CELEX: 51993PC0011
Language: en
Date: 1993-01-26
Title: Re-examined proposal for a COUNCIL DIRECTIVE on unfair terms in consumer contracts

COMMISSION OF THE EUROPEAN COMMUNITIES
                                         C0M(93) 11 final - SYN 285
                                         Brussels, 26 January 1993
                     Re-examined proposal for a
                          COUNCIL DIRECTIVE
               on unfair terms in consumer contracts
     (presented by the Commission pursuant to Article 149.2(d)
                         of the EEC treaty)
 ---pagebreak---                                           t -
                           E x p I ana t or y itsroor andum
On 15 and 16 December 1992, the European Parliament concluded its second
reading of the proposal for a Council Directive on unfair terms in
consumer contracts and proposed 7 amendments to the common position
adopted by the Council of Ministers on 22 September 1992.
The text of the reexamined proposal clearly incorporates amendments 3 and
5, as well as the spirit of amendment 4. The 17th and 21st recitals have
been modified on the basis of the amendments to the provisions of the
Direct ive.
Amendments 1, 2, 6 and 7 have been rejected by the Commission.
Amendment 3 reintroduces the second general criterion for assessing
whether contract terms are unfair, which had been deleted from the
Commission's amended proposal (March 9 2 ) .
According to this criterion, a term is regarded as unfair if, contrary to
the requirement of good faith, it causes the performance of the contract
to be significantly different from what the consumer could legitimately
expect. Although it could be argued that this situation is, to some
extent, already covered by the criterion contained in the common
position, the inclusion of this second criterion could help to clarify
the meaning of the phrase "unfair term". It also has the advantage of
showing clearly that the requirement of good faith Is not restricted to
the circumstances prevailing at the time the contract is drawn up but
extends to the probable consequences of its performance for the consumer.
Amendment 5 is chiefly concerned with wording. The provision in Article
6(1) of the common position (that unfair terms shall be void) is intended
specifically to ensure that no unfair term may be enforced to the
detriment of a consumer. The precise legal classification (relative or
absolute nullity, non-existence, "voidance", etc.) should be left to the
 legal system in each Member State. It appears that the term "void" is
still not sufficiently neutral. This is why the new wording "not bind the
consumer" has been proposed.
Amendment 4 concerns the legal nature of the Annex and aims to
reintroduce the principle of a "blacklist", in other words a list of
terms always regarded as unfair. However, this is somewhat ill-suited to
the present wording of the Annex, chiefly because of the discret ionary
terms contained in many of its clauses.
Furthermore, the discussions within the Council showed that the majority
of Member States would not readily accept a completely "black" list.
 ---pagebreak---                                    - 3 -
However, the solution envisaged in the common position is not entirely
satisfactory either. The idea of an "indicative" list is too vague to
give a clear indication of the aims. This vagueness would also make the
transposition of this part of the text more difficult.
In view of this, the Commission feels that it would be useful to give the
Annex more specific legal force, and has therefore incorporated the
spirit of amendment 4 by adopting the principle of a list of types of
term presumed to be unfair. Generally speaking, all terms listed can be
presumed to be unfair, but this presumption may be contested by a seller
or supplier who uses this type of term in specific situations.
AI I the other amendments adopted by the EP were rejected by the
Commission.
Amendments 1 and 2 are based on the idea that the word "mandatory" is
used in this case, as it is in civil law, as distinct from
"supplementary", and are thus aimed at eliminating the contradiction
between Article 1(2) and the 13th recital. In fact, there is no real
contradiction because the distinction made in civil law has no relevance
to the way in which the term "mandatory" is used in Article 1(2), where
it has a more general meaning.
Amendment 6 is inadequate for the aims of the Directive. To replace the
obligation on Member States to ensure the existence of "adequate and
effective means ... to prevent the continued use of unfair terms" by the
obligation to "prohibit" unfair terms does not necessarily increase
consumer protection. Furthermore, the discussions within the Council
showed that the word "prohibit" would make it difficult to determine
whether penal sanctions should be imposed. Although the control of unfair
terms by means of penal law may be an effective means of implementing the
Directive, the Commission considers that it is by no means the only
adequate way to eliminate the use of unfair terms.
Finally, Amendment 7 aims to introduce a 14-day "cooling-off" period for
the consumer, following the signing of timeshare contracts. Although a
similar provision was included in the Commission's first proposal, the
Commission has in the meantime presented a specific proposal for a
Directive aimed at providing protection for consumers in relation to
contracts on the use of timeshare property (Com (92) 220 final of
24.7.92).
 ---pagebreak---                                   - 4 -
The proposal for a Directive already incorporates the principle of a
"cooling-off" period, in some cases even longer than that requested by
the European Parliament, while at the same time guaranteeing the consumer
much fuller protection.
Furthermore, Amendment 7 is not now appropriate to the current text of
the common position.
 ---pagebreak---                                    - 5 -
               Reexamined proposal for a Council Directive
                   on unfair terms in consumer contracts
(presented by the Commission pursuant to Article 149(2)(d) of the EEC
Treaty)
Common position of the Council         Reexamined proposal
                   First to sixteenth recitals unchanged
Seventeenth recital                    Seventeenth recital
Whereas, for the purposes of this      Whereas, for the purposes of this
Directive, the annexed list of terms   Directive, a list of terms presumed
can be of an indicative value only     unfair should be provided in an
and, because of the minimal            Annex ; whereas, furthermore.
character of the Directive, the        because of the minimal character of
scope of these terms may be the        the Direct ive. the scope of these
subject of amplification or more       terms may be the subject of
restrictive editing by the Member      amplification or more restrictive
States in their national law;          editing by the Member States in
                                       their national law;
                Eighteenth to twentieth recitals unchanged
Twenty-first recital                   Twenty-first recital
Whereas the Member States should       Whereas the Member States should
ensure that unfair terms are not       ensure that unfair terms are not
used in contracts concluded with       used in contracts concluded with
consumers by a seller or supplier      consumers by a seller or supplier
and that if, nevertheless, such        and that if, nevertheless, such
terms are so used, they shall at       terms are so used, they shalI not
least be declared void as against      bind the consumer and the contract
the consumer, and the contract shall   shall continue to bind both parties
continue to bind the parties upon      upon those terms if it is capable
those terms if it is capable of        of continuing in existence without
continuing in existence without the    the unfair provisions-,
unfair provisions;
 ---pagebreak---                                    - 6
Counc i1's common pos i t i on                 Reexamined proposai
              Twenty-first to twenty-fourth recitals unchanged
                          Articles 1 and 2 unchanged
Art icle 3                               Article 3
1.                                       1.
1. A contractual term which has not      1. A contractual term which has not
been individually negotiated shall       been individually negotiated shall
be regarded as unfair if, contrary       be regarded as unfair if, in spite
to the requirement of good faith, it     of the requirement of good faith:
causes a significant imbalance in
the parties' rights and obligations      - it causes a significant imbalance
arising under the contract, to the        in the parties' rights and
detriment of the consumer.               obligations arising under the
                                         contract, to the detriment of the
                                         consumer
                                         or
                                         - it causes the performance of the
                                         contract to be significantly
                                         different from what the consumer
                                         could legitimately expect.
2.                                       2. unchanged
3. The Annex shall contain an             3. The Annex shall contain a list
 indicative list of the terms which      of terms presumed to be unfair.
may be regarded as unfair.
                           Articles 4 and 5 unchanged
Art icle 6                               Art icle 6
1.                                        1.
Member States shall lay down that         Member States shall lay down that
unfair terms used in a contract           unfair terms used in a contract
concluded with a consumer by a            concluded with a consumer by a
seller or supplier shall, as              seller or supplier shall, as
provided for under their national         provided for under their national
 law, be void as against the consumer     law, not bind the consumer and that
and that the contract shall continue      the contract shall continue to bind
 to bind the parties upon those terms     the parties upon those terms if it
 if it is capable of continuing in        is capable of continuing in
existence without the unfair terms.       existence without the unfair terms.
 ---pagebreak---                                     -t
Council's joint position              Reexamined proposa
2.                                     2. unchanged
                        Articles 7 to 11 unchanged
                             Annex unchanged
 ---pagebreak---          European Parliament amendments rejected by the Commission
                                (Amendment 1)
                             Thirteenth recital
...whereas in that respect the          Deleted
wording "mandatory, statutory or
regulatory provisions" in Article
1(2) also covers rules which,
according to the law, shall apply
between the contracting parties
provided that no other arrangements
have been established;
                              (Amendment No 2)
                                Article 1(2)
The contractual terms which reflect      The contractual terms which reflect
mandatory, statutory or regulatory       statutory or regulatory provisions
provisions and the provisions or         and the provisions or principles of
principles of international              international conventions to which
conventions to which the Member          the Member States or the Community
States or the Community are party,       are party, particularly in the
particularly in the transport area,      transport area, shall not be
shall not be subject to the              subject to the provisions of this
provisions of this Directive.            Direct ive.
                                (Amendment 6)
                                Article 7(1)
The Member States shall ensure that,     The Member States shall prohibit
 in the interests of consumers and of    the use of unfair terms in any
competitors, adequate and effective      contract concluded with a consumer
means exist to prevent the continued     by any person acting in the course
use of unfair terms in contracts         of his trade, business or
concluded with consumers by sellers      profession: this prohibition shall
or  SUPPIiers.                           be without prejudice to the
                                         seller's right to obtain
                                         compensation from his own supplier
                                (Amendment 7)
                    Annex, paragraph 1, indent g)a (new)
                                         in the case of contracts relating
                                         to the purchase of immovable
                                         properties on à timeshare basis,
                                         establishing the date on which the
                                         contract is concluded in such a way
                                         as to make it impossible for the
                                         consumer to terminate the contract
                                         within a period of 14 clear days
                                         from the date on which it was
                                        concluded.
 ---pagebreak---                                                                      ISSN 0254-1475
                                                               COM(93) 11 final
                                                      DOCUMENTS
EN                                                                         10 06
                                 Catalogue number : CB-CO-93-015-EN-C
                                                             ISBN 92-77-51948-7
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