Protection of consumers

The last two decades the European legislator has enacted multiple directives that should lead to a higher level of consumer protection in the individual EU Member States. One of those directives is Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (Directive) that aims to ensure that consumers are not bound by unfair terms in contracts concluded by the consumer with the professional party.

Scope of Directive

The Court of Appeal of Amsterdam asked the Court of Justice of the European Union (CJEU) whether the Directive only applies to contracts of sale (as the terms of the Directive seem to suggest).

The CJEU recently answered that this is not the case (Brusse vs. Jahani, C-488/11).

Article 1(1) of the Directive defines its purpose. There is, however, a degree of discrepancy between the various language versions of that provision.

The CJEU noted that it is settled case law that the need for uniform application of the Directive and, accordingly, for uniform interpretation of a European Union measure requires that that measure be interpreted on the basis of both the "real intention" of its author and the aim that the latter seeks to achieve, in the light, in particular, of the versions in all other official languages.

It appears that, beyond the term used to designate the other party to the contract with the consumer, the legislature’s intention was not to restrict the scope of the Directive solely to contracts concluded between a seller and a consumer.

Conclusion

In the light of the foregoing, the conclusion of the CJEU in the specific case is that the Directive (in principle) also applies to a residential tenancy agreement concluded between a landlord acting for purposes relating to his trade, business or profession and a tenant acting for purposes which do not relate to his trade, business or profession.

The Directive does not only apply to contracts of sale. It is by reference to the capacity of the contracting parties, according to whether or not they are acting for purposes relating to their trade, business or profession, that the Directive defines the contracts to which it applies.