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Protecting consumers from unfair terms in contracts

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Protecting consumers from unfair terms in contracts

Standard contracts define the rights and duties of the parties concerned. However, consumers can sometimes be at a disadvantage. This may be because the contract’s terms have been drawn up solely by the trader or because the obligations it contains are more onerous on the purchaser than the seller.

ACT

Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts

SUMMARY

Standard contracts define the rights and duties of the parties concerned. However, consumers can sometimes be at a disadvantage. This may be because the contract’s terms have been drawn up solely by the trader or because the obligations it contains are more onerous on the purchaser than the seller.

WHAT DOES THE DIRECTIVE DO?

It protects consumers in the European Union from unfair terms and conditions which might be included in a standard contract for goods and services they purchase. It introduces the notion of ‘good faith’ to avoid any significant imbalance in mutual rights and obligations.

KEY POINTS

The goods and services involved, circumstances of the transaction and all the other terms and conditions determine whether a provision in a contract is fair or not.

The actual price paid for goods or services is not taken into account in this assessment, unless the term in question is unclearly drafted.

The directive contains a list of unfair conditions. These include requiring consumers to pay unreasonable compensation or holding them to terms they had no time to fully understand before signing the contract.

The wording of all written contracts must be in plain, intelligible language. When there is doubt about the meaning of a term, it should be interpreted in a manner favourable to the consumer.

Conditions deemed unfair are not binding on consumers, but other terms are valid for both parties if the rest of the contract remains relevant and valid.

EU countries must act to ensure that the necessary measures are taken to prevent unfair terms from continuing to be used in contracts.

Organisations or individuals with a legitimate interest in protecting consumers’ rights may go to court to determine whether a contractual condition is unfair.

WHEN DOES THE DIRECTIVE APPLY?

From 16 April 1993.

BACKGROUND

Unfair contract terms on the European Commission’s website.

REFERENCES

Act

Entry into force

Deadline for implementation in the Member States

Official Journal

Directive 93/13/EEC

16.4.1993

31.12.1994

OJ L 95, 21.4.1993, pp. 29-34

Amending act(s)

Entry into force

Deadline for implementation in the Member States

Official Journal

Directive 2011/83/EU

12.12.2011

13.12.2013

OJ L 304, 22.11.2011, p. 64-88

RELATED ACTS

Regulation (EC) No 2006/2004 of the European Parliament and of the Council of 27 October 2004 on cooperation between national authorities responsible for the enforcement of consumer protection laws (the Regulation on consumer protection cooperation) (OJ L 364, 9.12.2004, pp. 1-11)

last update 22.09.2015

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