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Bayerische Hypotheken- und Wechselbank (Environment and consumers) [1998] EUECJ C-45/96 (17 March 1998)
URL: http://www.bailii.org/eu/cases/EUECJ/1998/C4596.html
Cite as:
[1998] 2 CMLR 499,
[1998] 1 WLR 1035,
[1998] EUECJ C-45/96
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IMPORTANT LEGAL NOTICE - The source of this judgment is the web site of the Court of Justice of the European Communities. The information in this database has been provided free of charge and is subject to a Court of Justice of the European Communities disclaimer and a copyright notice. This electronic version is not authentic and is subject to amendment.
JUDGMENT OF THE COURT (Fifth Chamber)
17 March 1998 (1)
(Protection of the consumer in respect of contracts negotiated away from
business premises - Guarantees)
In Case C-45/96,
REFERENCE to the Court under Article 177 of the EC Treaty by the
Bundesgerichtshof (Germany) for a preliminary ruling in the proceedings pending
before that court between
Bayerische Hypotheken- und Wechselbank AG
and
Edgar Dietzinger
on the interpretation of Council Directive 85/577/EEC of 20 December 1985 to
protect the consumer in respect of contracts negotiated away from business
premises (OJ 1985 L 372, p. 31),
THE COURT (Fifth Chamber),
composed of: M. Wathelet, President of the First Chamber, acting for the President
of the Fifth Chamber, J.C. Moitinho de Almeida, D.A.O. Edward, P. Jann and
L. Sevón (Rapporteur), Judges,
Advocate General: F.G. Jacobs,
Registrar: H.A. Rühl, Principal Administrator,
after considering the written observations submitted on behalf of:
- Mr Dietzinger, by Eberhard Bubb, Rechtsanwalt, Landshut,
- the German Government, by Alfred Dittrich, Regierungsdirektor in the
Federal Ministry of Justice, and Bernd Kloke, Oberregierungsrat in the
Federal Ministry of Economic Affairs, acting as Agents,
- the Belgian Government, by Jan Devadder, General Adviser in the Ministry
of Foreign Affairs, Trade and Cooperation with Developing Countries,
acting as Agent,
- the French Government, by Catherine de Salins, Head of Subdirectorate in
the Legal Affairs Directorate of the Ministry of Foreign Affairs, and Régine
Loosli-Surrans, Chargée de Mission in the same Directorate, acting as
Agents,
- the Finnish Government, by Tuula Pynnä, Legal Adviser in the Ministry of
Foreign Affairs, acting as Agent,
- the Commission of the European Communities, by Carmel O'Reilly and
Ulrich Wölker, of its Legal Service, acting as Agents,
having regard to the Report for the Hearing,
after hearing the oral observations of Mr Dietzinger, of the German Government,
of the French Government, of the Finnish Government and of the Commission at
the hearing on 22 January 1997,
after hearing the Opinion of the Advocate General at the sitting on 20 March 1997,
gives the following
Judgment
- By order of 11 January 1996, received at the Court on 15 February 1996, the
Bundesgerichtshof (Federal Court of Justice) referred to the Court for a
preliminary ruling under Article 177 of the EC Treaty a question concerning the
interpretation of Council Directive 85/577/EEC of 20 December 1985 to protect the
consumer in respect of contracts negotiated away from business premises (OJ 1985
L 372, p. 31).
- That question has been raised in proceedings between Bayerische Hypotheken- und
Wechselbank AG ('the Bank') and Edgar Dietzinger concerning the performance
of a contract of guarantee concluded by Mr Dietzinger with the Bank.
- Article 1(1) of Directive 85/577 provides as follows:
'This Directive shall apply to contracts under which a trader supplies goods or
services to a consumer and which are concluded:
- during an excursion organised by the trader away from his business
premises, or
- during a visit by a trader
(i) to the consumer's home or to that of another consumer;
(ii) to the consumer's place of work;
where the visit does not take place at the express request of the consumer.'
- Next, Article 2 provides:
'For the purposes of this Directive:
- "consumer" means a natural person who, in transactions covered by this
Directive, is acting for purposes which can be regarded as outside his trade
or profession;
- "trader" means a natural or legal person who, for the transaction in
question, acts in his commercial or professional capacity, and anyone acting
in the name or on behalf of a trader.'
- Under Article 4 of Directive 85/577, traders are required to give consumers written
notice of their right to cancel the contract within a specified period. Article 5
provides that that period is to be not less than seven days from receipt by the
consumer of the notice of his right to renounce the effects of the contract.
- Mr Dietzinger's father ran a building firm in respect of which the Bank, inter alia,
granted a current account overdraft facility. On 11 September 1992, Mr Dietzinger
gave a direct recourse written guarantee, for a sum not to exceed DM 100 000,
covering his parents' obligations to the Bank.
- The contract of guarantee was concluded at the house of Mr Dietzinger's parents
during a visit by an employee of the Bank to which Mr Dietzinger's mother had
agreed over the telephone. Mr Dietzinger was not informed of his right of
cancellation.
- In May 1993, the Bank called in, with immediate effect, all the loans which it had
granted to Mr Dietzinger's parents, which at that time totalled more than DM 1.6
million. It also sued Mr Dietzinger for payment of DM 50 000 under the
guarantee. Mr Dietzinger sought to renounce the guarantee, maintaining that he
had not been informed of his right of cancellation, contrary to the Gesetz über den
Widerruf von Haustürgeschäften und ähnlichen Geschäften (Law on the
Cancellation of 'Doorstep' Transactions and Analogous Transactions, BGBl. I,
p. 122) of 16 January 1986, which transposed Directive 85/577 into German law.
- The Landgericht (Regional Court) found in favour of the Bank. Mr Dietzinger
then appealed to the Oberlandesgericht (Higher Regional Court), which quashed
the decision given at first instance.
- The Bank then appealed on a point of law to the Bundesgerichtshof, which held
that an interpretation of Directive 85/577 was necessary in order to determine the
dispute. It therefore referred the following question to the Court for a preliminary
ruling:
'Where a contract of guarantee or suretyship is concluded under German law
between a financial institution and a natural person who is not acting in that
connection in the course of his trade or profession, in order to secure a claim by
the financial institution against a third party in respect of a loan, is it covered by
the words "contracts under which a trader supplies goods or services to a
consumer" (Article 1(1) of Council Directive 85/577/EEC of 20 December 1985 to
protect the consumer in respect of contracts negotiated away from business
premises, OJ 1985 L 372, p. 31)?'
- By its question, the Bundesgerichtshof is asking in effect whether a contract of
guarantee concluded by a natural person who is not acting in the course of a trade
or profession is covered by Directive 85/577.
- Mr Dietzinger and the Commission consider that Directive 85/577 applies to a
contract of guarantee by virtue of the directive's aim, which is to protect those
consumers who conclude a contract where, because it involved 'doorstep selling',
they were unable to prepare themselves for its negotiation. Like a purchaser, a
guarantor undertakes to perform obligations and is even more in need of protection
since he receives no consideration in exchange for his commitment.
- In the Commission's view, Article 1 of Directive 85/577 is applicable to any contract
concluded between a natural person and a trader who, in the course of his business
activities, supplies goods or services to consumers in general, even if the contract
in question does not involve such consideration. In referring to 'contracts under
which a trader supplies goods or services to a consumer', the directive is simply
making clear that its scope is not restricted to sellers of goods.
- The German, Belgian, French and Finnish Governments, on the other hand,
consider that guarantees are not covered by Directive 85/577, essentially because
a guarantee is not a contract 'under which a trader supplies goods or services to
a consumer' within the meaning of Article 1.
- According to those Governments, the wording of the provision implies that goods
or services are supplied by a trader to a consumer who relies on the protection
afforded by Directive 85/577, so that it is not enough for the trader to be a supplier
of goods or services in general. They point out that such an interpretation is
strongly suggested by the English version of the directive ('contracts under which
a trader supplies goods or services to a consumer'). In circumstances such as those
of the instant case, the guarantor's commitment gives rise to no consideration, in
the sense that the guarantor receives no goods or services from the trader to whom
the commitment was given.
- Those Governments argue further that Directive 85/577 does not cover guarantees;
if it did, the directive would have contained specific rules providing, in particular,
for the fate of the contract whose performance is guaranteed by the guarantor in
the event of his exercising the right of cancellation. Consequently, protection of
guarantors is a matter for national law alone. In particular, the French
Government argues that, since Directive 85/577 does not govern the effects, on the
principal contract, of possible invalidity of a contract of guarantee, such guarantees
must, in view of their ancillary nature, be excluded from the scope of the directive.
- The Court observes that, according to Article 1, Directive 85/577 applies to
'contracts under which a trader supplies goods or services to a consumer' which
are concluded away from the trader's business premises, unless the trader was
expressly requested by the consumer to visit him with a view to the negotiation of
the contract.
- In determining whether a contract of guarantee securing performance of a credit
agreement by the principal debtor can fall within the scope of Directive 85/577, it
should be noted that, apart from the exceptions listed in Article 3(2), the scope of
the directive is not limited according to the nature of the goods or services to be
supplied under a contract; the only requirement is that the goods or services must
be intended for private consumption. The grant of a credit facility is indeed the
provision of a service, the contract of guarantee being merely ancillary to the
principal contract, of which in practice it is usually a precondition.
- Furthermore, nothing in the wording of the directive requires that the person
concluding the contract under which goods or services are to be supplied be the
person to whom they are supplied. Directive 85/577 is designed to protect
consumers by enabling them to withdraw from a contract concluded on the
initiative of the trader rather than of the customer, where the customer may have
been unable to see all the implications of his act. Consequently, a contract
benefiting a third party cannot be excluded from the scope of the directive on the
sole ground that the goods or services purchased were intended for the use of the
third party standing outside the contractual relationship in question.
- In view of the close link between a credit agreement and a guarantee securing its
performance and the fact that the person guaranteeing repayment of a debt may
either assume joint and several liability for payment of the debt or be the guarantor
of its repayment, it cannot be excluded that the furnishing of a guarantee falls
within the scope of the directive.
- Moreover, the possible termination of a contract of guarantee concluded in the
context of 'doorstep selling' within the meaning of Directive 85/577 is merely one
particular situation where the question may arise as to the effect of the possible
invalidity of an ancillary contract upon the principal contract. In those
circumstances, the mere fact that the directive contains no provision governing the
fate of the principal contract where the guarantor exercises the right of
renunciation conferred by Article 5 cannot be taken to mean that the directive does
not apply to guarantees.
- However, it is apparent from the wording of Article 1 of Directive 85/577 and from
the ancillary nature of guarantees that the directive covers only a guarantee
ancillary to a contract whereby, in the context of 'doorstep selling', a consumer
assumes obligations towards the trader with a view to obtaining goods or services
from him. Furthermore, since the directive is designed to protect only consumers,
a guarantee comes within the scope of the directive only where, in accordance with
the first indent of Article 2, the guarantor has entered into a commitment for a
purpose which can be regarded as unconnected with his trade or profession.
- The answer to the question referred to the Court must therefore be that, on a
proper construction of the first indent of Article 2 of Directive 85/577, a contract
of guarantee concluded by a natural person who is not acting in the course of his
trade or profession does not come within the scope of the directive where it
guarantees repayment of a debt contracted by another person who, for his part, is
acting within the course of his trade or profession.
Costs
24. The costs incurred by the German, Belgian, French and Finnish Governments and
by the Commission of the European Communities, which have submitted
observations to the Court, are not recoverable. Since these proceedings are, for
the parties to the main proceedings, a step in the action pending before the
national court, the decision on costs is a matter for that court.
On those grounds,
THE COURT (Fifth Chamber),
in answer to the question referred to it by the Bundesgerichtshof by order of
11 January 1996, hereby rules:
On a proper construction of the first indent of Article 2 of Directive 85/577/EEC
of 20 December 1985 to protect the consumer in respect of contracts negotiated
away from business premises, a contract of guarantee concluded by a natural
person who is not acting in the course of his trade or profession does not come
within the scope of the directive where it guarantees repayment of a debt
contracted by another person who, for his part, is acting within the course of his
trade or profession.
WatheletMoitinho de Almeida
Edward
JannSevón
|
Delivered in open court in Luxembourg on 17 March 1998.
R. Grass
C. Gulmann
Registrar
President of the Fifth Chamber
1: Language of the case: German.