The Consumer's Rights Directive (Week 9)

Ar t i cl es
The Consumer Rights Directive An Assessment of its

Contribution to the Development of European
Consumer Contract Law
ELI ZABETH HALL
*
, GERAI NT HOWELLS
**
and JONATHON WATSON
***
Abstract: Following a turbulent three year legislative process the Consumer Rights Directive
was adopted in October 2011. Less ambitious than the original proposals, the Directive
nevertheless extends the maximal harmonisation approach to a number of aspects concerning
the pre-contractual information duties and right of withdrawal in B2C off-premises and
distance contracts and also introduces other new features to the consumer acquis. The follow-
ing paper focuses primarily on the new European rules concerning pre-contractual informa-
tion obligations and the right of withdrawal. In so doing the authors will demonstrate that in
spite of some of the steps forward, the Directive is overall a conservative consolidation that
also in some respects takes a number of steps backwards. Its contribution to the development
of European consumer contract law is therefore limited, although some of the new measures
show an appreciation of the impact of behavioural economics for the most part it follows a
rather traditional approach.
Rsum: Aprs le processus lgislatif bien charg de ces trois dernires annes, la directive sur
les droits des consommateurs a t adopte en octobre 2011. Moins ambitieuse que les prop-
ositions originales, la directive tend nanmoins lharmonisation maximale un certain
nombre daspects concernant les obligations dinformations prcontractuelles et le droit de
rtractationdans les contrats B2C entre absents ou distance et elle ajoute aussi quelques
aspects nouveaux lacquis des consommateurs. Larticle se concentre dabord sur les nou-
velles rgles europennes relatives aux obligations prcontractuelles dinformation et au droit
de rtractation. En faisant cela, les auteurs dmontreront quen dpit de quelques avances, la
directive nest qu une consolidation conservatrice et est mme en recul sur certains aspects. Sa
contribution au dveloppement dun droit europen des contrats de la consommation est ds
lors limite. En effet, bien que certaines mesures montrent une certaine prise en compte de
limpact de lconomie comportementale, pour la plus grande part, la directive adopte une
approche plutot traditionnelle.
Zusammenfassung: Im Oktober 2011 wurde nach einem turbulenten Gesetzgebungsverfah-
ren die Verbraucherrechterichtlinie verabschiedet. Obwohl sich die neue Richtlinie in weiten
Teilen von dem ursprnglichen Entwurf unterscheidet, erstreckt sich der Ansatz der Vollhar-
monisierung weiterhin auf die vorvertraglichen Informationspflichten und das Widerrufs-
* Lecturer in Law, University of Sheffield.
** Professor of Commercial Law, University of Manchester.
*** Research assistant, Centre of European Private Law, Westflische Wilhelms-Universi-
tt, Mnster. The authors thank Professor Reiner Schulze for his helpful comments
during the drafting of this paper.
Brought to you by | Universiteit van Amsterdam - UVA Universiteitsbibliotheek SZ
Authenticated | 145.18.195.184
Download Date | 12/3/12 5:47 PM
recht in B2C Fernabsatz- und Haustr-Vertrgen, welche den Schwerpunkt des folgenden
Aufsatzes bilden. Zudemwerden einige weitere kleinere Neuregelungen der Richtlinie ange-
sprochen. Imgesamten Aufsatz erlutern die Autoren, dass die neue Richtlinie insgesamt eine
zurckhaltende Konsolidierung bildet und einige Aspekte der Richtlinie eher Rckschritte
darstellen. Der Beitrag der Richtlinie zu der Entwicklung des europischen Vertragsrechts
knnte daher einerseits als beschrnkt angesehen werden, obwohl andererseits die Einbezie-
hung der Verhaltenskonomie neben herkmmlichen Anstzen positiv hervorzuheben ist.
I Introduction
This paper is about the Consumer Rights Directive
1
(Directive; CRD).
Given the amount of controversy and academic commentary on the original
proposal,
2
one might have expected a deluge of commentaries on the actual
Directive. This has not happened. The reason for this is obvious. The orig-
inal proposal made in the light of the Green Paper on the Review of the
Consumer Acquis
3
attempted to incorporate four existing directives. The
major areas of controversy in a scheme seeking to move towards full har-
monisation were sales law (especially remedies) and unfair terms; these have
now been removed, therefore the underlying minimum harmonisation direc-
tives in these areas Unfair Terms Directive
4
and the Consumer Sales Di-
rective
5
continue to remain in force. The remaining areas of pre-contractual
information duties and withdrawal rights mainly seek to bring coherency to
existing rules, which were for the most part introduced by European law
6
1 Directive 2011/83/EUof the European Parliament and of the Council on consumer rights,
amending Council Directive 93/13/EEC and Directive 1999/44/EC of the European
Parliament and of the Council and repealing Council Directive 85/577/EEC and Direc-
tive 97/7/EC of the European Parliament and of the Council OJEC 2011 L 304/64.
2 COM(2008) 614 final. See eg G. Howells and R. Schulze (eds), Modernising and Harmo-
nising Consumer Contract Law (Munich: Sellier, 2009); B. Jud and C. Wendehorst (eds),
Neuordnung des Verbraucherprivatrechts in Europa? (Vienna: Manz, 2009); H.-W.
Micklitz and N. Reich, Crnica de una muerte anunciada: The Commission Proposal
for a Directive on Consumer Rights (2009) 46 Common Market LawReview471519; H.
Schulte-Nlke and L. Tichy (eds), Perspectives for European Consumer Law (Munich:
Sellier, 2010); P. Rott and E. Terryn, The Proposal for a Directive on Consumer Rights 3
(2009) Zeitschrift fr Europsiches Privatrecht 456488 and C. Twigg-Flesner and
D. Metcalfe, The Proposed Consumer Rights Directive Less Haste, More Thought?
3 (2009) European Review of Contract Law 368391.
3 COM(2006) 744 final.
4 Council Directive 93/13/EEC on unfair terms in consumer contracts OJEC L 95/29.
5 Directive 1999/44/EC of the European Parliament and of the Council on certain aspects
of the sale of consumer goods and associated guarantees OJEC L 171/12.
6 In particular, Council Directive 85/577/EEC to protect the consumer in respect of con-
tracts negotiated away from business premises OJEC L 372/31 and Directive 97/7/EC of
the European Parliament and of the Council on the protection of consumers in respect of
distance contracts OJEC L 144/19.
ERCL 2/2012
140 El i z abet h Hal l , Ger ai nt Howel l s and Jonat hon Wat son
and are therefore easier to place on a fully harmonised basis as national
traditions are less affected.
7
Nevertheless, this attempt to bring coherency and structure are important
developments that deserve commentary, not least because they form the bed-
rock on which the proposed Regulation for a Common European Sale Law
8
is
based. It also represents an extension, albeit in a targeted way, of the principle
of maximal harmonisation. However, it also may be viewed as cementing a
rather formal view of the role of information and the right of withdrawal. The
opportunity has not been used to take full advantage of the insights of behav-
ioural economics.
9
This might, for example, have looked to the introduction,
where appropriate, of more personalised information.
10
This is on the one
hand surprising as the Commission has shown great interest in the topic and
has hosted two events on the insights of behavioural economics for consumer
policy,
11
but perhaps it shows the difficulty of legislating for such approaches
in general consumer law. On the positive side, when we consider some of the
new rights granted in the catch all Chapter IV, which has the rather under-
stated heading Other Consumer Rights, we shall see that behavioural eco-
nomics does seem to have played a role. First we turn to consider the infor-
mation duties and right of withdrawal in the Directive.
7 Full harmonisation is not applied fully even in these areas; for example, it does not affect
the application of a payment threshold in off-premises contracts (art. 3(4)); any addi-
tional information obligations for contracts other than distance and off-premises con-
tracts; or national language requirements for pre-contractual information (art. 6(7)).
8 COM(2011) 635 final.
9 C. Sunstein and R. Thaler, Libertarian Paternalism is not an Oxymoron (2003) 70
University of Chicago Law Review 11591202 also their book Nudge (New Haven: Yale
University Press, 2008); S. Bainbridge Mandatory Disclosure: A Behavioural Analysis
(2000) University of Cincinnati LawReview102134; C. Jolls, C. Sunstein and R. Thaler,
ABehavioural Approach to Lawand Economics (1998) 50 Stanford LawReview1471
1550; C. Sunstein (ed), Behavioral Law and Economics (New York: Cambridge Univer-
sity Press, 2000); J. Hanson and D. Kysar, Taking Behaviouralism Seriously: The Pro-
blemof Market Manipulation (1999) 74 New York University Law Review 630749 and
Taking Behaviouralism Seriously: Some Evidence of Market Manipulation (1999) 112
Harvard Law Review 14201572; R. Ellickson, Bringing Culture and Human Frailty to
Rational Actors: A Critique of Classical Law and Economics (1989) 65 Chicago-Kent
Law Review 2355; R. Korbkin and T. Ulen, Law and Behavioural Science: Removing
the Rationality Assumption fromLawand Economics (2000) 88 California LawReview
10511144.
10 O. Bar Gill and F. Ferrari, Informing Consumers About Themselves (2010) 3 Erasmus
Law Review 93119.
11 How Can Behavioural Economics Improve Policies Affecting Consumers? 28 Novem-
ber 2008, Brussels; Behavioural Economics, So What: Should Policy-Makers Care? 22
November 2010, Brussels.
ERCL 2/2012 The Consumer Ri ght s Di r ect i ve 141
II Consumer Information Duties
1 Structure
The pre-contractual information obligations are covered in Articles 58. These
four articles are divided across two chapters: Chapter II, comprising only the
consumer information for contracts other than distance or off-premises con-
tracts a new feature of EU consumer contract law contains Article 5.
Articles 68 of Chapter III cover the ground in the present acquis, namely
the consumer information obligations for distance and off-premises con-
tracts.
12
Despite the consumer information duties only being in four articles, they
involve extensive detailed rules encompassing a total of 64 sub-paragraphs
containing a variety of rules relating, inter alia, to the scope of application,
the content of the information, the point at which the information is to be
given, the burden of proof and formal requirements. Although the Member
States will transpose this Directive in different manners depending on how
their national consumer protection laws are structured,
13
greater transparency
in the form of separate articles pertaining to the different aspects would have
made the labyrinth of provisions easier to negotiate through.
It is striking that the European legislator has not chosen to opt for a more
systematic approach by sampling the new menus devised by teams of academ-
ics.
14
Some lessons might have been learnt from the method adopted in, for
example, the Acquis Principles and the Draft Common Frame of Reference
(DCFR) of using overarching articles,
15
in particular as shall be demon-
strated below on clarity and form of information.
16
Nevertheless, despite maintaining the need to continue to distinguish between
distance and off-premises contracts, rather than the umbrella term of con-
12 The remaining articles in Chapter III cover the right of withdrawal in distance and off-
premises contracts. For criticism of this structure see R. Schulze, The right of with-
drawal, in Schulte-Nlke and Tichy (eds), n2 above, 17.
13 For example, some Member States will integrate the rules into their present civil code, eg
Germany, or into a Consumer code, eg Italy, or in a separate legislation eg the United
Kingdom.
14 In particular, Research Group on the Existing EC Private Law (Acquis Group), Princi-
ples of the Existing ECContract Law(Acquis Principles) Contract II, General Provisions,
Delivery of Goods, Package Travel and Payment Services (Munich: Sellier, 2009); Study
Group on a European Civil Code/Research Group on the Existing EC Contract Law
(Acquis Group) (eds), Principles, Definitions and Model Rules on European Private Law
Draft Common Frame of Reference (Munich: Sellier, 2009).
15 Asuggestion raised in G. Howells and R. Schulze, Overviewof the Proposed Consumer
Rights Directive, in Howells and Schulze (eds), n2 above, 24.
16 Art. 2:204 ACQP; art. II3:106 DCFR.
ERCL 2/2012
tracts negotiated away from business premises,
17
the Directive has at least
attempted in some respects to create a semblance of an overarching structure.
The pre-contractual information duties in the Doorstep Selling and Distance
Selling Directives have been subjected to considerable changes. However, the
possible effects of some of these changes may do more harm than good.
2 Scope of application
A new feature of the Directive vis--vis the present consumer acquis is the
inclusion in Article 5 of an information obligation to be fulfilled by the trader
in a contract other than a distance or an off-premises contract. The obligation
applies in sales and service contracts not concluded in a manner that features
all the required characteristics of either a distance or off-premises contract
(Articles 2(7) and 2(8), respectively).
One may be forgiven in assuming that, due to the heading of this chapter and
this article, this information requirement is rather broad in nature. However,
in considering whether this information obligation indeed applies there are a
number of factors to consider: Firstly, Article 3(3) contains a list of contracts to
which the Directive as a whole does not apply, either due to their subject
matter
18
or the manner in which they are concluded.
19
Although this limits
the otherwise broad application of the general duty, some of the types of
excluded contracts are themselves subject to specific pre-contractual informa-
tion duties.
20
Secondly, Article 5(1) provides that the information in
Article 5(1)(a)(h) need not be provided if it is already apparent from the
context. Unfortunately, here no direction is given as to how this is to be
understood.
21
Lastly, Article 5(3) provides that Member States shall not be
required to apply Article 5(1) to contracts involving day-to-day transactions
performed immediately at the time of their conclusion; however, the Directive,
again, offers no insight as to what constitutes a day-to-day transaction.
In consideration of these exceptions, the spectrum of other contracts to
which this information obligation applies is much narrower than at first
glance. The instances whereby the trader would be subject to this obligation
are, for example, the sale of goods via distance communication, but not within
17 As favoured in the Acquis Principles (art. 5:A-01 ACQP) and the DCFR (art. II5:201
DCFR).
18 Art. 3(a)(k) CRD.
19 Art. 3(l) and (m) CRD.
20 Eg art. 2(d) CRDon financial services (Consumer Credit Directive 2008/48) and art. 2(h)
CRD on timeshare contracts (Timeshare Directive 2008/122).
21 For criticism of this point with regard to the Proposal for a Consumer Rights Directive
(COM(2008) 614 final) see A. Nordhausen-Scholes, Information Requirements, in
Howells and Schulze (eds), n 2 above, 223224.
the scope of an organised distance selling scheme (as required under Ar-
ticle 2(7));
22
or the sale of goods that would not fall under the day-to-day
category eg cars, furniture, computers or contracts which are not performed
immediately at their conclusion.
However, the inclusion of the Article 5 obligation is an example of a rule that
may do more harm than good. Despite this narrow scope of application one
has to also consider that the Unfair Commercial Practices Directive
23
(UCPD)
contains an indirect duty to inform consumers of material information,
whereby the failure to do so may constitute a misleading practice (Article 7(4)
UCPD).
24
Article 3(2) CRD excludes situations covered by EU rules covering
specific sectors, but as a general law such as the UCPD can hardly be said to
govern a specific sector, does Article 5 within its scope impliedly repeal the
conflicting rules under the UCPD, resulting in the lowering of consumer
protection?
Although the Directive strives at full harmonisation, under Article 5(4) the
Member States remain free to adopt or maintain additional pre-contractual
information requirements to such other contracts. As such the article could
be said to display a minimum harmonisation character. In this instance it
would seem the European legislator heeded to academic warnings concerning
the potential impact of full harmonisation of this rule on national contract
laws.
25
Where distance contracts are concerned, a most welcome change is the clar-
ification of the status of auctions concluded online; a subject that was ap-
proached differently in the Member States.
26
Firstly, in contrast to the Dis-
tance Selling Directive, auctions are not included in the list under Article 3 of
contracts excluded from the scope of application of the Directive. As such, the
provisions of the Directive will apply to all auctions, irrespective of whether
22 Although the Member States may decide to extend the rules on distance contracts to
those distance contracts in which this requirement is not fulfilled, cf Recital 13.
23 Directive 2005/29/EC of the European Parliament and of the Council concerning unfair
business-to-consumer commercial practices in the internal market and amending Coun-
cil Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the Euro-
pean Parliament and of the Council and Regulation (EC) No. 2006/2004 of the European
Parliament and of the Council OJEC L 149/22.
24 T. Wilhelmsson, Misleading Practices, in G. Howells, H.-W. Micklitz and T. Wilhelms-
son, European Fair Trading Law (Aldershot: Ashgate, 2006) 148.
25 B. Jud and C. Wendehorst, Position Paper, in Jud and Wendehorst (eds), n 2 above, 192;
Micklitz and Reich, n2 above, 487; Rott and Terryn, n2 above, 467; Redaction Com-
mittee of the Acquis Group, Position Paper on the Proposal for a Directive on Con-
sumer Rights, in Schulte-Nlke and Tichy (eds), n2 above, 167, 172.
26 See, for example, C. Riefa, A Dangerous Erosion of Consumer Rights, in Howells and
Schulze (eds), n2 above, 178179; H. Schulte-Nlke, C. Twigg-Flesner and M. Ebers
(eds), EC Consumer Law Compendium (Munich: Sellier, 2007) 323324.
ERCL 2/2012
they are concluded in an auction house either in person or via telephone, or on
an online auction platform. In the former context, if the consumer attends in
person then there may be information duties under Article 5: presumably, an
auction would not constitute a day-to-day transaction. Here a problem may
arise with the information to be provided about the identity of the trader
does this concern the auctioneer or the trader on whose behalf he is acting?
Nonetheless, providing information about a trader on whose behalf another is
acting is not an information obligation covered under Article 5(1).
27
However,
some light could be shed on this matter by jumping forward to Article 6(3).
Here, in a public auction (as defined under Article 2(13)), the information
about the trader may be replaced by the equivalent details for the auctioneer.
For online auctions or bids made via telephone in a public auction, it would
appear that the Directive makes no distinction. In each case a distance contract
will have been concluded and the information under Article 6(1) will have to
be provided to the consumer. The question then becomes more crucial under
the Directive as to whom is to be considered the trader and therefore subject
to the information obligation though there is also the duty to provide details of
a trader on whose behalf another trader is acting.
3 Information to be given
a) Other contracts
Article 5(1) contains a catalogue of information obligations concerning eight
different subject-matters, each in turn consisting of various different elements.
However, the extent to which the information on these matters is to be pro-
vided is limited by a number of factors: Firstly, the information need not be
provided if it already apparent from the context. Secondly, in some instances
some of the information requirements need not be fulfilled because they are
not applicable either to the subject-matter or the conditions of the contract.
28
Finally, the notion of appropriate information applies to the main character-
istics of the goods and services; what is considered to be appropriate depends
on the manner in which the information is presented and the nature of the
goods or service.
Although Article 5 can be considered a new feature in EU contract law
through the creation of a direct duty, one nevertheless is to bear in mind the
aforementioned list of material information in Article 7(4) UCPD. For the
most part, this material information in the UCPD overlaps in part with the
information in Article 5(1);
29
however there are some deviations that give rise
27 Cf art. 7(4)(b) UCPD.
28 Art. 5(1)(c) CRD on additional freight, delivery or postal charges; (d) on payment and
delivery arrangements.
29 Cf art. 5(1)(a)(d) CRD and art. 7(4)(a)(d) UCPD.
to questions concerning the problem of internal coherency within European
law. For example, there is no requirement under Article 5(b) for the trader to
provide if necessary the consumer with information on the identity and
geographical address of a trader on whose behalf he is acting though failure to
do so might constitute a material omission under the UCPD; however, the
question has been posed above of the continuing validity of this provision. In
any event, the lack of internal consistency at EU level particularly where full
harmonisation is concerned remains a cause for concern.
b) Distance and off-premises contracts
The information to be given in distance and off-premises contracts is covered
in Article 6(1). This article consists of 20 different points of information, each
of which contains further details as to the information to be given. This ex-
tensive catalogue of information that is to be given in distance and off-prem-
ises contracts also forms an integral part of the contract.
30
The new informa-
tion requirements represent a monumental change to the information
requirements for doorstep selling (previously limited only to information
on the right of withdrawal
31
), but also expands upon the catalogue of infor-
mation to be provided under the Distance Selling Directive.
32
The catalogue of information under Article 6(1) can be divided into manda-
tory and relevant information, though in both instances the information pro-
vided forms an integral part of the contract and cannot be altered absent
express agreement (Article 6(5)). Mandatory information concerns the infor-
mation that always has to be given, irrespective of the subject-matter or terms
of the contract. Such information covers, for example, the main characteristics
of the goods or services, the identity of the trader and contact information, the
total price and other costs, information on delivery and payment arrangements
and a reminder of the existence of the legal guarantee.
33
Fortunately, some
consideration was given to the structuring of this catalogue so that mandatory
information is given at the beginning and in what could perhaps be described
as a hierarchy of importance. Whether aside from the mandatory informa-
tion other information under Article 6(1) is to be given depends upon its
relevance to the particular contract to be concluded. Sometimes the duty only
arises if there is something to inform about ie if there is a complaint handling
policy, after-sales service and commercial guarantees or relevant codes of con-
duct.
34
For example, if the contract concerns the sale of computer software, the
30 Art. 6(5) 5 CRD; for criticism of this term see Nordhausen-Scholes, n21 above, 225.
31 Art. 4 of Directive 85/577/EEC.
32 Art. 4(1) of Directive 97/7/EC.
33 Art. 6(1)(a)(e) and (l) CRD.
34 Art. 6(1)(g), (m) and (n) CRD.
ERCL 2/2012
trader will have to provide information on the right of withdrawal,
35
the
functionality
36
(ie how the content can be used
37
) and the interoperability
38
(ie compatible hardware and software required in order for the content to
function
39
).
The aforementioned example serves also as an illustration of some of the new
additions to the items of pre-contractual information compared to the Dis-
tance Selling Directive. In general, there has been an overhaul of the previous
pre-contractual information duties. This is to be expected from a full harmo-
nisation directive, as the European legislator has gone to much greater lengths
to define the content of the rules, trying to leave no stone unturned, although it
unfortunately did not go to the same lengths to define some of the terms used,
despite their relevance for full harmonisation,
40
for example identity of the
trader and the loose example of such as the trading name (Article 6(1)(b)). It
is important to emphasise that with this extensive list of information it would
appear that the European legislator has set in stone what it considers to be the
information a consumer requires when concluding an off-premises or distance
contract, although according to some commentators, other aspects such as
the languages available for conclusion of the contract could have also been
included.
41
Despite the full harmonisation one has to bear in mind that the
catalogue of information stipulated in the Directive for distance and off-prem-
ises contracts cannot be expanded upon by the Member States; this of course
does not prevent traders from giving additional information that may be rel-
evant for the contract.
42
Particularly where newsales methods and newtechnologies are concerned in
particular the purchase of so-called apps for mobile devices it is important
that the rules are sufficiently future-proof to cover as many eventualities as
possible. Only time will tell how effective the rules of the Directive are at
withstanding the rapid expansion of the products in the digital goods market.
Nevertheless, although the full harmonisation of the pre-contractual informa-
tion duties was an important step in removing a barrier to access to the internal
market for traders, the absence of some rules (eg on language) together with an
ever-evolving array of products and services does raise the question whether
35 Art. 6(1)(h)(k) CRD.
36 Art. 6(1)(r) CRD.
37 Recital no 19.
38 Art. 6(1)(s) CRD.
39 Recital no 19.
40 Underlining the importance of clear definitions for full harmonisation see Redaction
Committee of the Acquis Group, n25 above, 168.
41 Micklitz and Reich, n2 above, 488; Rott and Terryn, n2 above, 467; Redaction Com-
mittee of the Acquis Group, n25 above, 172.
42 Art. 3(6) CRD.
the full harmonisation of the rules rather in spite of such a large catalogue of
information favours the trader than the consumer, whom the duties are
intended to benefit.
43
4 Timing
In general, the information is to be provided to the consumer before he is
bound by a contract or any corresponding offer. The information is therefore
always to be provided prior to the acceptance of the offer, but need not neces-
sarily be provided before the offer has been made unless the offer is one made
by the consumer to which they are bound. However, there are some variations
to this general rule.
a) Distance contracts
Other aspects regarding the timing of particular information in distance con-
tracts also feature in the Directive under Article 8 (formal requirements). The
timing of such information is influenced by the manner in which the distance
contract is concluded; as this can take place in a number of different forms (eg
telephone, fax, letter, e-mail etc) it is only to be expected that there are specific
rules tailored to accommodate the particular characteristics of the modes of
contract formation.
Firstly, in a contract concluded by electronic means
44
the consumer is to be
made aware directly before he places his order of the information con-
cerning the main characteristics of the product or service, the total price and
other charges, the duration of the contract and conditions for its termination
(where applicable) and the minimum duration of the consumers contractual
obligations (where applicable).
45
The requirement of directly places his or-
der appears to suggest that the information is to be given immediately before
the consumer clicks on the order button. Therefore if the Article 6(1) in-
formation has been given some time in advance there may in any event be a
need to give this key information again to meet the requirement of immedi-
acy. The problem is that the trader may not know when a consumer will place
the order, if say it is placed by e-mail. Where it is placed through an online
ordering form there is an easier opportunity to ensure the immediacy re-
quirement is met. Furthermore, Article 6(2) also features a new addition to
pre-contractual information obligations: the consumer is also to be made
43 Twigg-Flesner and Metcalfe, n2 above, 371.
44 The CRD does not define electronic means; however, a definition does feature in
art. 1(2) of Directive 98/34/EC on Information Society services.
45 Art. 6(2) CRD.
ERCL 2/2012
aware, when placing his order, that the order he makes implies an obligation
to pay.
46
Secondly, if the consumer purchases the good or service via an internet site, he
is to be given at the beginning of the ordering process information on any
delivery restrictions (eg countries to which the trader does not deliver) and the
accepted means of payment (eg which credit card, debit card etc). However,
clarification is required with respect to when the ordering process is consid-
ered to begin: is the information to be given before the individual goods are
placed in the virtual shopping basket or only once all the goods have been
selected and the transaction can be completed? If it is the latter, considerable
inconvenience could be caused to a consumer who may have spent time and
money selecting goods to purchase only to be informed much later on that the
transaction cannot be completed.
Thirdly, Article 8(5) provides that when calling a consumer with a view to
concluding a distance contract a trader is to disclose at the beginning of the
conversation his identity or the identity of those on whose behalf the call is
being made. One might see some debate about what was meant by the begin-
ning, but one can imagine a strict approach will be taken to prevent consumers
being lured into a discussion before realising they are being sold a product or
service.
5 Formal requirements
In general, the information is to be provided in a clear and comprehensible
manner.
47
Recital 34 in the preamble to the Directive offers an interesting
insight into how this particular formal requirement can be fulfilled: in provid-
ing the information the trader should take into account the specific needs of
consumers who are particularly vulnerable because of their mental, physical or
psychological infirmity, age or credulity in a way which the trader could
reasonably be expected to foresee. Especially in contexts such as in other
contracts besides distance and off-premises selling where there are no stand-
ards for requiring the information to be provided in writing (eg plain and
intelligible language), the comments in the recital may be particularly helpful
in assessing any information provided only orally.
a) Distance and off-premises contracts
Articles 7 and 8 of the Directive contain separate specific formal require-
ments for each of these contracts. However, there are some overarching
46 See below II 6 b) for criticism.
47 Art. 5(1), 6(1) CRD.
features that will be discussed before the variations are discussed in more
detail below.
In both distance and off-premises contracts, the information under Article 6(1)
is to be provided in a clear and comprehensible manner.
48
In addition, the
information on the right of withdrawal in points (h), (i) and (j) of Article 6(1)
may, in both distance and off-premises contracts, be provided through the use
of the model instructions on withdrawal.
49
This is a newand welcomed feature
of the Directive which is beneficial to both consumers and traders.
50
However,
although the Directive in this instance removes an obstacle for traders, it does
not remove all obstacles posed by diverging national rules: Article 6(7) pro-
vides that the Member States may maintain or introduce in their national law
language requirements regarding the contractual information so as to ensure
that such information is easily understood by the consumer. Nevertheless, the
full harmonisation of the formal requirements will lead to a removal of the
specific measures imposed by some Member States to ensure that particular
information is provided in a specific format, for example, the Belgian require-
ment that such information be on the first page of the contract in bold or the
United Kingdom rule that the cancellation notice be in a separate box.
51
b) Distance contracts
In addition to the overarching requirements mentioned above, the Directive
also contains other formal requirements applicable in distance contracts; aside
from the requirements in Article 6(1), (4) and (7), the formal requirements for
distance contracts are to be found in Article 8. Article 8(1) contains the formal
requirements that are generally applicable. The information is to be made
available in a way appropriate to the means of distance communication and
in plain and intelligible language. If the information is on a durable medium
52
it
is to be legible. It can be seen fromthis article that there is a clear recognition of
the limitations posed by the various means of distance communication, yet
that it is nevertheless possible to filter out common features.
Unfortunately, the relative simplicity presented by Article 8(1) is lost where
contracts concluded by electronic means are concerned. For such contracts the
48 Art. 6(1) CRD.
49 Art. 6(4) CRDrefers to the use of the model instructions on withdrawal set out in Annex
I(A). The information requirements concerning withdrawal will be satisfied if the trader
fills out the form correctly.
50 Rott and Terryn, n2 above, 471.
51 For example, the specific requirements concerning information on right of withdrawal;
eg art. 79(1)(2) Belgian Trade Practices Act; s 7(5)(a) The Cancellation of Contracts made
in a Consumers Home or Place of Work etc Regulations 2008, SI 2008 no 1816.
52 As defined in art. 2(10) CRD.
ERCL 2/2012
following formal requirements are applicable in addition to the general re-
quirement in Article 8(1): clear and prominent manner (Article 8(2)); easily
legible manner and unambiguous formulation (Article 8(3)); clearly and
legibly (Article 8(3)). Although these requirements emphasise the importance
of the underlying policy behind such specific requirements,
53
they do however
raise some questions as to their meaning. What is, for example, the difference
between easily legible and legible? Can easily legible be equated with
clear and prominent? Is plain and intelligible language a lower standard
than unambiguous?
54
It can of course be questioned whether the need to
cater to the variations in means of distance communication inevitably leads
to different standards; however, as we assume no difference is intended there
could nevertheless have been a greater degree of terminological consistency.
One can also observe an unusual paradox: although the formal requirements
are intended to give the consumer certainty as to the transaction, the require-
ments create uncertainty for those who must adhere to them.
c) Off-premises contracts
In keeping with this inconsistent approach, despite the continuous use of
distance and off-premises contracts the formal requirements for off-premises
contracts precede those for distance contracts. As can be expected for off-
premises contracts, there is no need for a multitude of different rules. The
requirements are simply clear and comprehensible manner (Article 6(1)) and
on paper, or another durable medium if the consumer agrees (Article 7(1)).
Furthermore, the information is to be legible and in plain, intelligible language
(Article 7(1)). Again, these latter requirements could have been contained in
one provision la the clarity and form of information provision in the
DCFR
55
and Acquis Principles.
56
6 Consequences of failure to inform
a) Other contracts
The Directive does not stipulate the consequences of a breach of the informa-
tion duties in other contracts. It is for the Member States to provide effective,
proportionate and dissuasive penalties.
57
In contrast to the information re-
53 See eg Recital 39 CRD.
54 Similar criticism was also raised with regard to the Proposal for the Directive, Redaction
Committee of the Acquis Group, n25 above, 159160.
55 Art. II3:106 DCFR.
56 Art. 2:204 ACQP.
57 Art. 24 CRD.
quirements in distance and off-premises requirements, the Directive does not
stipulate that there is a reversal of the burden of proof in other contracts.
b) Distance and off-premises contracts
The Proposal for the Consumer Rights Directive was seen by some authors as
an opportunity to harmonise the remedies in European contract law for
breaches of pre-contractual information duties.
58
Despite suggestions of pos-
sible remedies,
59
the European legislator has nevertheless opted for the (di-
verse) regulation at national level.
60
However, at least in one respect there is
harmonisation: under Article 6(9) the burden of proof of compliance with the
information requirements is on the trader.
However, for some specific types of information the European legislator has
foreseen for distance and off-premises contracts a variety of different conse-
quences: the consumer is not to bear costs or charges of which he is not
informed;
61
an extension of the withdrawal period if the consumer is not
provided with information on his withdrawal right;
62
and no cost for the
consumer of returning of the goods if the trader has not informed the con-
sumer thereof.
63
Such consequences are applicable in both distance and off-premises contracts;
however, the Directive has also introduced a specific remedy in contracts
concluded by electronic means: if the trader does not comply with his obli-
gation under Article 8(2) to inform the consumer that the placing of the order
implies an obligation to pay, the consumer is not bound by the contract or
order.
64
One could of course view this rule as a means of preventing a con-
sumer from being deceived into concluding a contract with a trader and in-
curring costs; therefore the information obligation is to be welcomed from the
perspective of consumer protection. However, the rule does raise a number of
questions. Beginning with the precise nature of the consumers order is it to
be considered an offer, or is to be viewed as an acceptance? The phrase placing
the order entails an obligation to pay appears to suggest that it is to be viewed
58 Twigg-Flesner and Metcalfe, n2 above, 381.
59 Eg art. 2:208 ACQP and art. II3:109 DCFR.
60 For examples of national sanctions in relation to the Doorstep Selling and Distance
Selling Directives see Schulte-Nlke, Twigg-Flesner and Ebers, n26 above, 9697 and
336339.
61 Art. 6(6) CRD.
62 Art. 10(1) CRD.
63 Art. 14(1) CRD.
64 For criticism of this rule see H. Eidenmller, N. Jansen, E.-M. Kieninger, G. Wagner and
R. Zimmermann, Der Vorschlag fr eine Verordnung ber ein Gemeinsames Europ-
isches Kaufrecht (2011) Juristenzeitung 277.
ERCL 2/2012
as the latter, which does not accord with the view held in some Member
States.
65
The latter question raises the issue of the actual consequence of breach. If the
order can be perceived as an acceptance, does the trader, in the event of
breach, nevertheless have to fulfil his contractual obligations and the consumer
may keep the goods he receives without charge in other words, if I dont tell
you that you have to pay, you dont? Or, if the consumer is not bound by the
order, does this therefore mean that the order, ie the offer, is non-binding and
no contract is concluded? An affirmation to the former question is clearly very
favourable to the consumer in those circumstances in which the order is con-
sidered an acceptance. However, if the consumer is not bound by the order
as his declaration of contractual intent and no contract been concluded, yet
performance has been effected, the rule would most likely be more disadvanta-
geous to the consumer, as under the applicable national law of restitution, he
would probably have to bear the cost of returning what he has received,
whereas the trader will merely have to return any payment that has been made.
Clarification of the meaning of this vague clause is therefore imperative, es-
pecially as it may lead, ironically, to diverging levels of consumer protection if
Member States apply it in different ways despite the use of full harmonisation.
7 Post-contractual information duties
The information duties to be fulfilled by the trader are not limited to pre-
contractual duties. On the contrary, the trader is also subject to post-contrac-
tual obligations that are regulated in the Directive, though only in the context
of distance and off-premises contracts.
In off-premises contracts the consumer is to be provided with a copy of the
signed contract or the confirmation of the contract.
66
This has to be on paper
or, with the express consent of the consumer, on another durable medium.
Article 7(2) does not stipulate the content of the confirmation, which bizarrely
is only discovered on reading Article 7(4)(a) (in the context of performance of
services). This states the confirmation of the contract is to contain all the
information in Article 6(1). In contrast the equivalent rule to Article 7(2) for
distance contracts, Article 8(7), describes the content of the confirmation. In
addition, the Directive does not stipulate when this obligation is to be fulfilled
in off-premises contracts; whereas in distance contracts the confirmation of
the contract that has been concluded is to be provided at the latest at the time
of delivery or provision of the services.
67
65 Eg United Kingdom where it is viewed as an invitation to treat, see L. Hoffmann and E.
Macdonald, The Lawof Contract (7
th
ed, Oxford: Oxford University Press, 2010) 2122.
66 Art. 7(2) CRD.
67 Art. 8(7)(a) CRD.
8 Summary
The pre-contractual information duties in consumer contracts have developed
considerably since the Doorstep Selling and Distance Selling Directives. The
evolution of the European Union, in both a political and social sense, together
with rapid advances in electronic sales methods and an increased variety of
goods and services, have meant that a legislative reply to these demands was
necessary, in particular to protect consumers. The pre-contractual informa-
tion duties in the Directive serve as a response to these demands by introduc-
ing new and innovative features designed to increase the level of consumer
protection; however, at the same time raising questions as to the precise
meaning and implications of the rules. The lack of clarity concerning the
meaning of particular terms and concepts, as well as their fully harmonised
nature, is problematic and may pose more obstacles to trade than originally
intended.
It is difficult to deny that at European level the Directive raises the level
of consumer protection in distance and off-premises contracts. It probably
also does not lower the protection significantly vis--vis national law of any
Member State. However, as can be seen from developments in recent years,
full harmonisation may still pose a risk for consumer protection. Although
an extensive, detailed catalogue of information is to be provided to the
consumer, nevertheless there are some gaps that remain or more impor-
tantly some gaps could emerge in the years to come. In this respect, full
harmonisation does not favour the consumer; one can only hope that the
European legislator reacts quickly enough to meet the demands of the mar-
ket.
Furthermore, although the Directive will hopefully not feature in national
legislation with its present structure, it nevertheless highlights the problem of
inconsistency within the present acquis. In some respects, it could be consid-
ered unfortunate that the academic DCFR was not used as a toolbox; in so
doing some of the unusual structural aspects may have been avoided, creating a
clear and comprehensible framework for the national legislators.
III Right of Withdrawal
Full horizontal harmonisation of the rules on the right of withdrawal in dis-
tance and off-premises contracts has been introduced in an attempt to address
barriers to cross-border trade and legal fragmentation existing as a result of the
rules in the minimum harmonisation Doorstep Selling and Distance Selling
Directives. The remaining provisions in Chapter III of the Directive set out
the duration and start of the withdrawal period (Article 9), extension of the
withdrawal period for failure provide information on the right (Article 10),
ERCL 2/2012
exercise of the right (Article 11), the effects of withdrawal on the obligations of
the trader and the consumer (Articles 12, 13 and 14) and on ancillary contracts
(Article 15), and the exceptions to the right (Article 16).
The function of the right of withdrawal is to allow the consumer in a distance
sale the opportunity to test and inspect goods which he is not able to see when
contracting; whereas in an off-premises sale the right is provided because of
the potential surprise element and/or psychological pressure.
68
Thus the ra-
tionale for the right in distance sales is information asymmetry, whilst for off-
premises sales the rationale is the potential for a psychological deficit
69
which
may interfere with the consumers ability to make a rational decision.
70
In this
part, the attempt to standardise the rules and to increase legal certainty for
both consumers and traders is reviewed in the light of the objective of a high
level of consumer protection
71
and the appropriate balance between consumer
and trader interests. It is concluded that the Directive has to some extent been
successful in harmonising rules on the duration and exercise of the right: in
other areas legal certainty is only partially achieved and at times appears to
come at the expense of consumer protection.
1 Harmonisation of the duration, start and limitation of
the withdrawal period
The need for certainty is most clearly expressed in respect of the duration of
the withdrawal period, when it starts, and any extension of the time limit for
exercising the right for breach of information duties.
72
68 Recital 37. There is an extension of the right of withdrawal compared to the Doorstep
Selling Directive, which applied to unsolicited contracts made away frombusiness prem-
ises. The extension to solicited contracts had already been adopted in five Member States,
see Schulte-Nlke, Twigg-Flesner and Ebers, n26 above, 91, and most recently, the UK.
See H. Eidenmller, Why Withdrawal Rights? (2011) European Review of Contract
Law 1, 4 for criticism of the extension to solicited off-premises contracts without any
evidence of critical reflection by the Commission. Recital 21 explains an off-premises
contract should include where the consumer may be under potential psychological
pressure or may be confronted with an element of surprise, irrespective of whether or
not the visit is solicited.
69 E. Terryn, The Right of Withdrawal, the Acquis Principles and the Draft Common
Frame of Reference, in R. Schulze (ed), Common Frame of Reference and Existing
EC Contract Law (2
nd
ed, Munich: Sellier, 2009) 147.
70 Eidenmller, n68 above, 3, distinguishes the justifications on the basis of information
asymmetries (distance selling) and exogenously distorted consumer preferences (door-
step transactions).
71 Recital 7.
72 Recital 40, and Recital 43 in respect of extension of the withdrawal period for non-
compliance with the traders obligation to inform.
The uniform withdrawal period of fourteen days in Article 9
73
seems appro-
priate for full harmonisation
74
and represents an alignment with other direc-
tives giving a right to withdraw.
75
Although it might be argued the justification
of information asymmetry is weaker in the context of some distance sales,
76
the
Directives cross-border aspirations for internet sales justify a fourteen day
period.
77
The rules for calculating the period have been simplified,
78
with
welcome clarification of the term day (a calendar day) and that the period
runs from, but does not include, the day of the relevant event.
79
For goods, the
period runs from receipt of the goods, with clarification of the position for
multiple deliveries.
80
For services the withdrawal period runs from the day of
conclusion of the contract,
81
with the same rule applying to contracts for
quasi-services
82
(that is, contracts for the supply of water, gas or electricity
when sold in an unlimited volume or quantity, district heating
83
or digital
content not supplied on a tangible medium), although it is not clear why
one provision could not address both services and quasi-services, as in the
model information form. Overall, the conclusion must be that the rules have
achieved the best compromise in the interests of legal certainty.
The same cannot be said of the twelve month extension to the withdrawal
period for failure to provide the consumer with information on his right to
73 Although ten days was suggested in the Annex to the Green Paper on the Review of the
Consumer Acquis, n3 above, para 4.8.1.
74 Only a few member states provide for longer periods, see Schulte-Nlke, Twigg-Flesner
and Ebers, n26 above, 477.
75 Directive 2002/65/EC concerning the distance marketing of consumer financial services
(with the exception of life insurance and personal pension operations) OJEC L 271/16;
Directive 2008/48/EC on credit agreements for consumers OJEC L 133/66; Directive
2008/122/EC on the protection of consumers in respect of certain aspects of timeshare,
long-term holiday product, resale and exchange contracts OJEC L 33/10.
76 See, for example, Eidenmller, n68 above, 9, who suggests that information asymmetry
in contracts for experience goods could be addressed by a trader signalling quality and an
optional, as opposed to mandatory, right of withdrawal.
77 Recital 5. See also M. Loos, Rights of Withdrawal, in Howells and Schulze (eds), n2
above, 248 concludes that there is no reason to have a different duration for distance sales.
78 The UK implementing regulations for Directive 97/7 contain seven different computa-
tions.
79 Art. 14(2) CRD. Recital 41 applies Regulation 1182/71 determining the rules applicable
to periods, dates and time limits.
80 For multiple goods ordered together but delivered separately and goods delivered in
multiple lots or pieces, the withdrawal period runs from receipt of the last good, lot or
piece; for contracts for regular delivery of goods during a defined period, the period runs
from receipt of the first goods.
81 Art. 9(2)(a) CRD.
82 Art. 9(2)(c) CRD. The term is used here to describe goods which are classified neither
sales contracts nor as service contracts (Recital 19).
83 Defined in Recital 25.
ERCL 2/2012
withdraw.
84
It is subject to criticismon three counts: (i) it is out of line with the
solution in the directives on timeshare, credit and financial services,
85
(ii) it
represents a significant reduction in the protection of the consumer in an off-
premises contract, where under the Doorstep Selling Directive there was no
limitation
86
and (iii) it represents a consumer disbenefit because it does not
acknowledge that the consumer may wish to change his mind later on being
informed subsequently of some other piece of vital information
87
which he
cannot do if there has been timely information of the right to withdraw.
88
This
favours the trader interest, by emphasising the need to counter the risk of
abuse by a consumer who is not informed of the right (or indeed other in-
formation), but nevertheless knows about it, withdrawing at a later date
merely because he can. There is no explanation for this policy shift.
89
2 Exercise of the right
The rules on exercise of the right of withdrawal provide the clearest evidence
of the quest for a standardised, yet flexible, rule, but still have the appearance
of being a compromise.
90
The consumer can inform the trader he is withdraw-
ing by either (i) using a model form
91
or making any other unequivocal state-
ment,
92
or (ii) electronically where the trader gives an option to submit the
model withdrawal form or any other unequivocal statement on the traders
website.
93
According to the model instructions, the unequivocal statement
can be a letter sent by post, fax or e-mail. The preamble
94
makes it clear that the
consumer should be allowed to withdraw in his own words, and this might be
84 In a mystery shopping exercise in 2011, information on the right of withdrawal was
missing in 18 % of online purchases; see European Consumer Centres, Online Cross-
Border Mystery Shopping State of the e-Union (September 2011), para 4.5.2.
85 A potentially limitless period (Directive 85/577 and Directive 2008/48), to extension of
the period by three months (Directive 97/7) to an extension of three months for omission
of key information and one year for failure to supply the withdrawal form (Directive
2008/122).
86 See case 481/00 Heininger v Bayerische Hypo-und Vereinsbank AG [2001] ECR I-9945
(ECJ).
87 For example, on a characteristic of a complex good such as a car. See also Howells and
Schulze, n15 above, 17.
88 It is not clear whether there will also be failure where information is given, but not in a
clear and comprehensible manner as required by art. 6(1) CRD.
89 Micklitz and Reich, n2 above, 498.
90 Under Directive 85/577, rules on exercise of the right are left to national law whereas
Directive 97/7 is silent on the matter.
91 Art. 11(1)(a) CRD. The model form is in Annex 1(B).
92 Art. 11(1)(b) CRD.
93 Art. 11(3) CRD. The trader must acknowledge receipt on a durable medium without
delay.
94 Recital 44.
by letter, telephone or returning the goods with a clear statement, but then
points out that since the burden of proof is on the consumer it is in his interest
to make use of a durable medium. A rule permitting withdrawal by returning
the goods without any statement (tacit withdrawal), as incorporated in the
DCFR
95
and the Acquis Principles
96
would be more consumer-friendly.
97
However, adoption of the consumer-friendly dispatch rule for communication
of withdrawal
98
meets the objectives of legal certainty and addresses the pro-
blem of potential delay when using the post to withdraw, which may be a
particular issue in the case of a cross-border contract.
99
3 The rules on the effect of withdrawal
It is the rules on the effect of withdrawal which represent the greatest illus-
tration of (i) the competing demands of the need to minimise legislative bur-
dens on business and a high level of consumer protection, (ii) the consequence
of merging two directives with different justifications, and (iii) the difficulty of
providing a coherent set of rules in respect of goods and services.
According to the Directive, [t]he obligations of the consumer in the event of
withdrawal should not discourage the consumer from exercising his right of
withdrawal.
100
The right to withdraw in the Doorstep Selling and Distance
Selling Directives was without cost to the consumer. In respect of doorstep
sales the consumer was released from his obligations under the cancelled
contract and, according to Schulte,
101
the parties were restored to their pre-
contractual positions.
102
For distance sales the only charge to the consumer
was the cost of returning the goods and, according to Messner,
103
any obliga-
tion on the consumer to pay compensation on exercise of the right had to take
into account the purpose of the directive and the efficiency and effectiveness of
the right of withdrawal. Under Article 12, exercise of the right operates to
terminate the obligations of the parties to perform the contract,
104
with certain
obligations placed on the parties in the event of withdrawal. Thus the Direc-
95 Art. II5:102 DCFR.
96 Art. 5:102 ACQP.
97 Howells and Schulze, n15 above, 18.
98 Art. 11(2) CRD.
99 Loos, n77 above, 264. It is also in line with Directives 2002/65, 2008/48 and 2008/122.
100 Recital 47.
101 Case 350/03 Elizabeth Schulte, Wolfgang Schulte v Deutsche BausparkasseBadenia AG
[2005] ECR I-9215, para 88.
102 The CJEU has held that this protection of the consumer is not absolute, see case 215/08
E Friz GmbH v Carsten von der Heyden [2010] ECR I-2947, para 44, 45.
103 Case 489/07 Pia Messner v Firma Stefan Krger [2009] ECR I-7315, para 29.
104 Art. 12(a) CRD. Under art. 12(b) where the consumer has made an offer, the effect of
withdrawal is to terminate the obligations of the parties to conclude the contract.
ERCL 2/2012
tive only goes so far in clarifying the effect of exercise of the right of with-
drawal: if termination of the obligation to performindicates prospective rather
than retrospective effect, then the original contractual obligations are to be
regarded as being replaced by new obligations relating to reimbursement and
return. The Directive does not provide answers to the question of what is the
impact of the right of withdrawal on the contract law model.
The Directive makes explicit the obligation of the trader to reimburse standard
delivery costs, clarifying the position for many traders who appeared to hold
the belief that delivery costs are independent of the right of withdrawal.
105
This
reimbursement places no burden on the trader, since the costs are control-
lable:
106
the risk of consumer abuse is addressed by requiring a consumer who
chooses a more expensive means of delivery (for example express delivery, first
class) to pay for it, provided he is informed this will be the case.
107
On the other hand, the apparent strengthening of consumer protection with an
obligation on the trader to reimburse within fourteen days from the day of
being informed of the consumers decision to withdraw
108
may be more appa-
rent than real. First, it may encourage the consumer to withdraw, but only if he
knows about this requirement for prompt reimbursement. There is no require-
ment in Article 6 to provide the consumer with the information:
109
the infor-
mation is included in the model instructions on withdrawal, but use of these is
optional.
110
Second, the period has the potential to be longer than fourteen
days where, for example, notification of withdrawal is sent by post just prior
to expiry of the withdrawal period, as the traders obligation will not be
triggered until he is informed of the consumers decision, that is, when he
receives it.
111
Third, the trader may withhold reimbursing the consumer until
105 This argument was rejected in case 511/08 Verbraucherzentrale Nordrhein-Westfalen
eV v Handelsgesellschaft Heinrich Heine GmbH [2010] ECR I-3047. Under Directive
97/7, this obligation was implicit in art. 6(1) the only charge that may be made . . . is the
direct cost of returning the goods. Amystery shopping exercise on online cross-border
shopping showed that only 43 %reimbursed the total amount; see European Consumer
Centres,n 84 above, para 6.2.2.
106 V. Trstenjak and E. Beysen, European Consumer Protection Law: Curia Semper Dabit
Remedium?(2011) 48 Common Market Law Review 95124, 117.
107 This provision avoids an alternative solution which regards the more expensive delivery
option as a service which has to be paid for; see UK Office of Fair Trading, Guide for
business on distance selling, OFT 698 (September 2006), para 3.49.
108 Art. 13(1) CRD.
109 The information requirements in art. 6(1)(h), (i) and (j) CRD make no reference to this
obligation on the trader.
110 Art. 6(4) The information referred to in points (h), (i) and (j) of paragraph 1 may be
provided by means of the model instructions on withdrawal set out in Annex 1(A).
111 Although arguably the deadline for the corresponding obligation on the consumer to
return the goods confers a similar benefit on the consumer in that they do not have to be
received by the trader within the fourteen day period (art. 14(1) CRD).
he has received the goods back, or the consumer has supplied evidence of
having sent the goods back,
112
whereas some might argue the trader should
reimburse the payments received before there is any obligation to return the
goods.
The consequences of the exercise of the right to withdraw illustrate the aware-
ness of the need to restrict the burden placed on the trader. With the exception
of a specific provision in off-premises contracts for the collection of goods
where they cannot be returned by post,
113
there is no distinction between the
obligations of the consumer in off-premises and distance sales. Nevertheless,
standardised rules which ignore distinctions between distance and off-prem-
ises selling, and contracts for goods and services,
114
may leave a consumer
without effective protection.
It would appear that for the consumer who has been informed of his right to
withdraw in respect of contracts for goods, the standard rule on the effects of
withdrawal is sufficient to protect both the off-premises and the distance
consumer. However, there are risks that in practice the rules may be used to
discourage consumers from exercising their rights. The consumer is required
to compensate the trader only where there has been a diminution in value
resulting from the handling of the goods other than is necessary to establish
the nature, characteristics and functioning of the goods. This duty to compen-
sate only arises if the consumer has been informed of the right of with-
drawal.
115
It seeks to address situations of misuse, for example, wearing clothes
rather than just trying them on; or using equipment. There may be a risk to the
consumer that he discovers when using goods that the product is not what he
really wanted and yet there may be cost to returning it. In Messner
116
it was
confirmed that the consumer in a distance sale
117
could be required to pay
compensation only for using the goods in a manner incompatible with the
principles of civil law, such as those of good faith or unjust enrichment. The
Directive could be regarded as less consumer-friendly in that the consumer
could act in good faith when using the goods he would only be acting in bad
faith if he had the intention to withdraw before using them. The benefit of this
provision to the trader, however, is uncertain. In the event of litigation, the
trader would have to prove the diminution in value that resulted from the
consumers actions.
118
In most cases this will not be sufficient to justify bring-
112 Art. 13(3) CRD.
113 Art. 14(1) CRD.
114 Cf the Proposal for a Common European Sales Law n8 above, where the right of
withdrawal applies only to contracts for the sale of goods and related service contracts.
115 Art. 14(2) CRD and Recital 47.
116 Messner n103 above, para 29.
117 Under Directive 97/7.
118 Messner n103 above, para 26, 27.
ERCL 2/2012
ing proceedings. The consumers obligation is therefore likely to be seen more
as a warning which would be even more effective if the trader was required to
make a statement informing him how to avoid the risk of incurring it.
For services, however, there is an argument for differentiating between off-
premises and distance contracts. Under the Directive, a consumer who exer-
cises his right of withdrawal from a contract for services which has been
started at his express request is required to make a proportionate payment
for the services received. This is reasonable in the distance contract context,
since in many instances the consumer for services is in no different position to
the face-to-face purchaser with respect to the standard of service performed
and so should be required to pay for services received.
119
The right of with-
drawal and refusal to pay for sub-standard work can be used as an alternative
to any contract law remedy for sub-standard performance of services
120
and
provides the consumer with a more immediate and accessible remedy than a
subsequent independent claim for breach.
121
There is also protection through
recognition that the contract price may be disproportionately high, but since
the consumer must demonstrate that the agreed price is excessive,
122
the bene-
fit of this provision is doubtful. However, the rule is more objectionable when
applied to off-premises contracts. The consumer in an off-premises contract
for services may be penalised by having to pay for services received where the
justification for protection (psychological pressure) is strong. Even the pro-
tection provided by the requirements of trader compliance with information
obligations, or an express request by the consumer,
123
before there is any
liability for the performance of services during the withdrawal period amounts
to nothing if there has been psychological pressure on the consumer not just to
purchase but to agree to immediate performance. One thinks in particular of
contracts for home improvement works made off-premises with an elderly
person, where the trader commences performance before expiry of the with-
drawal period.
124
The Directive appears to provide little protection here.
On the other hand, for digital content not in a tangible medium, the Directive
appears to achieve the right balance between trader and consumer interests in
off-premises and distance contracts. If the consumer has not expressed prior
119 Service contracts where performance had been commenced with the consumers agree-
ment before expiry of the withdrawal period were exempt fromthe right to withdrawin
Directive 97/7, art. 6(3).
120 The example of dissatisfaction with the quality of a painting contract is given in IMCO
11-0224 Information Note on the expected benefits of the Consumer Rights Directive.
121 Although the Directive should not affect national laws on contractual remedies, Recital
14.
122 Recital 50.
123 Art. 14(4) CRD.
124 The Proposal specifically identified such contracts in Recital 31, stating that the con-
sumer should bear no cost for such services.
consent to performance during the withdrawal period then there is no require-
ment to pay. This is also the position if the consumer has not acknowledged
loss of the right or the trader has failed to provide confirmation of the contract.
4 The exceptions
The standardisation of exceptions from the right of withdrawal listed in Ar-
ticle 16 represents clarification of existing exceptions which existed under the
Doorstep Selling and Distance Selling Directives. Most of these are sensible
and non-controversial though one might take exception to the exemption
covering car rental services provided on a specific date.
125
This presumably
reflects the decision in easyCar,
126
where car rental was described as a trans-
port service and exempt from the Distance Selling Directive on the grounds
that the trader would find it difficult to fill the empty place at short notice.
However, the same argument could feasibly apply to a number of service
contracts, and in any event according to Advocate General Trstenjak in easy-
Car, a car hire firm does not suffer a disproportionate burden as a result of
exercise of the right.
127
No explanation is provided in the preamble.
128
5 The extent of full harmonisation
Although some aspects of the right of withdrawal are suitable for full harmo-
nisation, two of the regulatory aspects have specifically been left to the Mem-
ber States.
129
Where the consumer has exercised his right to withdraw under
the Directive, an ancillary contract is automatically terminated without any
costs to the consumer.
130
However, Article 15(2) provides that it is for Member
States to lay down detailed rules on the termination of the ancillary contracts,
described as contracts for goods or services supplied by the trader under a
related contract or on the basis of an arrangement between the trader and a
third party.
131
This does not provide for legal certainty.
Also left within the competence of the Member States is the retention of any
prohibition of payment during the withdrawal period for off-premises con-
125 Art. 16(l) CRD.
126 Case 336/03 easyCar (UK) Ltd v Office of Fair Trading [2005] ECR I-1947.
127 Para 62. See E. Hall, Cancellation Rights in Distance Selling Contracts for Services:
Exemptions and Consumer Protection (2007) Journal of Business Law 683700, 692.
128 Recital 27. Passenger transport services (not defined) are exempt from the Directive as
a whole (with some exceptions).
129 See also n7 above for other aspects not subject to full harmonisation.
130 Except any supplementary delivery costs and any costs relating to the diminution in
value of goods or proportionate costs of services in art. 14 CRD.
131 Art. 2(15) CRD. This definition aligns to the definition of an ancillary contract in
Directive 2008/48.
ERCL 2/2012
tracts.
132
Potential consumer problems of delayed or non-recovery of pay-
ments where a prepaying consumer withdraws may justify a higher level of
consumer protection:
133
extending this provision to distance contracts, partic-
ularly given the difficulties of cross-border enforcement of consumer rights,
134
would benefit the consumer, but may impede the cross-border aspirations of
the Directive. Again, the provision does not aid legal certainty.
6 Summary
The Directive has been partially successful in introducing a uniform fourteen
day withdrawal period and has thereby addressed legal fragmentation of the
right of withdrawal. However, the protection provided by extending the
period by twelve months where the trader fails to inform the consumer of
his right of withdrawal (but only for breach of that one information duty) falls
short of the objectives of regulatory harmonisation and a high level of con-
sumer protection. The rules on exercise of the right are clearer but appear to
give priority to evidential issues over effectiveness of the withdrawal right.
The rule requiring reimbursement only of standard delivery costs strikes an
appropriate balance. Likewise, the rule limiting liability for diminution in
value to that caused by excessive handling during the withdrawal period ap-
pears to provide a fair solution on paper, but it remains to be seen howit will be
applied in practice.
However, there remains continuing lack of certainty over the effect of with-
drawal on the contract and on any ancillary contract. The rules on payment for
services, with the exception of digital downloads, result in an undesirable
decrease in the level of protection currently afforded to the off-premises con-
sumer.
IV Other rights
Chapter IVon other consumer rights are a rag bag of miscellaneous provisions.
132 Art. 9(3) CRD. This reverses art. 12(4) of the proposal, which had said that Member
States could not prohibit payment within the withdrawal period. In case 205/07 Gys-
brechts and Santurel Inter [2008] ECR-I-9947, the ECJ held that art. 29 EC(nowart. 35
TFEU) did not preclude national rules prohibiting payment within the withdrawal
period in respect of distance selling, although such a prohibition may not extend to
requiring details of a payment card.
133 Advocate General Trstenjak in Gysbrechts, para 79, 81.
134 Micklitz and Reich, n2 above, 500.
1 Delivery
Article 18 follows the basic rule found in the Distance Selling Directive that
goods should be delivered within thirty days. It then provides a procedure
which in most cases should be followed of the consumer setting an additional
period for delivery which, if not complied with, then entitles him to terminate
the contract and obtain reimbursement of all sums paid without undue delay.
Although the consumer must fix a period of extension, this solution gives the
consumer certainty that he can treat the contract as terminated once that
period has expired.
2 Passing of risk
Article 20 usefully clarifies that risk in goods will only pass to a consumer or
third party when they have physical possession of the goods. Risk only passes
on delivery to a carrier if the carrier was commissioned by the consumer and
not offered by the trader.
3 Price transparency
Three provisions deal with price transparency and it can be argued are in-
formed by behavioural economics to ensure that consumers make informed
price decisions.
135
Article 21 requires any telephone line operated by a trader
for post sales customer care to be charged at no more than the basic rate. This
prevents traders pricing the initial goods or services low in the hope of gaining
from premium line charges for after sales service.
Of potentially great significance is Article 19 which prohibits fees for payment
exceeding the cost borne by the trader. In some sectors, notably air travel, fees
for payment can be a considerable proportion of the price. Often the full price
is only revealed at the end of the transaction. This drip feeding can distort
consumers perceptions for they may still anchor their assessment around the
initial price or be reluctant to waste the time invested up to that point. This
should help increase transparency and hence competition, though there may
be some debate about howto calculate the actual cost to the trader of the use of
means of payment methods as the different calculations of Which?, the UK
consumer group and the OFT demonstrate.
136
One of the insights of behavioural economics is that consumers will more
readily tend to accept the default position. Therefore Article 22 seeks to
135 There is some useful emerging research on this theme see UK Office of Fair Trading,
The Impact of Price Frames on Consumer Decision Making, OFT 1226 (May 2010).
136 See UK Office of Fair Trading, Payment Surcharges, Response to the Which? Super-
complaint, OFT 1349resp (June 2011), Annex C.
ERCL 2/2012
nudge
137
consumers to consider and take responsibility for their choices by
requiring they expressly consent to extra payments beyond the remuneration
agreed for the traders main contractual obligation. This consent cannot be
achieved by default options the consumer is required to reject. Such pre-ticked
boxes are prohibited. This is a positive step in ensuring informed consumer
decision-making.
4 Enforcement
The Directive has the typical rules on enforcement. Member States must have
adequate and effective means to ensure compliance. These should allow ac-
tions to be brought by public bodies as well as consumer and professional
bodies having a legitimate interest.
138
Penalties should be effective, propor-
tionate and dissuasive.
139
So long as the applicable contract law is that of a
Member State, consumers may not waive the rights conferred on themand any
contract term directly or indirectly waiving or restricting the right is not bind-
ing on the consumer.
140
Member States should also take measures to inform
consumers and traders of the provisions and where appropriate encourage
traders and code owners to inform consumers of their codes.
141
5 Inertia selling
Somewhat out of place in the structure of the Directive is the provision in
Article 27 concerning inertia selling, namely that the consumer does not have
to provide any consideration for unsolicited services and that the absence of a
response by the consumer does not constitute consent. This exception reflects
the prohibition on inertia selling in the Distance Selling Directive
142
and Un-
fair Commercial Practices Directive
143
.
V Conclusions
The Directive represents another incremental growth in the scope of the EU
consumer acquis that reflects maximal harmonisation. During the debates on
the Directive there was much discussion of targeted harmonisation but at
times it seemed to be so broad that there was hardly any targeting at all. The
137 Sunstein and Thaler, n9 above.
138 Art. 23 CRD.
139 Art. 24 CRD.
140 Art. 25 CRD.
141 Art. 26 CRD.
142 Art. 9 of Directive 97/7/EC.
143 Point 29 of Annex I to Directive 2005/29/EC.
final product is far more targeted on areas where there is a good deal of
consensus that maximal harmonisation is appropriate. In the case of informa-
tion duties it will ease the flow of goods by removing potential pitfalls for
traders in the form of national peculiarities, whilst common rules on the right
of withdrawal will promote certainty for both traders and consumers. How-
ever, there is a risk that this advantage of harmonisation may be undermined
by certain ambiguities in the terminology that may allow different national
interpretations to develop, for example, as regards compliance with the vari-
ous formal requirements.
144
Also it is disappointing that more advantage was
not taken of the models provided such as the Acquis Principles and the DCFR.
The rules on information duties and withdrawal will now also form the bed-
rock of the proposed Common European Sales Law. So the conclusion could
be that the Directive is an unspectacular but useful consolidation with some
interesting new rules on fees for using payment cards and the use of default
boxes. The policy behind these new elements clearly show elements of reflec-
tion on behavioural economics and the hope must be that the Directive is not
the end of the EUreflection on information and right of withdrawal. Attempts
must be made to apply lessons from behavioural economics in the future,
rather than simply assume consumers are adequately protected by formally
providing them with rights to information and withdrawal without consider-
ing how effective these tools are in promoting consumer autonomy in the
decision-making process.
144 As criticised above under II 5 b).
ERCL 2/2012

The Consumer's Rights Directive (Week 9)

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

The Consumer's Rights Directive (Week 9)

Transféré par

Droits d'auteur :

Formats disponibles

Ar t i cl es

The Consumer Rights Directive An Assessment of its

Vous aimerez peut-être aussi

The Consumer&#39;s Rights Directive (Week 9)

Transféré par

Informations du document

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

The Consumer&#39;s Rights Directive (Week 9)

Transféré par

Droits d'auteur :

Formats disponibles

Ar t i cl es

The Consumer Rights Directive An Assessment of its

Vous aimerez peut-être aussi

The Consumer's Rights Directive (Week 9)

The Consumer's Rights Directive (Week 9)