[Hague-jur-commercial-law] Non negotiated contracts in EC Directive (Consumer Protection and Copyright Law)

[Manon Ress]

In Consumer protection and Copyright Law
Study by Dr. Lucie Guibault and Ms. Natali Helberger, academic 
researchers at the Institute for Information Law, University of 
Amsterdam written for the ECLG

  http://www.europeanconsumerlawgroup.org

http://www.europeanconsumerlawgroup.org/Content/Default.asp?PageID=488

SNIP
4.2. EC Directive on unfair contract terms

In principle, the provisions of the European Directive on unfair 
contract terms cover massmarket licences for the use of copyrighted 
material, provided that the conditions of application are met. Hence, 
for the Directive to apply, a first condition would be that the
other party to such a licence is a ‘consumer’ as defined in the 
Directive, that is ‘any natural person who, (…), is acting for purposes 
which are outside his trade, business or profession’.31

In other words, the rules established under the Directive may offer some 
level of protection to physical persons, but they would in principle not 
apply to other categories of users of copyrighted material, such as 
small businesses, libraries, archives, educational institutions and
the like. By contrast, the section on abusive clauses of the French 
Consumer Code is said to apply both to ‘consumers and 
non-professionals’, an expression which the courts have
interpreted rather broadly, so as to include cases where professionals 
transact within their sphere of activity.32 Moreover, the general 
principle expressed in Article 6:233 of the Dutch Civil Code and in 
Article 305 of the German Civil Code has been recognised to apply not
only in contractual relations between a professional and a consumer, but 
also in relations between professionals. Legal persons and 
professionals, like small businesses, libraries, archives and 
educational institutions, would therefore be admitted to challenge the 
fairness of standard contract terms on the basis of these two general 
provisions.

Second, the Directive provides that the assessment of the unfair nature 
of the terms must relate neither to the definition of the main subject 
matter of the contract nor to the adequacy of the price and remuneration 
for the goods and services rendered. The same requirement exists
explicitly or implicitly under the national provisions on standard form 
contracts.33 However, neither the Directive nor the national legislation 
gives any indication of what is to be considered as the ‘main subject 
matter of a contract’. A licence term may be deemed essential
if it is of such substantial significance that without them the contract 
would not have been formed or that there would be no proper 
manifestation of intention. Such essential terms are
thus excluded from the definition of a ‘general condition’ included in a 
non-negotiated contract, thereby escaping judicial review. In the 
absence of any relevant court decision on the issue, it is still unclear 
whether a term that restricts the privileges normally granted to
users under copyright law would be considered as pertaining to the main 
subject matter of the licence.

Assuming both that the standard contract is concluded with a consumer 
and that the term under review does not touch on the essence of the 
performance, a term will be regarded as unfair under the Directive if, 
contrary to the requirement of good faith, it causes a significant
imbalance in the parties’ rights and obligations arising under the 
contract to the detriment of the consumer. The list presented in annex 
to the Directive is meant to give an indication of the clauses that may 
be regarded as abusive or unfair. The only clause enumerated in the list
that could apply in the context of a licence for the use of copyrighted 
material, is the one that ‘irrevocably bind[s] the consumer to terms 
with which he had no real opportunity of becoming acquainted before the 
conclusion of the contract’. This type of clause relates more
to the formation of the contract and to the accuracy of the consumer’s 
assent to the obligations contained therein, than to the fairness of the 
contractual obligations themselves. As a result, consumers and 
professionals alike must turn to the open norm laid down in the 
Directive and in national private law. This principle may be invoked 
every time that the specific provisions on abusive clauses cannot be 
applied, because the other party is not a consumer, because the
term has been negotiated or because the term under review relates to the 
main subject matter of the contract. Under both types of provisions, the 
fairness of a term is assessed by referring, at the moment of the 
conclusion of the contract, to all the circumstances that surround its
conclusion, to the mutually apparent interests of the parties, to the 
common usage of the trade, as well as to all other clauses of the 
contract.34

A term included in a standard form contract is generally regarded as 
unfair if, contrary to the requirement of good faith, it causes a 
significant imbalance in the parties’ rights and
obligations arising under the contract to the detriment of the other 
party. In order to determine whether a licence term that prevents the 
use of public domain material or that purports to restrict the 
privileges for users normally recognised under the copyright act is
unreasonable or abusive, courts would have to consider all the 
circumstances that prevailed at the time of conclusion of the contract. 
Admittedly, the outcome of this type of inquiry may vary significantly 
from one country to another. Furthermore, the court may come to a
different conclusion depending on whether the contested clause pertains 
to restrict the exercise of a limitation on copyright or the use of 
public domain material. Unfortunately, no relevant case law can provide 
us any guidance at this time.

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FOOTNOTES:

31 Directive on Unfair Terms, art. 2(b).
32 Guibault 2002, p. 252-253.
33 French Consumer Code, art. L. 132-1, 7th par.; Dutch Civil Code, art. 
6:231(a); and German Civil Code, art. 307(3).
34 French Consumer Code, art. L 132-1 5th par.; Dutch Civil Code, art. 
3:12, 6:233a); BGB, § 157 and German Civil
Code, art. 310(3)(3).



-- 
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

Consumer Project on Technology in Washington, DC PO Box 19367, 
Washington, DC 20036, USA Tel.:  +1.202.387.8030, fax: +1.202.234.5176

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