The Use of Unfair Contractual Terms as an Unfair Commercial Practice

Abstract

The purpose of the present article is to propose a coordination between the provisions of directive 93/13/EEC (the Unfair Terms Directive, ‘UTD’) and those of the ‘framework’ directive 2005/29/EC (the Unfair Commercial Practices Directive ‘UCPD’), and in particular to assess whether the ‘use of unfair terms’ as meant by the UTD entails and shall be treated by the Member States as an ‘unfair commercial practice’. It is herein argued that the use of unfair terms (as understood by the UTD) will normally entail the constitutive elements of an unfair business-to-consumer commercial practice (as specified by the UCPD), namely a ‘misleading action’, since it will usually amount to the supply of false information or be capable of misleading the average consumer during the performance of the contract as to the parties' rights and obligations arising under the contract, in particular as to rights and obligations literally provided by terms which are legally non-binding on the consumer. Secondly, it is observed that the use of written terms which are not drafted in plain, intelligible language shall always be deemed prohibited pursuant to the UTD, while in those cases entailing a lack of transparency about ‘material information’, as defined by Article 7 of the UCPD, the relevant practice shall also be construed as an unfair commercial practice, namely a ‘misleading omission’. Thirdly, it is attempted to demonstrate that no conflict exists between the provisions of Articles 5 and 7 of the UTD (on one side) and the provisions of the UCPD (on the other side), and that, as a consequence, Member States must ensure that the commercial practices consisting in the use of unfair terms and the use of non-transparent terms are made subject to the national provisions adopted in application of the UCPD. Finally, a recommendation for a better coordination with the UCPD is put forward in relation to the recent Proposal for a Directive on Consumer Rights.