Directives 85/577/EEC on doorstep selling and 97/7/EC on distance selling – objectives and scope

Directives 85/577/EEC on doorstep selling and 97/7/EC on distance selling – objectives and scope

Ieva Baldina-Bruklite

Consumer Rights Protection centre of Latvia

Content

Introduction1. Directive 85/577/EEC on doorstep selling;2. Objectives of Directive 85/577/EEC on doorstep selling;3. Scope of Directive 85/577/EEC on doorstep selling;4. Important consumer’s rights under the Directive 85/577/EEC

on doorstep selling;5. Directive 97/7/EC on distance selling;6. Objectives of Directive 97/7/EC on distance selling;7. Scope of Directive 97/7/EC on distance selling;8. Important consumer’s rights under the Directive 97/7/EC on

distance selling;9. Proposal for a Directive of the European Parliament and of

the Council on consumer rights.

1. Directive 85/577/EEC on doorstep selling

• The Doorstep (direct) selling directive:• Indicates the contracts on which the Directive applies and

does not apply (Art.1,3); • Includes the definitions of “consumer” and “trader” (Art. 2);• Regulates information on cancellation rights and the process

of the usage of cancellation rights (Art. 4,5,7).


• The Doorstep (Direct) selling directive:• Is minimum harmonisation directive. MS are allowed to adopt

more favourable provisions to protect consumers in the field which it covers.

• Many MS have used these rights:• on definition of consumer;• on inclusion of situations other than those covered by Art. 3

of Doorstep selling directive or prohibiting doorstep selling of specific goods in general;

• not making use of restrictions/exemptions provided for by Doorstep selling directive;

• extending the time limits of usage of cancellation rights from doorstep contract;

• determining other instruments (such as licensing, time restrictions on doorstep selling a.o.).


• Other relevant legislation in the field:• Directive 2005/29/EC on unfair commercial practices;• Directive 1993/13/EEC on unfair contract terms;• Directive 1999/44/EC concerning sale of consumer goods

and associated guarantees;• a.o.

2. Objectives of Directive 85/577/EEC on doorstep selling

• To prevent disparity between MS legislation in the field of commercial practices used by traders in the doorstep (direct) selling;

• To improve the functioning of the common market by implementing common rules on doorstep selling;

• To protect consumers against unfair commercial practices in respect of doorstep selling;

• To equal the status of consumer in conclusion the doorstep contract with trader by giving consumer the cancellation rights from the doorstep contract and determining trader’s obligation to give the information to consumer about such kind of rights.

3.Scope of Directive 85/577/EEC on doorstep selling

• The Doorstep selling directive applies only to B2C relationship.

• Definition of “consumer”:• Consumer is “a natural person who (…) is acting for

purposes which can be regarded as outside his trade or profession” (Art. 2);

• Consumer can be only a natural person;• The purpose for conclusion of the contract should not be

linked with person’s trade or profession (not in present and not in future) (ECJ case Benincasa, C-269/95, ECJ case Di Pinto C-361/89);

• In case of conclusion of contract with “mixed purpose” the purpose linked with person’s trade should be very negligible in overall context of the contract (ECJ case Gruber, C-464/01).


• Implementation of “consumer’s” definition:• Many MS have introduced a common definition of

"consumer" applicable to several or all of their transposition laws for the individual consumer protection directives;

• In some MS definition is broader (for example, including legal persons).


• Definition of “trader”:• A “trader” is 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” (Art. 2).

• Many MS have implemented the broader concept of “trader” (for example, non profit organisations, state institutions are included in definition).


• The Directive’s provisions 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” (Art. 1 para. 1).


• A contract concluded in a situation in which a trader has invited a consumer to go in person to a specified place which is different from the premises where the trader usually carries on his business, in order to present to him the products and services he is offering, must be considered to have been concluded during an excursion organised by the trader away from his business premises (ECJ case Travel VAC, C-423/97);

• When a third party intervenes in the name or on behalf of a trader to negotiate or conclude a contract, the application of the Directive cannot be made subject to the condition that the trader was, or should have been, aware that the contract was concluded in a doorstep selling situation (ECJ case Crailsheimer Volksbank, C-229/04).


• Meaning of “contracts under which a trader supplies goods or services goods and services” in the Directive:

• 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 (ECJ case Bayerische Hypotheken- und Wechselbank, C- 45/96).


• The Directive applies to contracts for the supply of goods or services other than those concerning which the consumer requested the visit of the trader, provided that when he requested the visit the consumer did not know, or could not reasonably have known, that the supply of those other goods or services formed part of the trader's commercial or

professional activities (Art. 1 para. 2).


• The Directive applies to contracts in respect of which an offer was made by the consumer under conditions similar to those described although the consumer was not bound by that offer before its acceptance by the trader (Art. 1 para. 3).

• The Directive applies to offers made contractually by the consumer under conditions similar to those described where the consumer is bound by his offer (Art. 1 para. 4).

• That means that the consumer is able to withdraw from an offer made in a doorstep situation, irrespective of whether the offer is binding (as it usually is, e.g., under German law) or not binding (as it usually is, e.g., under English law).


• Exemptions from the scope of the Directive:• The MS may decide that the Directive shall apply only to

contracts for which the payment to be made by the consumer exceeds a specified amount. This amount may not exceed 60 ECU (Art. 3 para. 1);

• MS may not apply the Directive to contracts for the supply of goods or services having a direct connection with the goods or services concerning which the consumer requested the visit of the trader (Art. 3 para. 3).


• The Directive shall not apply to:• contracts relating to immovable property;• For example, sale of immovable property which is a

component of an investment scheme financed by a loan for which the negotiations prior to the conclusion of the contract were held in a doorstep-selling situation (ECJ case Deutsche Bausparkasse Badenia AG, C-350/03).

• contracts for the supply of foodstuffs or beverages or other goods intended for current consumption in the household and supplied by regular roundsmen;

• certain contracts concluded on the basis of a trader's catalogue;

• insurance contracts;• contracts for securities.

4.Important consumer’s rights under the Directive 85/577/EEC on doorstep selling

• Information notice about consumer’s cancellation rights;• Cancellation rights (at 7 least days from the receipt of the

notice).• A time-limit of one year from the conclusion of the contract,

where the consumer has not received the information about the cancellation rights can not be detemined (ECJ case Heininger, C-481/99) .

• MS is entitled to provide that the right of cancellation of the Directive may be exercised no later than one month from the time at which the contracting parties have performed in full their obligations under a contract for long-term credit, where the consumer has been given defective notice concerning the exercise of that right (ECJ case Hamilton, C‑412/06).

5. Directive 97/7/EC on distance selling• The Distance selling directive:• Includes the main definitions, such as “consumer”, “supplier”

(Art. 1);• Indicates the contracts on which the Directive does not

apply/applies partially (Art. 3); • Foresees prior information, that should be given to consumer

before conclusion of the distance contract (Art. 4);• Foresees information, that should be given to consumer in

confirmation of the information (Art. 5);• Regulates the conclusion of the contract of doorstep selling,

the usage of cancellation rights and exemptions from cancellation rights (Art. 5,6);

• Regulates performance of the contract, restrictions on the use of certain means of distance communication (Art. 7,10).

5. Directive 97/7/EC on distance selling

• The Distance selling directive:• Is minimum harmonisation directive. MS are allowed to adopt

more favourable provisions to protect consumers in the field which it covers.

• Many MS used these rights:• on broadening the notion of consumer (e.g. legal persons);• on broadening the notion of distance selling contract (e.g. no

organised distance selling scheme required);• not making use of restrictions/exemptions provided for by the

Directive;• extending the time limits of usage of cancellation rights from

distance contract.

5. Directive 97/7/EC on distance selling

• Other relevant legislation in the field:• Directive 2000/31/EC on electronic commerce;• Directive 2005/29/EC on unfair commercial practices;• Directive 2002/65/EC on distance marketing of consumer

financial services;• Directive 2002/58/EC on privacy and electronic

communications;• Directive 2007/64/EC on payment services;• a.o.

6.Objectives of Directive 97/7/EC on distance selling

• To promote cross-border distance selling;• To set common principles in all MS in the field of distance

selling;• To protect consumers concluding the contracts by using

means of distance selling;• To put consumers who purchase goods or services through

distance communication means in a similar position to consumers who buy goods or services in shops.

7. Scope of Directive 97/7/EC on distance selling

• Definition of “consumer”:• Consumer is a “natural person who, in contracts covered by

this Directive, is acting for purposes which are outside his trade, business or profession” (Art.1 para. 2).

• Definition of “supplier”:• Supplier is “any natural or legal person who, in contracts

covered by this Directive, is acting in his commercial or professional capacity” (Art.1 para. 3).

• Definition of "operator of a means of communication“:• “any public or private natural or legal person whose trade,

business or profession involves making one or more means of distance communication available to suppliers” (Art.1 para. 5).


• Definition of “distance contract”:• The “distance contract” is any contract:• concerning goods or services,• under an organised distance sales or service-provision

scheme run by the supplier,• that, for the purpose of the contract, makes exclusive use of

one or more means of distance communication up to and including the moment at which the contract is concluded (Art. 1 para.1).


• Definition of "means of distance communication“:• “Any means which, without the simultaneous physical

presence of the supplier and the consumer, may be used for the conclusion of a contract between those parties” (Art.1 para. 4).

• Means of distance communication are :• Unaddressed/Addressed printed matter;• Press advertising with order form;• Catalogue;• Electronic mail;• Facsimile machine (fax);• Television (teleshopping);• A.o. (Annex I of the Directive).


• Exemptions from the scope of the Directive are contracts:

• relating to financial services (for example, insurance and reinsurance operations, banking services, operations relating to dealings in futures or options);

• concluded by means of automatic vending machines or automated commercial premises;

• concluded with telecommunications operators through the use of public payphones;

• concluded for the construction and sale of immovable property or relating to other immovable property rights, except for rental;

• concluded at an auction (Art. 3 para. 1).


• Partial exemptions :• contracts for the supply of foodstuffs, beverages or other

goods intended for everyday consumption supplied to the home of the consumer, to his residence or to his workplace by regular roundsmen;

• contracts for the provision of accommodation, transport, catering or leisure services, where the supplier undertakes, when the contract is concluded, to provide these services on a specific date or within a specific period;

• “Contracts for the provision of transport services” includes contracts for the provision of car hire services (ECJ case Easycar ,C-336/03);

• in the case of outdoor leisure events, the supplier can reserve the right not to refund the money within 30 days to consumer in specific circumstances (Art. 3 para. 2).

8. Important consumer’s rights under the Directive 97/7/EC on distance selling

• Prior information in good time before conclusion of the distance contract (suplier’s identity, contact details, characheristics of the good or service, costs and the performance of the contract, withdrawal rights where applicable) (Art. 4);

• Written confirmation of the information in good time during the performance of the contract (plus information on procedures of usage of withdrawal rights, where to address complaints, after-sales services and guarantees which exist, the conclusion for cancelling the contract, where it is of unspecified duration or a duration exceeding one year) and consequences if this requirement is not fullfilled (prolongation a withdrawal period) (Art. 5);


• Right of withdrawal (7 days from delivery of goods of from conclusion of service contract) and supplier’s obligation to reimburse the sums paid by the consumer free of charge (not later than within 30 days) (Art.6);

• Suppliers are not allowed under a distance contract to charge the costs of delivering the goods to the consumer where the latter exercises his right of withdrawal (ECJ case Heinrich Heine, C-511/08);

• Suppliers may not claim compensation for the value of the use of the consumer goods acquired under a distance contract in the case of withdrawal by a consumer within the withdrawal period (ECJ case Messner, C-489/07).


• National rules which prohibit a supplier, in cross-border distance selling, from requiring an advance or any payment from a consumer before expiry of the withdrawal period can be adopted, but a prohibition, under those rules, on requesting, before expiry of that period, the number of the consumer’s payment card can not be adopted (ECJ case Santurel Inter BVBA, C‑205/07).


• Other important issues:• Supplier’s obligation to execute orders within 30 days (Art.7

para. 1);• Supplier may provide the consumer with goods or services of

equivalent quality and price provided that this possibility was provided for prior to the conclusion of the contract or in the contract (Art.7 para. 3);

• Restrictions on the use of certain means of distance communication without prior consent of consumer (automatic calling machine, automatic fax) (Art. 10).

9.Proposal for a Directive of the European Parliament and of the Council on

consumer rights.

• Maximum harmonisation directive (allows MS to adopt stricter rules only in concrete situations);

• Unifies Doorstep and Distance selling directives (definitions, information requirements);

• Implements common time period for usage of withdrawal rights (for both contracts 14 days);

• Establishes obligations for traders and consumers in case of withdrawal;

• Determines rules for performace of the contract and passing the risk.

Thank You for Your attention!

Directives 85/577/EEC on doorstep selling and 97/7/EC on distance selling – objectives and scope

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