European Business Law, the fourth volume in our series, shows how the European authorities simultaneously abolish all restrictions on access to and exercise of economic activities and support the growth of domestic markets, through the harmonization the internal legislation or the enactment of genuinely unified regulations.

European Business Law

 Regulation No 1215/2012 provides for an independent system of jurisdiction rules regarding “consumer contracts” , initially inspired by the will to protect purchasers in an economically weaker position than sellers . The consumer thus has the possibility to bring proceedings either in the courts of the Member State in which the other party to the contract is domiciled , or in the courts of his ow …

Consumer contracts

 Regulation No 1215/2012 provides for an independent system of jurisdiction rules regarding “consumer contracts” , initially inspired by the will to protect purchasers in an economically weaker position than sellers . The consumer thus has the possibility to bring proceedings either in the courts of the Member State in which the other party to the contract is domiciled , or in the courts of his own domicile, where the seller may only bring proceedings in the courts of the Member State in which the consumer is domiciled (Article 18(1) and(2)). Like for insurance, the voluntary prorogation of jurisdiction is, in principle, prohibited by Article 19, which provides for three similar derogations. It is allowed to include a clause conferring jurisdiction in a consumer contract a) if it is entered into after the dispute has arisen between the consumer and his contracting party, b) if it provides for other jurisdiction options in favor of the consumer/plaintiff or c) if it confers jurisdiction on the courts of the Member State in the territory of which the consumer and the other party to the contract are domiciled at the time of conclusion of the contract, where the law of that State so permits. 

Article 17(1) extends the scope of application of the system of consumer protection to any contract concluded by consumers, in particular where: a) the contract is for the sale of goods on installment credit terms, or b) the contract is for a loan repayable by installments, or for any other form of credit, made to finance the sale of goods, or c) in all other cases, the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer's domicile or, by any means, directs such activities to that Member State or to several Member States including that Member State, and the contract falls within the scope of such activities . 

The concept of “sale of goods on installment credit terms” is to be understood as a transaction in which the price is discharged by way of several payments or which is linked to a financing contract . Article 17(1)(a) tends to protect the purchaser to whom the seller has granted a credit, i.e. where it has transferred to the purchaser possession of the good concerned before that purchaser has paid the whole price. Thus, a transaction in which the agreed price is discharged by way of several payments with transfer of possession and property only taking place after the agreed price has been paid in full, does not constitute a sale of goods on installment credit terms . 

Outside sale by installments, the Brussels Convention only referred to a contract for “the supply of goods or a contract for the supply of services” (Article 15(3)). Now, Article 17 of the regulation applies to all types of contracts  including financial instruments . The contract under which an individual places an order for his personal use on the basis of an offer and in return for a price fixed by a mail-order company, is a contract for the supply of goods, having given rise to reciprocal and interdependent obligations between the parties to the contract . This is also the case in a contract of transport which, for an inclusive price, provides for a combination of travel and accommodation . Applying the consumer rules requires at least a contract: proceedings by which an individual seeks an order, under the law of the Member State in which he is domiciled, that a mail order company award a prize, does not fall within the consumer protection rules where the vendor's initiative was not followed by the conclusion of a contract relating to the supply of a good, even if the mail gave the impression that the award of the prize was only subject to the fact that he returned the “payment notice”, without being subject to order goods, and that the letter also contained a request for a “trial without obligation” . Under the terms of Article 17, the commercial or professional activity must be directed to other Member States, i.e. the trader must have manifested its intention to establish commercial relations with consumers from one or more other Member States, including that of the consumer's domicile. That condition is not met by the mere use of a website by the trader . However, the regulation applies to a contract concluded between a consumer and a professional, which on its own does not come within the scope of the commercial or professional activity “directed” by that professional “to” the Member State of the consumer's domicile, but which is closely linked to a contract concluded beforehand by those same parties in the context of such an activity . The essential condition that the consumer contract is connected with the trader's professional activity directed to the Member State of the consumer's domicile does not presuppose that it is indispensable that the contract has been concluded at a distance .

Article 17 applies to “a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession”. Insofar as it may have different content depending on the national law of the Member States, the concept of “consumer” must be interpreted independently, by reference principally to the system and objectives of the regulation . From the origin, the Court of Justice has specified that the jurisdictional advantage applies only to buyers who are in need of protection, their economic position being one of weakness in comparison with sellers by reason of the fact that they are private final consumers and are not engaged in trade or professional activities . The status of consumer is concretely assessed, by reference to the position of the person in a particular contract, having regard to the nature and aim of that contract, and not to the subjective situation, since the self-same person may be regarded as a consumer in relation to certain transactions and as an economic operator in relation to others. Furthermore, the concept of consumer, which must only be assessed referring to the position of that person in a given contract in relation to the nature and purpose of the contract, cannot depend on the knowledge and information he possesses in a given field . Only contracts concluded for the purpose of satisfying an individual's own needs in terms of private consumption come under the court protection . According to the Court of Justice, although an airline passenger may be considered to be a consumer, the rules of  jurisdiction over consumer contracts do not apply to a contract of transport other than a contract which, for an inclusive price, provides for a combination of travel and accommodation and an airline passenger having simply purchased a ticket for a flight, rather than a travel package, cannot therefore rely on them . The plaintiff who is acting in pursuance of his trade or professional activity may not enjoy the benefit of the rules of jurisdiction reserved for consumers , even if that activity insofar as this is a future activity does not divest it in any way of its trade or professional character . A debtor who has entered into a credit agreement in order to have renovation work carried out in an immovable property which is his domicile with the intention, in particular, of providing tourist accommodation services cannot be regarded as a consumer within the meaning of Regulation No 1215/2012, unless, in the light of the context of the transaction, regarded as a whole, for which the contract has been concluded, that contract has such a tenuous link to that professional activity that it appears clear that the contract is essentially for private purposes . The user of a private Facebook account does not lose his status as a consumer by publishing books, lecturing, operating websites, fundraising and being assigned the legal claims of numerous consumers for the purpose of their enforcement . Furthermore, the regulation only protects a consumer who personally is the plaintiff or defendant in an action: this is not the case for a company acting as assignee of the rights of an individual , a consumer protection organization which brings an action as an association on behalf of consumers  or the assignee of the rights of other consumers who brings a joint action . 

In a contract with a dual purpose - professional and private-, the contracting party may not rely on the provisions for the protection of consumers, unless the trade or professional purpose is so limited as to be negligible in the overall context of the supply, with the fact that the private element is predominant being irrelevant . The person who claims standing as a consumer where he behaved in such a way as to give the other party to the contract the legitimate impression that he was acting for the purposes of his business, renounces the consumer protection rules . 

In principle the court of the domicile of the defendent has jurisdiction, but proceedings brought against a consumer who is a party to a long-term mortgage loan contract which includes an obligation to inform the other party to the contract of any change of address, for breach of his contractual obligations, will be brought in the courts of the Member State in which the consumer had his last known domicile, where they have been unable to determine, in accordance with Article 62 of the regulation, the defendant's current domicile and also do not have any firm evidence allowing them to conclude that the defendant is in fact domiciled outside the European Union .

 Under Article 18(1) of Regulation No 1215/2012, “A consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or in the courts for the place where the consumer is domiciled”. The regulation also applies to the contracting partner of the operator with which the consumer concluded that contract, which has its registered office in the Member State in which the consumer is domiciled . 

Regulation No 44/2001 of 22 December 2000, replaced by the Regulation No 1215/2012, includes in Section 4 of Title II of the Brussels Convention - created following the adoption of the accession convention of 9 October 1978 in order to take into account the progress of consumer law within the various laws of the Member States - but extends its scope of application by referring to contracts other than contracts "for the supply of goods or a contract for the supply of services", only quoted by the Brussels Convention, alongside sale of goods on installment credit terms, loan repayable by installments, or for any other form of credit, made to finance the sale of goods. 

Case 150/77 Ott [1978] ECR 1431, LawLex200900001568JBJ: the jurisdictional advantages laid down in Section 4 of the regulation are reserved only for "buyers who are in need of protection, their economic position being one of weakness in comparison with sellers by reason of the fact that they are private final consumers and are not engaged, when buying the product acquired on installment credit terms, in trade or professional activities". Accordingly, they cannot apply to the sale of a machine granted by a company to another company; Case C-89/91 Shearson Lehman Hutton v TVB [1993] ECR I-139, LawLex200900001205JBJ: the possibility for a consumer to sue the defendant in the courts of the State in which the plaintiff is domiciled, which is justified by the concern to protect the party to the contract deemed to be economically weaker, as a derogation to the principle of jurisdiction of the court of the defendant's domiciled, applies only to cases strictly provided for by regulation by nature clearly hostile towards the attribution of jurisdiction to the courts of the plaintiff's domicile.

Case C-27/02 Engler [2005] ECR I-481, LawLex200900001364JBJ. Along the same lines, Case C-180/06 Ilsinger [2009] ECR I-3961, LawLex201100000648JBJ: Article 17 applies only provided that the proceedings in question relate to a contract concluded by a consumer with a professional. 

Case C-585/08 Pammer [2010] cited above: specifying the evidence on a trader's website establishing whether an activity is 'directed to' the Member State of the consumer's domiciled: the international nature of the activity in question, mention of itineraries from other Member States for going to the place where the trader is established, use of a language or a currency other than the language or currency generally used in the Member State in which the trader is established with the possibility of making and confirming the reservation in that other language, mention of telephone numbers with an international code, outlay of expenditure on an internet referencing service in order to facilitate access to the trader's site or that of its intermediary by consumers domiciled in other Member States, use of a top-level domain name other than that of the Member State in which the trader is established, and mention of an international clientele composed of customers domiciled in various Member States.

Case C-297/14 Rüdiger Hobohm, Judgment of 23 December 2015, LawLex201500001844JBJ.

Case C-190/11 Mühlleitner , LawLex201200002016JBJ.

Case C-269/95 Benincasa v Dentalkit [1997] ECR I-3767, LawLex200900001340JBJ.

Case 150/77 Ott [1978] ECR 1431, LawLex200900001568JBJ.

Case C-208/18 Petruchová v FIBO Group Holdings Limited, Judgment of 3 October 2019, LawLex202000001694JBJ.

Case C-208/18 Petruchová v FIBO Group Holdings Limited, Judgment of 3 October 2019, : a natural person who, under a contract concluded with a brokerage company, carries out transactions on the FOREX market through that company, must be classified as a ‘consumer’ within the meaning of Regulation No 1215/2012 if the conclusion of that contract does not fall within the scope of that person’s professional activity, and factors such as the value of transactions carried out under the contracts, the extent of the risks of financial loss associated with the conclusion of such contracts, any knowledge or expertise that person has in the field of financial instruments or his or her active conduct in the context of such transactions are, as such,  irrelevant for the purpose of that classification.

Case C-464/18 ZX v Ryanair DAC, Judgment of 11 April 2018, LawLex201900000715JBJ; Case C-215/18 Libuše Králová v Primera Air Scandinavia A/S, Judgment of 26 March 2020LawLex202000001658JBJ: an action for compensation brought by a passenger against the operating air carrier with which that passenger has not concluded a contract, does not fall within the scope of the articles on special jurisdiction in respect of consumers contracts, since those provisions necessarily imply that a contract has been concluded by the consumer with the trader in question.

Case C-89/91 Shearson Lehman Hutton v TVB [1993] ECR I-139, LawLex200900001205JBJ. Thus a natural person with close professional links to a company, such as its managing director or majority shareholder does not act outside and independently of any trade or professional activity or purpose  when he gives an aval on a promissory note issued in order to guarantee the obligations of that company under a contract for the grant of credit, and cannot be considered to be a consumer within the meaning of the regulation, see Case C-419/11 Ceská sporitelna v Gerald Feichter, Judgment of 14 March 2013, LawLex201300000367JBJ.

By referring to Article 7(5), Article 17 also allows the plaintiff to sue the contracting party who is domiciled in a Member State but has another establishment in another Member State, in the latter, before the court of the seat of that establishment. The same possibility is given by Article 17(2) to the consumer where his contracting party is domiciled outside the European Union. Where the defendant is not domiciled in the territory of a Member State, the jurisdiction cannot be settled by the regulation, but must be determined by the law of the Member State in the territory of which the referred court is located: Case C-318/93 Brenner and Noller v Dean Witter Reynolds [1994] ECR I-4275, LawLex200900002122JBJ. In that hypothesis Regulation No 1215/2012 would now be applicable by virtue of Article 6(1) which provides that "If the defendant is not domiciled in a Member State, the jurisdiction of the courts of each Member State shall, l, subject to Article 18(1), [...], be determined by the law of that Member State". Article 18(1) provides that "A consumer may bring proceedings against the other party to a contract either in the courts of the Member State in which that party is domiciled or, regardless of the domicile of the other party, in the courts for the place where the consumer is domiciled". 

Case C-630/17 Anica Milivojevic, Judgment of 14 February 2019, LawLex201900001330JBJ. 

Case C-498/16 Schrems v Facebook Ireland Limited, Judgment of 25 January 2018, LawLex201800000205JBJ.

Case C-89/91 Shearson Lehman Hutton v TVB [1993] ECR I-139, LawLex200900001205JBJ.

Case C-167/00 Henkel [2002] ECR I-8111, LawLex200900000666JBJ.

Case C-498/16 Schrems, Judgment of 25 January 2018, cited above: the rules on jurisdiction laid down as regards consumer contracts apply only to an action brought by a consumer against the other party to the contract, and therefore does not apply to the proceedings brought by a consumer for the purpose of asserting, in the courts of the place where he is domiciled, not only his own claims, but also claims assigned by other consumers domiciled in the same Member State. 

Case C-464/01 Gruber [2005] ECR I-439, LawLex200900000942JBJ: it is for the person wishing to rely on the provisions for the protection of consumers to show that in a contract with a dual purpose - professional and private - the business use is only negligible. 

Case C-464/01 Gruber [2005] ECR I-439, LawLex200900000942JBJ: in the context of a contract with a dual purpose where an individual, without giving further information, orders items which could in fact be used for his business, or uses business stationery to do so, or has goods delivered to his business address, or mentions the possibility of recovering value added tax, must, in view of the impression he has given to the other party acting in good faith, be regarded as having renounced the rules for the protection of consumers, even if the business use in the contract in question is negligible.

Case C-327/10 Hypotecní banka (AS) [2011] ECR I-11543, LawLex201300001513JBJ.

Case C-478/12 Maletic, Judgment of 14 November 2013, LawLex201300001586JBJ.

Concretely, Article 17(1)(c) refers to all contracts entered into (with a consumer) by a professional for the purposes of his commercial business, including where it is exercised on the internet.

Case C-99/96 Mietz [1999] ECR I-2277, LawLex200700001833JBJ.

However, Article 17(3) provides that Section 4 does not apply to contracts of transport other than those which, for an inclusive price, provide for a combination of travel and accommodation.

Case C-208/18 Petruchová v FIBO Group Holdings Limited, Judgment of 3 October 2019, LawLex202000001694JBJ, financial contracts for differences (‘CFDs’), which are financial instruments the objective of which is to make profit on the difference between the exchange rates applicable to the purchase and sale respectively of the base currency in relation to the quote currency comes within the rules of jurisdiction relating to consumer contracts.

Case C-96/00 Gabriel [2002] ECR I-6367, LawLex200900001213JBJ: as a result, judicial proceedings by which a consumer seeks an order, pursuant to the legislation of the Member State in which he is domiciled, requiring a mail-order company to award a prize ostensibly won, falls within the consumer protection rules.

Case C-585/08 Pammer [2010] ECR I-12527, LawLex201100000449JBJ.

European Business Law

349. Consumer contracts

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

349. Consumer contracts

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise