Chapter 18
Unfair terms in consumer contracts:
CRA regulates unfair terms in consumer contracts concluded between a consumer and a
trader.
S. 62 (1) states that ‘an unfair term of a consumer contract is not binding on the consumer’.
18.1 The background to the Act:
Origins of Part 2 of the CRA 2015 are to be found in an European Directive on Unfair Terms
in Consumer Contracts (93/13 EEC).
The transposition of ^ has been problematic.
Part 2 of the CRA represents the 3 rd attempt by the UK to implement the Directive into
domestic law.
1st attempt in the Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994/3159)
which came into force 01/07/1995.
The 1999 Regulations have now been revoked by part 2 of the CRA.
European origin is important because:
o The drafting of the original Directive is not a model of clarity and has been the
subject of many criticisms (Hartley, 1996). Parliament hasn’t always been willing to
grapple with these difficulties. The 1999 Regulations adopted a technique known as
the ‘copy-out’ so that the Regulations largely copied out the text of the Directive
without attempting to remove the ambiguities or deal with difficulties of
interpretation. Advantages= minimises the potential liability of the State for failures
to implement the Directive properly and promotes uniformity in Europe.
Disadvantages= it has left the law in an unsatisfactory state and triggered litigation,
the outcome of which was difficult to predict.
o The legislation has been enacted in implementation of a European Directive relates
to the approach which should be adopted when seeking to interpret the legislation.
Domestic legislation has traditionally been interpreted literally (focusing on the
precise wording) with less emphasis on the purpose or spirit behind the legislation.
By contrast, the Court of Justice of the European Union (CJEU) adopts a much more
purposive or teleological approach to interpretation. English lawyers now have to
adopt this approach when concerning the Directive. Illustrated in the 1994
Regulations, namely whether they applied to contracts for the sale of land. In some
cases, the UK courts have been criticised for their unwillingness to adopt a more
purposive approach.
o The role of the CJEU in the interpretation of the Directive. Issues:
1. The obligation of national courts to make a reference to the CJEU under
Article 267 of the Treaty on the Functioning of the EU if a decision on the
correct interpretation of the Directive is necessary to enable the court to
give judgement and the matter is not act eclair. Both the HL and SC have
declined to make a reference in cases concerned with the interpretation of
Regulations/Directive, and their failure to do so has been the subject of
some criticism (Dean, 2002).
2. The extent to which the CJEU will see fit to conclude that certain words or
phrases in the Directive have an ‘autonomous’ or independent meaning to
be established by the Court. CJEU affirmed that its jurisdiction extended to
Unfair terms in consumer contracts:
CRA regulates unfair terms in consumer contracts concluded between a consumer and a
trader.
S. 62 (1) states that ‘an unfair term of a consumer contract is not binding on the consumer’.
18.1 The background to the Act:
Origins of Part 2 of the CRA 2015 are to be found in an European Directive on Unfair Terms
in Consumer Contracts (93/13 EEC).
The transposition of ^ has been problematic.
Part 2 of the CRA represents the 3 rd attempt by the UK to implement the Directive into
domestic law.
1st attempt in the Unfair Terms in Consumer Contracts Regulations 1994 (SI 1994/3159)
which came into force 01/07/1995.
The 1999 Regulations have now been revoked by part 2 of the CRA.
European origin is important because:
o The drafting of the original Directive is not a model of clarity and has been the
subject of many criticisms (Hartley, 1996). Parliament hasn’t always been willing to
grapple with these difficulties. The 1999 Regulations adopted a technique known as
the ‘copy-out’ so that the Regulations largely copied out the text of the Directive
without attempting to remove the ambiguities or deal with difficulties of
interpretation. Advantages= minimises the potential liability of the State for failures
to implement the Directive properly and promotes uniformity in Europe.
Disadvantages= it has left the law in an unsatisfactory state and triggered litigation,
the outcome of which was difficult to predict.
o The legislation has been enacted in implementation of a European Directive relates
to the approach which should be adopted when seeking to interpret the legislation.
Domestic legislation has traditionally been interpreted literally (focusing on the
precise wording) with less emphasis on the purpose or spirit behind the legislation.
By contrast, the Court of Justice of the European Union (CJEU) adopts a much more
purposive or teleological approach to interpretation. English lawyers now have to
adopt this approach when concerning the Directive. Illustrated in the 1994
Regulations, namely whether they applied to contracts for the sale of land. In some
cases, the UK courts have been criticised for their unwillingness to adopt a more
purposive approach.
o The role of the CJEU in the interpretation of the Directive. Issues:
1. The obligation of national courts to make a reference to the CJEU under
Article 267 of the Treaty on the Functioning of the EU if a decision on the
correct interpretation of the Directive is necessary to enable the court to
give judgement and the matter is not act eclair. Both the HL and SC have
declined to make a reference in cases concerned with the interpretation of
Regulations/Directive, and their failure to do so has been the subject of
some criticism (Dean, 2002).
2. The extent to which the CJEU will see fit to conclude that certain words or
phrases in the Directive have an ‘autonomous’ or independent meaning to
be established by the Court. CJEU affirmed that its jurisdiction extended to
