By / September 26, 2013

Unfair terms in contracts and EU law: Unfair Terms Directive and Common European Sales Law

‘Standard terms contracts’ are an inevitable part of everyday transactions for both businesses and consumers. Parties using such contracts may,…

© Eisenhans / Fotolia
Unfair contract terms in EU law Unfair Terms Directive and Common European Sales Law
© Eisenhans / Fotolia

‘Standard terms contracts’ are an inevitable part of everyday transactions for both businesses and consumers. Parties using such contracts may, however, rely on their advantageous position in order to impose unfair terms on the other contracting party. This has prompted national courts and legislatures to implement measures aimed at combating such terms. In order to bring about harmonisation of such measures in consumer contracts, the EU enacted the Unfair Terms Directive in 1993. The Commission’s proposal for a Common European Sales Law (CESL) also addresses the issue of unfair terms, not only in consumer contracts, but also in transactions between businesses.

The Directive defines unfairness using broad notions, such as ’good faith’ and ’significant imbalance’. The Court of Justice of the EU (CJEU) has given indications as to the concrete factors which should be taken into account when applying those criteria. The CESL also relies on broad concepts, but it takes into account the Court’s case law fleshing them out.

As to the effects of unfairness and the ensuing duties of the judge, in its case law, the CJEU has repeatedly put emphasis on the effectiveness of enforcement of consumer rights.

Read the whole briefing >> [PDF]

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  • […] A flagship Commission initiative, Common European Sales Law (CESL), soon to be voted in plenary, aims to give European businesses and consumers access to a single, EU-wide set of rules governing sales contracts (see our keysource). Notably, the CESL would extend the protection against unfair terms (hitherto available, under EU law, only to consumers), also to SMEs which, due to a weaker bargaining power, are often forced to accept disadvantageous contract terms. For more details, see our briefing on unfair contract terms. […]

    • Why is an American company eBay Allowed to impose Unfair terms in consumer contracts? I live in the UK,eBay has made it Mandatory for All Sellers to use PayPal a company they own,in my case PayPal Refused to comply with their User Agreement (contract ) I had to take court action against PayPal and won,PayPal then said they did nort want my custom,and would block any attempt I might make in the future to try to open any further accounts,eBay Stated I must still use PayPal before I could sell on their web site,I refuse to use a company that Ripped me Off,so What should I do?

      • Hi I have had to take Count Court action against PayPal for refusing to allow me to close my account,it has been Frozen for 5 Years.I Cannot buy or sell on eBay due to PayPal refusing to Process payments for items I buy and sell on eBay,PayPal are in Comntempt of Court over refusing to reply tp a Court Order.

        • Hi sory to hear about your problems with PayPal,they had seeral Class Actions taken against themselves in America,.it appears they have frioends in High Places?

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