Subjective Scope of Application 91

It therefore appears that states that wish to take a broader approach to unfair terms control are free to do so; so, for example, a domestic court would be able to adopt a broader understanding of ‘consumer’ than the one adopted by the ECJ.

The practical significance of this lies in the fact that the more recent moves from the European Commission show some hostility towards the partial harmonisation ensured by means of minimum harmonisation: the most recent measures of consumer protection, such as Directive 2005/29 on Unfair Commercial Practices or Directive 2002/65 on the Distance Marketing of Financial Services, aim to achieve ‘total harmonisation’ (ie. they do not contain a minimum harmonisation formula) and the 2003 Commission Communication on ‘A More Coherent European Contract Law’86 explicitly states that ‘the principle of minimum harmonisation in consumer protection legislation was criticised as not achieving the uniformity of solutions for similar situations that the internal market would require’. It is not unlikely that, should the Commission review the consumer acquis (including Directive 93/13) in the future, the minimum harmonisation formula will be removed.

Should this happen, the choice of the Law Commission and of other Member States to extend protection to businesses is, according to the above reasoning, a perfectly valid one: even in the absence of a minimum harmonisation formula, the states’ competence to adopt or maintain legislation that protects business as well as consumers would not be pre-empted by Community action, as the latter would be covering a limited field that only includes consumer contracts (as defined in the EC legislation and case-law), the terms of which have not been individually negotiated.87

Against this background, it must be noted that Directive 2005/65 on the distance marketing of financial services presents an oddity. Recital (29) states that ‘This Directive is without prejudice to extension by Member States, in accordance with Community law, of the protection provided by the Directive to non-profit organisations and persons making use of financial services in order to become entrepreneurs’. The oddity is in the fact that the field covered by the directive is, once more, that of ‘consumer contracts’: outside this sphere, Member States remain free to enact or maintain any other measures: there is therefore no need to overtly provide for such a possibility, unless one reads Recital 29 a contrario as meaning that the field covered by the directive is that of all contracts for the distance marketing of financial services, and not just that of consumer contracts.

THE BUSINESS PARTY

As highlighted in the Commission Communication on a More Coherent Contract Law, one problematic aspect of the current acquis is ‘the absence of common

86COM (2003) 68 final.

87A corollary of this would be, on the other hand, that in the field covered by the Directive no Member State could adopt more stringent measures.

92 Unfair Contract Terms in EC Law

definitions’,88 which may lead to inconsistencies in the application of the Directive to similar cases, and of the introduction by directives of concepts which are alien to the existing national legislation.

Examples of both types of difficulty can be found in the definition of the party with whom the consumer deals. First, there is little coherence in the way that EC directives define this party. This is partly justified by the need to include each time different categories of economic agents, ranging from the producer, to the credit institution to the supplier. Other times, however, it is difficult to find a reason that may justify the different terms used in each directive: the Doorstep Sales Directive uses the word ‘trader’ to include ‘a natural or legal person who, for the transaction in question, acts in his commercial or professional capacity’; the Distance Sales Directive applies to a ‘supplier’ (term which is usually associated with the provision of a service), that is, ‘any natural or legal person who . . . is acting in his commercial or professional capacity’; and Directive 93/13 uses the words ‘seller or supplier’ to include ‘any natural or legal person who, in contracts covered by this Directive, is acting for purposes relating to his trade, business or profession, whether publicly owned or privately owned’. It is hoped that the planned revision of the contract acquis will bring some uniformity in this respect.

In addition to generating confusion, the terminology used is not always the most appropriate: there is, in fact, a lack of conformity between the different language versions in the description of the business used in article 1 of Directive 93/13.

The French version uses the word un professionel and the German the word Gewerbetreibende, but the English version speaks about ‘seller’ or ‘supplier’: however, it is clear that the scope of the Directive should not be limited to the provision of goods or services: the definition of seller or supplier in the Directive does not make any reference to selling goods or supplying services. Accordingly, a seller or supplier will be the person who, as opposed to the consumer, is acting for purposes related to his trade, business or profession even if, for example, he is buying goods instead of selling (eg a garage that buys a car from an individual with a view to reselling it): in this case, words have to be interpreted on their own merits even though their prima facie understanding may be different.89

This terminological problem did not arise under UCTA, as section 1(3)(a) defined any ‘business liability’ in contract or tort as ‘liability arising from things done or to be done by a person in the course of a business’.90

On the other hand, as previously discussed, there was some ambiguity on the exact contours of ‘in the course of a business’: R & B Customs Brokers91 seemed to

88 ‘Communication from the Commission to the European Parliament and Council. A More Coherent European Contract Law. An Action Plan’ COM (2003) 68 final, 8

89C–283/81 Srl CILFIT and Lanificio di Gavardo v Ministero Italiano della Sanita, [1982] ECR 3415. For a broad meaning of ‘seller or supplier’ see the English case Kathun & Others v Newham LBC [2004] EWCA Civ 55.

90‘Business’ is further defined as including ‘a profession and the activities of any government department or local or public authority’, UCTA s 14.

91Above n 27