Unfair Terms in the Acquis Principles and Draft Common Frame of Reference: A Study of the Differences between the Two Closest Members of One Family

• Author: Fryderyk Zoll
• Position: Professor, Jagiellonian University and L. Kozminski School of Law
• Pages: 69-77

Fryderyk Zoll

Professor, Jagiellonian University and L. Kozminski School of Law

Unfair Terms in the Acquis Principles and Draft Common Frame of Reference: A Study of the Differences between the Two Closest Members of One Family

1. The acquis principles and Draft Common

Frame of Reference - a question of relationship

The first volume of the Principles of the Existing EC Contract Law was published last summer¹. It contains the first results of the work conducted by the Acquis Group, whose purpose is to restate the content of the acquis communautaire and to form it into one coherent system of law. The Acquis Group is trying to provide a proof that the fragmented sources of the European private law express legal ideas that in many cases can be generalised and then can serve as the basis for a more profound and wider harmonisation of private law in Europe. The work of the Acquis Group should be treated as a sort of intellectual experiment concerning the possibility of creation of coherent contract law in Europe².

The day of publication of the Draft Common Frame of Reference (DCFR) is also forthcoming³. This draft has been prepared by the Compilation and Redaction Team - a small group of researchers representing two large research networks, namely the Study Group on a European Civil Code and the Acquis Group on Existing EC Contract Law. The majority of the DCFR consists of results of the work conducted by the Study Group, which in the intellectual sense continues the work initiated by the Commission on European Contract Law (the so-called Lando Commission)⁴. However, certain parts of the DCFR have been entirely reserved for rules developed by the Acquis Group⁵. These are the parts with respect to which the existing acquis communautaire has reached a high level of development. The problem of unfair terms is one issue that has been widely elaborated on at the Community level. The Unfair Terms Directive accelerated the private law harmonisation process for the core of contract law⁶.

Although the Compilation and Redaction Team consists of members of both the Acquis Group and the Study Group and continues its work on the basis of the texts elaborated by the respective groups, it maintains at least a partial autonomy in the process of incorporation of texts prepared by the groups into the one coherent set of rules in the Draft CFR. Therefore, the texts issued under the auspices of the Study Group or Acquis Group are not identical in their text to what is to be finally provided by the Compilation and Redaction Team⁷. In this context, the difference in the methodology applied by the Study Group and Acquis Group needs to be emphasised⁸.

In the course of its work, the Study Group is generally continuing the approach adopted by the Lando Commission. Thus, it is trying to formulate the rules on the basis of results obtained in the process of comparative research. Since the individual solutions adopted by the European countries (as well as other legal systems or acts considered during the working process) are quite diverse, the Study Group maintains a lot of freedom in developing the rules and principles. In practice, the Study Group formulates the proposals for the 'best rules', taking into account different legal traditions⁹. The methodology adopted by the Acquis Group is more formalised, because for the adoption of every so-called 'black-letter rule' it requires finding sufficient legitimisation in the existing formal sources of the acquis communautaire and in the case law of the European Community¹⁰. That does not mean, however, that the content of the rule expressed in the acquis principles remains the same as in the Community law. In fact, quite often it is the contrary. The generalisation and placement of the rule in a different context necessarily modify the content of the rule itself. It has to be emphasised, however, that the respective rule of the acquis communautaire expresses a legal concept or idea that can be applied in a broader scope. In specifying its methodology, the Acquis Group has, however, reserved a right to improve the Community law whenever such an initiative does not change the ideology behind the rule¹¹.

Even if the Compilation and Redaction Team preparing the final text of the DCFR adopts the rules formulated by the Acquis Group, it is not bound by the methodology adopted in the process of creation of the acquis principles. Consequently, the Compilation and Redaction Team is free to adjust these rules and harmonise them with the whole system of the DCFR, which can be achieved either by the formulation of a 'better rule' than the one provided by the existing acquis communautaire or by the 'correction' of the results obtained by the Acquis Group in the process of comprehension of European Community law. Thus, the rules taken over from the acquis principles and then incorporated into the text of the DCFR may differ slightly from the original text.

Both the Study Group and the Acquis Group maintain some sort of control over their own texts and those of their counterpart, as well as over the whole process of incorporation of those texts into the DCFR. The co-ordinators of these two groups may object to some formulations and propose an alternative solution.

In the case of unfair terms, the original text of the acquis principles has been modified in the process of incorporation into the DCFR. The question of the rules governing unfair terms has been the subject of vigorous debate within the Compilation and Redaction Team. Therefore, it is possible that the problems concerning the issue of unfair terms will lead to the presentation of alternative drafts of rules, at least with respect to one central point of the criterion of 'non-negotiation' as a condition for the unfairness test with regard to consumer contracts.

By applying the methodology of the Acquis Group, I would like to analyse in the following part of this paper the differences in the texts of the acquis principles and the DCFR. By doing so, I will strive to answer the question of which of the two texts more closely reflects the state of the existing acquis communautaire. Moreover, I will try to decide which of the two formulations would better fit into the text of the DCFR - the original text of the acquis principles or its version filtered by the DCFR. The same analysis will be applied to the two possible formulations proposed by the DCFR.

2. The Unfair Terms Directive as a major source of formulation of the acquis principles on non-negotiated terms

By the adoption of Directive 93/13 on Unfair Terms in Consumer Contracts, the European Community harmonised one of the most controversial areas in the field of contract law. It is not my intention to repeat here the well-known discussion preceding the adoption of the final version of this directive¹². It is, however, important to stress some of the critical arguments made during this debate, which resulted from the differences in European legal traditions. Two main concepts were competing with each other in the origins of the directive. The German tradition was focused on the control of standard terms. The law involved an attempt to determine the limits of the quasi-legislative activity of a business¹³. The law on standard terms was not covered in consumer law, and B-to-B transactions were also covered by the fairness test, with only a relaxed level of its control. The French model, in turn, was based on a very different assumption. The starting point in the French system was the idea of protection of the weaker party (labelled as the consumer or non-professional). In this model, it did not matter whether the consumer was able to influence the content of the contract, and the requirement of 'standardisation' of the terms (in the sense that they are intended to apply in several transactions) has not been formulated¹⁴.

The proposals to be adopted in the directive more closely resembled the French model. Consumer contracts were supposed to be subject to the control regardless of whether the business used standard terms, and despite the issue of whether the consumer could influence the content of the contract¹⁵. The Unfair Terms Directive of 1993 is the result of a compromise without coherent ideological underpinnings. The directive comprises a sort of mixture, based on both the German and French solutions¹⁶. The core of the German legal notion of standard terms is not entirely meaningless under the directive, but its practical relevance is greatly reduced, because its meaning is reduced to a starting point for the establishment of a presumption that the terms have not been negotiated (article 3 (2), item 3). The directive emphasises also that unfairness is more likely to appear in cases of standard terms (article 3 (1)).

Individual terms drafted with the intention of narrow application to a particular contract are also subjected to the fairness test (article 3 (1)). However, the terms that have been negotiated are excluded from the control procedure. The Unfair Terms Directive forms a part of consumer law. The other parties may not invoke the fairness test on the basis of the directive¹⁷.

3. The fairness test in B-to-B transactions according to the acquis communautaire

The idea of also applying the fairness test to B-to-B transactions is inherent in European Community law, although it finds a quite limited scope of application. According to article 3 (3)...