CELEX: 51990PC0322
Language: en
Date: 1990-09-03
Title: PROPOSAL FOR A COUNCIL DIRECTIVE ON UNFAIR TERMS IN CONSUMER CONTRACTS

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,                         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
Having regard to the Treaty establishing the European            purchase of goods or services in another Member State;
Economic Community, and in particular Article 100a
thereof,
                                                                 Whereas in order to facilitate the establishment of a
                                                                 single market and to safeguard the citizen in his role as
Having regard to the proposal from the Commission,
                                                                 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
In cooperation with the European Parliament,                     those contracts;
Having regard to the opinion of the Economic and
Social Committee,                                                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
Whereas it is necessary to adopt measures to                     contributing to increased choice for Community citizens
progressively establish the internal market before 31            as purchasers;
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 the Community's programmes for a consumer
                                                                 protection and information policy (') underlined the
                                                                 importance of safeguarding consumers in the matter of
"Whereas national laws of Member States relating to the          unfair terms of contract; and whereas this protection
terms of contract applicable between the seller of goods         ought to be provided by laws and regulations which are
or services, on the one hand, and the purchaser of them,         either harmonized at Community level or adopted
on the other hand, show many disparities, with the result        directly at that level;
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,
                                                                 Whereas in accordance with the principle laid down
notably when they sell in Member States other than their
                                                                 under the heading 'Protection of the economic interests
own;
                                                                 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
Whereas, in particular, national laws of Member States           against one-sided standard contracts and the unfair
relating to unfair terms in contracts concluded with             exclusion of essential rights in contracts';
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         O OJ No C 92, 25. 4. 1975, p. 1,
of services to answer for the performance of them;                   O J N o C 133, 3.6. 1981, p. 1.
 ---pagebreak---  28. 9. 90                             Official Journal of the European Communities                               No C 243/3
 Whereas more effective protection of the consumer can                — it causes to the detriment of the consumer a
 be achieved by adopting uniform rules of law in the                      significant imbalance in the parties' rights and
 matter of unfair terms; whereas those rules should apply                 obligations arising under the contract, or
 to all consumer contracts, whether concluded in writing
 or by word of mouth, and, if in writing, whether by                 — it causes the performance of the contract to be
 means of one document or several;                                        unduly detrimental to the consumer, or
Whereas more effective protection of the consumer can                — it causes the performance of the contract to be
be achieved by adopting rules of law which, in the                        significantly different from what the consumer
 matter of unfair terms, are to apply to all of them;                     could legitimately expect, or
                                                                     — it is incompatible with the requirements of good
Whereas Member States should ensure that unfair terms                     faith.
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         2. The Annex contains a list of types of unfair terms.
terms are so used they will be treated as void, but the
remaining terms will remain valid and the contract shall          3. 'The consumer' means a natural person who, in trans-
continue to bind the parties upon those terms if it is               actions covered by this Directive, is acting for
capable of continuing in existence without the void                  purposes which can be regarded as outside his trade,
provisions;                                                          business or profession.
Whereas it is desirable to identify certain types of terms       4. 'Trade' and 'business' shall be taken to include     the
which must not be used in contracts concluded with                   activities of suppliers, whether publicly owned      or
consumers;                                                           privately owned, and those expressions also cover   the
                                                                     sale, hiring out or other provision of appliances    by
                                                                     those suppliers.
Whereas persons or organizations, if regarded under
national law as having a legitimate interest in the matter,
must have facilities for initiating proceedings concerning       5. The fairness or unfairness of a contractual term is to
terms in contracts concluded with consumers, and in                  be determined by reference to the time at which the
particular unfair terms, either before a court or before an          contract is concluded, to the surrounding circum-
administrative authority which is competent to decide                stances at that time and to all the other terms of the
upon complaints or to initiate appropriate legal                     contract.
proceedings;
                                                                                            Article 3
Whereas the courts or administrative authorities must
have powers enabling them to order or obtain the with-           Member States shall:
drawal from use of offending terms,
                                                                 — 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
HAS ADOPTED THIS DIRECTIVE:
                                                                      prohibition shall be without prejudice to the seller's
                                                                      right to obtain compensation from his own supplier,
                         Article 1
                                                                 — provide that if, notwithstanding this prohibition,
The purpose of this Directive is to approximate the laws,             unfair terms are used in such a contract they shall be
regulations and administrative provisions of the Member               void, and that the remaining terms of the contract
States relating to unfair terms in consumer contracts.                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
                         Article 2                                    provisions.
For the purposes of this Directive:
                                                                                            Article 4
1. A contractual term is unfair if, of itself or in combi-       1.     Member States shall ensure that in the interests of
   nation with another term or terms of the same                 consumers, competitors and the public generally,
   contract, or of another contract upon which, to the           adequate and effective means exist for the control of
   knowledge of the person or persons who conclude the           unfair terms in contracts concluded with consumers and
   firstmentioned contract with the consumer, it is              of the terms of contracts for the sale of goods or services
   dependent:                                                    to them.
 ---pagebreak--- No C 243/4                                Official Journal of the European Communities                                      28. 9. 90
2.    Such means shall include provisions of law whereby                 comply with this Directive not later than 31 December
persons or organizations, if regarded under national law                 1992 and shall forthwith inform the Commission thereof.
as having a legitimate interest in protecting consumers,                 Those provisions shall apply to all contracts concluded
may take action before the courts or before an adminis-                  with consumers after 31 December 1992.
trative authority competent to make a decision for deter-
mination of the question whether the terms used in such
                                                                         The provisions adopted pursuant to the first
a contract are inconsistent with the provisions of this
                                                                         subparagraph shall make express reference to this
Directive.                                                               Directive.
                            Article 5
                                                                         2.    Member States shall communicate to the
Not later than 31 December 1997 the Commission shall                     Commission the texts of the main provisions of national
present a report to the Council concerning the operation                 law which they adopt in the field covered by this
of this Directive.                                                       Directive.
                            Article 6
                                                                                                    Article 7
1.    Member States shall bring into force the laws,
regulations and administrative provisions necessary to                   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,
 ---pagebreak--- 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.