should refer to a more objective 
assessment, 
— clause d also needs clarification and objective assess­
ment: who is going to decide whether a price 
increase is too great in relation to the contractual 
price? 
The Chairman 
of the Economic and Social Committee 
Francois STAEDELIN