OPINION OF ADVOCATE GENERAL
delivered on 25 September 2003(1)
Freiburger Kommunalbauten GmbH Baugesellschaft & Co. KG
(Reference for a preliminary ruling from the Bundesgerichtshof)
(Interpretation of Article 3(1) of Council Directive 93/13/EEC on unfair terms in consumer contracts – Contract for the building and delivery of a parking space in a car park – Clause reversing the order of performance of the contractual obligations (as regulated by non-mandatory provisions of German
law) in return for the provision of a bank guarantee)
I – Introduction
In this case the Bundesgerichtshof (Federal Court of Justice) has referred a question on the interpretation of Council Directive
93/13/EEC of 5 April 1993 on unfair terms in consumer contracts,
hereinafter referred to as ‘the Directive’. In particular, the Bundesgerichtshof asks whether a specific contractual term
at issue in the main proceedings is to be regarded as being unfair within the meaning of Article 3(1) of the Directive.
This question provides me with an opportunity to examine the scope of the Court’s interpretational function where the assessment
of potentially unfair terms in consumer contracts at issue before a national court is concerned.
As can be concluded from the – as yet limited – case‑law of the Court concerning this Directive, there are reasons for setting
strict limits to this interpretational task, given that the Directive allows the Member States a wide margin of discretion
in deciding which terms they consider unfair within their respective national legal spheres. To construe this interpretational
task broadly would significantly affect this discretion, which – as will become apparent below – was expressly not the intention
of the Community legislature.
In short, it is primarily for the national court to decide whether a clause which is the subject of proceedings before it
is to be treated as being unfair.
II – Legal framework, facts and procedure
The Directive’s essential provisions are set out in Article 3. In so far as relevant, this article reads as follows:
A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement
of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the
detriment of the consumer.
The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair.’
The unfairness of a contractual term is to be assessed by taking into account all the circumstances attending the conclusion
of the contract, as Article 4 of the Directive provides. Terms must be drafted in plain, intelligible language (Article 5).
In accordance with Article 6 of the Directive, unfair terms used by a seller or supplier in a contract concluded with a consumer
are, as provided for under their national law, not to be binding on the consumer.
The Directive has – in so far as here relevant – been implemented in Germany in Paragraph 9 of the Gesetz zur Regelung der
Allgemeinen Geschäftsbedingungen (Law on standard business terms) and in a number of provisions in the Bürgerliches Gesetzbuch
(German Civil Code).
The main proceedings concern a dispute between Freiburger Kommunalbauten GmbH Baugesellschaft & Co. KG, the claimant, on the
one hand, and Ulrike Hofstetter and Ludger Hofstetter, the defendants, on the other.
In the course of its commercial activities, the claimant, which is a municipal construction company, sold to the defendants
by notarial contract of 5 May 1998 a car parking space for DEM 33 700, located in a car park which the construction company
was to build. Under the contract of sale the total purchase price became due upon delivery of a security, but not, however,
before 30 April 1999. In the event of arrears in payment, the purchaser was to pay default interest.
The defendants paid the purchase price only after they had accepted the parking space, free of defects, on 21 December 1999.
The claimant subsequently sought default interest for late payment. On appeal, the Oberlandesgericht Karlsruhe (Higher Regional
Court) dismissed this action. The claimant appealed from the judgment of the Oberlandesgericht to the Bundesgerichtshof.
In the context of this appeal on a point of law, the Bundesgerichtshof has referred the following question to the Court:
‘Is a term, contained in a seller’s standard business conditions, which provides that the purchaser of a building which is
to be constructed is to pay the total price for that building, irrespective of whether there has been any progress in the
construction, provided that the seller has previously provided him with a guarantee from a credit institution securing any
monetary claims the purchaser may have in respect of defective performance or non-performance of the contract, to be regarded
as unfair within the meaning of Article 3(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts?’
In the proceedings before the Court, the claimant and the defendants in the main proceedings and both the German Government
and the Commission have submitted written observations. No hearing was held in this case.
III – Assessment
All of the observations submitted to the Court concern the interpretation of the clause at issue in the main proceedings.
In view of the opinion at which I shall arrive below, I have considered it unnecessary to discuss these observations here,
however valid they may be. In this Opinion, I shall confine myself to discussing the nature of the harmonisation resulting
from the Directive and the consequences which this has for judicial review by the Court.
In its judgment in Commission
the Court drew a distinction between Articles 3 to 6
of the Directive, on the one hand, and the Annex referred to in Article 3(3) of the Directive, on the other.
The Court established that Articles 3 to 6 grant rights to consumers and as such define the result sought by the Directive.
The Court subsequently referred to its settled case-law according to which it is essential that the legal situation resulting
from national implementing measures be sufficiently precise and clear and that individuals be made fully aware of their rights
so that, where appropriate, they may rely on them before the national courts.
The Annex, in contrast, in no way alters the result sought by the Directive which, as such, is required of the Member States.
According to the terms of Article 3(3), the Annex contains an indicative and non‑exhaustive list of terms which may be regarded
as unfair. It is common ground that a term appearing in the list need not necessarily be considered unfair and, conversely,
a term that does not appear in the list may none the less be regarded as unfair.
Consequently, the Court expressly established that the list contained in the Annex to the Directive does not restrict the
freedom which the national authorities have in deciding whether a particular clause is unfair.
From this I conclude that the Community legislature did not intend to bring the decision on the question whether a particular
clause is unfair within the scope of application of Community law. Community law merely establishes the abstract preconditions,
as set out in Article 3 et seq. The most important precondition is laid down in Article 3(1) of the Directive, which provides
that a contractual term may not, contrary to the requirement of good faith, cause a significant imbalance in the parties’
rights and obligations arising under the contract to the detriment of the consumer.
The answer to the question of what type of terms could cause such a significant imbalance has been left to the national authorities.
In the first place, this concerns the national legislature. As also appears from the above, Article 3 et seq. of the Directive
are to be transposed into national legislation. These articles provide a minimum level of consumer protection. The national
legislature may establish measures providing a higher level of protection for consumers, as Article 8 of the Directive makes
clear. In this, the national legislature is free to decide whether, and if so, how, it transposes the Annex into national
legislation. As I explained in my Opinion in Commission
several alternatives are available.
In the second place, an important role is reserved for national civil courts, as the Directive concerns private-law relations
between private individuals.
In my Opinion in Commission
I explained that the Directive permits the national judicial authorities, which also form part of the Member State’s institutional
structure, to offer consumers greater protection. I also referred to the justified observation of the Finnish Government in
that case that in practice it is often precisely the national courts that add to and further define the indicative list in
the Annex to the Directive.
Under those circumstances, the Court’s supervision of the national legislature is limited in nature. The Court has exercised
its supervisory function in two previous cases.
The Océano Grupo
case concerned a failure to transpose the core provisions of the Directive into national legislation. The Court held that
the national court, in accordance with the Court’s settled case-law that in such cases provisions of national law must be
interpreted as far as possible in the light of the wording and purpose of the Directive, must exclude of its own motion the
application of an unfair term conferring jurisdiction upon that – Spanish – national court.
the Court examined whether sufficient account had been taken, within the national legal sphere, of the character of the Annex
to the Directive. As the Court held in that case, the list contained in the Annex to the Directive is of indicative and illustrative
value and constitutes a source of information both for the national authorities responsible for applying the implementing
measures and for individuals affected by those measures. Member States must offer a sufficient guarantee that the public can
obtain knowledge of it. This does not necessitate the use of the instrument of legislation.
In the context of its jurisdiction under Article 234 EC to interpret Community law, the Court may also interpret the terms
of Articles 3 to 7 of the Directive. The question may thereby arise as to whether certain national rules offer the minimum
level of protection required by the Directive.
The jurisdiction of the Court to interpret Community law does not, however, extend to the interpretation of contractual terms
at issue in a specific case before a national court. After all, as I have contended above, this does not involve a question
of Community law.
It would be contrary to the Community legislature’s premiss that it is for the national authorities to answer the question
as to which contractual terms are to be considered unfair if the Community Courts were none the less to assess those terms.
In this regard, I consider it important that the national court should play a central role in ensuring application of the
Directive, albeit, of course, to the extent to which national law enables it to do so.
It must be able to fulfil this role without constantly having to refer to the Court the question whether a contractual term
at issue between the parties in private-law proceedings is to be considered unfair. This is not merely a question of the clear
demarcation of powers as between the Community and the Member States, but also one of the economical use of legal remedies.
Given the general nature of the term ‘unfair’, the multiplicity of terms, both as regards form and content, which currently
appear in consumer agreements could give rise to continual references for preliminary rulings.
Moreover, in this area there is no need for a uniform interpretation of Community law, quite apart from the fact that the
Community legislature has not intended it. The terms in question are relevant only in private-law relations which are to a
significant extent still governed by national law, under which the same type of terms may even have different legal effects
in different national legal systems. From this perspective, the Community legislature acted correctly in confining itself
to establishing a general rule in Article 3 of the Directive which is designed to result in a high level of consumer protection
as provided for under Article 95(3) EC.
IV – Conclusion
On the basis of the foregoing, I propose that the Court should reply as follows to the question referred for a preliminary
ruling by the Bundesgerichtshof:
‘It is for the national court to decide whether the contractual term at issue in the main proceedings is to be regarded as
being unfair within the meaning of Article 3(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer
- 1 –
- Original language: Dutch.
- 2 –
- OJ 1993 L 95, p. 29.
- 3 –
- Case C-478/99 Commission v Sweden  ECR I-4147, particularly paragraph 18 et seq.
- 4 –
- And Article 7, not relevant here.
- 5 –
- Case cited in footnote 3, point 43 of the Opinion.
- 6 –
- See footnote 5.
- 7 –
- Joined Cases C-240/98 to C-244/98 Océano Grupo Editorial and Salvat Editores  ECR I‑4941, especially paragraph 30 et seq.
- 8 –
- Case cited in footnote 3, paragraph 22.
- 9 –
- Unlike in the Océano Grupo case, failure to (adequately) transpose the Directive is not a subject of dispute here.