Unfair Contract Terms: The European Approach

AuthorMeryll Dean
DOIhttp://doi.org/10.1111/j.1468-2230.1993.tb01890.x
Publication Date01 Jul 1993
LEGISLATION
Unfair Contract
Terms:
The European Approach
Meryll
Dean*
On 5 April 1993 the EC Directive on Unfair Contract Terms was adopted.’ This
is one of the most significant pieces of consumer protection legislation to come from
Brussels and will have a far reaching impact on the United Kingdom law of contract.
Major changes can be expected in the way that the law protects the consumer. In
particular, implementation of the Directive will provide an opportunity to deal with
the inadequacies of the inaccurately named Unfair Contract Terms Act 1977. It should
be noted that in dealing with an area of substantive law, albeit through the mechanism
of consumer protection, the Directive could create a precedent for intervention in
other areas of the law of contract.
Scope
of
the
Directive
The Directive aims to prohibit the use of unfair terms in consumer contracts which
have not been individually negotiated.
Its
scope is stated in Article
1
as being limited
to contracts between a consumer and a seller or supplier (of goods or services).
Article
2
defines a ‘consumer’ as a person acting for purposes outside his trade
or profession and a ‘seller or supplier’ as a natural or legal person acting for purposes
relating to his trade or profession, whether publicly or privately owned. The Directive
does not apply to employment contracts, contracts relating to succession, family
law, or the incorporation and organisation of companies and partnerships. It therefore
applies
to
all other consumer contracts, including insurance contracts (which were
excluded from the scope of the Unfair Contract Terms Act 1977). Since contracts
relating to immovable property have not been excluded from the Directive, it clearly
applies to contracts between the builder of a property and a domestic purchaser.
Although the original proposal included a provision dealing with timeshare contracts,
this has been deleted because the Commission has proposed a draft Directive
specifically covering this problem.* Member States have until
31
December 1994
to implement the Directive, which will apply to
all
contracts concluded on or after
I
January i995.
Background
Consumer protection policy is not expressly dealt with by the EEC Treaty. This
has not impeded limited action by the Community in the past, but with the Single
European Act and the completion of the internal market, it has been moving ever
faster toward a package of legislation aimed at protecting the consumer.3
In
1975
*Lecturer in Law, Sussex University.
1
Directive 93/13 EEC.
OJ
95, 21/4/93,
p
29.
2
COM(92)
220
(final).
3 Package Travel Directive,
OJ
L 158, 13/6/90,
p
59, Draft Directive on Distance Selling,
COM(92)
11
(final).
0
The Modem Law Review Limited 1993 (MLR 56:4, July). Published by Blackwell
581
Publishers, 108 Cowley Road, Oxford
OX4
1JF and 238 Main Street, Cambridge,
MA 02142, USA.

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