the consumer's rights directive (week 9)

Ar t i c l e s

The Consumer Rights Directive – An Assessment of itsContribution to the Development of EuropeanConsumer Contract Law

EL IZABETH HALL*, GERA INT HOWELLS** and JONATHON WATSON***

Abstract: Following a turbulent three year legislative process the Consumer Rights Directivewas adopted in October 2011. Less ambitious than the original proposals, the Directivenevertheless extends the maximal harmonisation approach to a number of aspects concerningthe pre-contractual information duties and right of withdrawal in B2C off-premises anddistance contracts and also introduces other new features to the consumer acquis. The follow-ing paper focuses primarily on the new European rules concerning pre-contractual informa-tion obligations and the right of withdrawal. In so doing the authors will demonstrate that inspite of some of the steps forward, the Directive is overall a conservative consolidation thatalso in some respects takes a number of steps backwards. Its contribution to the developmentof European consumer contract law is therefore limited, although some of the new measuresshow an appreciation of the impact of behavioural economics for the most part it follows arather traditional approach.

Résumé: Après le processus législatif bien chargé de ces trois dernières années, la directive surles droits des consommateurs a été adoptée en octobre 2011. Moins ambitieuse que les prop-ositions originales, la directive étend néanmoins l’harmonisation maximale à un certainnombre d’aspects concernant les obligations d’informations précontractuelles et le droit derétractationdans les contrats B2C entre absents ou à distance et elle ajoute aussi quelquesaspects nouveaux à l’acquis des consommateurs. L’article se concentre d’abord sur les nou-velles règles européennes relatives aux obligations précontractuelles d’information et au droitde rétractation. En faisant cela, les auteurs démontreront qu’en dépit de quelques avancées, ladirective n’est qu’ une consolidation conservatrice et est même en recul sur certains aspects. Sacontribution au développement d’un droit européen des contrats de la consommation est dèslors limitée. En effet, bien que certaines mesures montrent une certaine prise en compte del’impact de l’économie comportementale, pour la plus grande part, la directive adopte uneapproche plutot traditionnelle.

Zusammenfassung: ImOktober 2011 wurde nach einem turbulenten Gesetzgebungsverfah-ren die Verbraucherrechterichtlinie verabschiedet. Obwohl sich die neue Richtlinie in weitenTeilen von dem ursprünglichen Entwurf unterscheidet, erstreckt sich der Ansatz der Vollhar-monisierung weiterhin auf die vorvertraglichen Informationspflichten und das Widerrufs-

* Lecturer in Law, University of Sheffield.** Professor of Commercial Law, University of Manchester.*** Research assistant, Centre of European Private Law, Westfälische Wilhelms-Universi-

tät, Münster. The authors thank Professor Reiner Schulze for his helpful commentsduring the drafting of this paper.

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recht in B2C Fernabsatz- und Haustür-Verträgen, welche den Schwerpunkt des folgendenAufsatzes bilden. Zudemwerden einige weitere kleinere Neuregelungen der Richtlinie ange-sprochen. Im gesamten Aufsatz erläutern die Autoren, dass die neue Richtlinie insgesamt einezurückhaltende Konsolidierung bildet und einige Aspekte der Richtlinie eher Rückschrittedarstellen. Der Beitrag der Richtlinie zu der Entwicklung des europäischen Vertragsrechtskönnte daher einerseits als beschränkt angesehen werden, obwohl andererseits die Einbezie-hung der Verhaltensökonomie neben herkömmlichen Ansätzen positiv hervorzuheben ist.

I Introduction

This paper is about the Consumer Rights Directive1 (‘Directive’; ‘CRD’).Given the amount of controversy and academic commentary on the originalproposal,2 one might have expected a deluge of commentaries on the actualDirective. This has not happened. The reason for this is obvious. The orig-inal proposal made in the light of the Green Paper on the Review of theConsumer Acquis3 attempted to incorporate four existing directives. Themajor areas of controversy in a scheme seeking to move towards full har-monisation were sales law (especially remedies) and unfair terms; these havenow been removed, therefore the underlying minimum harmonisation direc-tives in these areas – Unfair Terms Directive4 and the Consumer Sales Di-rective5 – continue to remain in force. The remaining areas of pre-contractualinformation duties and withdrawal rights mainly seek to bring coherency toexisting rules, which were for the most part introduced by European law6

1 Directive 2011/83/EUof the European Parliament and of theCouncil on consumer rights,amending Council Directive 93/13/EEC and Directive 1999/44/EC of the EuropeanParliament and of the Council and repealing Council Directive 85/577/EEC and Direc-tive 97/7/EC of the European Parliament and of the Council OJEC 2011 L 304/64.

2 COM(2008) 614 final. See eg G. Howells and R. Schulze (eds),Modernising and Harmo-nising Consumer Contract Law (Munich: Sellier, 2009); B. Jud and C. Wendehorst (eds),Neuordnung des Verbraucherprivatrechts in Europa? (Vienna: Manz, 2009); H.-W.Micklitz and N. Reich, ‘Crónica de una muerte anunciada: The Commission Proposalfor aDirective onConsumer Rights’ (2009) 46CommonMarket LawReview 471–519;H.Schulte-Nölke and L. Tichy (eds), Perspectives for European Consumer Law (Munich:Sellier, 2010); P. Rott and E. Terryn, ‘The Proposal for a Directive on Consumer Rights’ 3(2009) Zeitschrift für Europäsiches Privatrecht 456–488 and C. Twigg-Flesner andD. Metcalfe, ‘The Proposed Consumer Rights Directive – Less Haste, More Thought?’3 (2009) European Review of Contract Law 368–391.

3 COM(2006) 744 final.4 Council Directive 93/13/EEC on unfair terms in consumer contracts OJEC L 95/29.5 Directive 1999/44/EC of the European Parliament and of the Council on certain aspectsof the sale of consumer goods and associated guarantees OJEC L 171/12.

6 In particular, Council Directive 85/577/EEC to protect the consumer in respect of con-tracts negotiated away from business premisesOJEC L 372/31 and Directive 97/7/EC ofthe European Parliament and of the Council on the protection of consumers in respect ofdistance contracts OJEC L 144/19.

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and are therefore easier to place on a fully harmonised basis as nationaltraditions are less affected.7

Nevertheless, this attempt to bring coherency and structure are importantdevelopments that deserve commentary, not least because they form the bed-rock on which the proposed Regulation for a Common European Sale Law8 isbased. It also represents an extension, albeit in a targeted way, of the principleof maximal harmonisation. However, it also may be viewed as cementing arather formal view of the role of information and the right of withdrawal. Theopportunity has not been used to take full advantage of the insights of behav-ioural economics.9 This might, for example, have looked to the introduction,where appropriate, of more personalised information.10 This is on the onehand surprising as the Commission has shown great interest in the topic andhas hosted two events on the insights of behavioural economics for consumerpolicy,11 but perhaps it shows the difficulty of legislating for such approachesin general consumer law. On the positive side, when we consider some of thenew rights granted in the catch all Chapter IV, which has the rather under-stated heading ‘Other Consumer Rights’, we shall see that behavioural eco-nomics does seem to have played a role. First we turn to consider the infor-mation duties and right of withdrawal in the Directive.

7 Full harmonisation is not applied fully even in these areas; for example, it does not affectthe application of a payment threshold in off-premises contracts (art. 3(4)); any addi-tional information obligations for contracts other than distance and off-premises con-tracts; or national language requirements for pre-contractual information (art. 6(7)).

8 COM(2011) 635 final.9 C. Sunstein and R. Thaler, ‘Libertarian Paternalism is not an Oxymoron’ (2003) 70University of Chicago Law Review 1159–1202 also their bookNudge (NewHaven: YaleUniversity Press, 2008); S. Bainbridge ‘Mandatory Disclosure: A Behavioural Analysis’(2000)University of Cincinnati LawReview 102–134; C. Jolls, C. Sunstein andR. Thaler,‘A Behavioural Approach to Law and Economics’ (1998) 50 Stanford LawReview 1471–1550; C. Sunstein (ed), Behavioral Law and Economics (New York: Cambridge Univer-sity Press, 2000); J. Hanson and D. Kysar, ‘Taking Behaviouralism Seriously: The Pro-blem ofMarketManipulation’ (1999) 74NewYorkUniversity LawReview 630–749 and‘Taking Behaviouralism Seriously: Some Evidence of Market Manipulation’ (1999) 112Harvard Law Review 1420–1572; R. Ellickson, ‘Bringing Culture andHuman Frailty toRational Actors: A Critique of Classical Law and Economics’ (1989) 65 Chicago-KentLaw Review 23–55; R. Korbkin and T. Ulen, ‘Law and Behavioural Science: Removingthe RationalityAssumption fromLaw and Economics’ (2000) 88California LawReview1051–1144.

10 O. Bar Gill and F. Ferrari, ‘Informing Consumers About Themselves’ (2010) 3 ErasmusLaw Review 93–119.

11 How Can Behavioural Economics Improve Policies Affecting Consumers? 28 Novem-ber 2008, Brussels; Behavioural Economics, So What: Should Policy-Makers Care? 22November 2010, Brussels.

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II Consumer Information Duties

1 Structure

The pre-contractual information obligations are covered inArticles 5–8. Thesefour articles are divided across two chapters: Chapter II, comprising only theconsumer information for contracts other than distance or off-premises con-tracts – a new feature of EU consumer contract law – contains Article 5.Articles 6–8 of Chapter III cover the ground in the present acquis, namelythe consumer information obligations for distance and off-premises con-tracts.12

Despite the consumer information duties only being in four articles, theyinvolve extensive detailed rules encompassing a total of 64 sub-paragraphscontaining a variety of rules relating, inter alia, to the scope of application,the content of the information, the point at which the information is to begiven, the burden of proof and formal requirements. Although the MemberStates will transpose this Directive in different manners depending on howtheir national consumer protection laws are structured,13 greater transparencyin the form of separate articles pertaining to the different aspects would havemade the labyrinth of provisions easier to negotiate through.

It is striking that the European legislator has not chosen to opt for a moresystematic approach by sampling the newmenus devised by teams of academ-ics.14 Some lessons might have been learnt from the method adopted in, forexample, the Acquis Principles and the Draft Common Frame of Reference(‘DCFR’) of using overarching articles,15 in particular – as shall be demon-strated below – on ‘clarity and form of information’.16

Nevertheless, despite maintaining the need to continue to distinguish betweendistance and off-premises contracts, rather than the umbrella term of ‘con-

12 The remaining articles in Chapter III cover the right of withdrawal in distance and off-premises contracts. For criticism of this structure see R. Schulze, ‘The right of with-drawal’, in Schulte-Nölke and Tichy (eds), n 2 above, 17.

13 For example, someMember States will integrate the rules into their present civil code, egGermany, or into a Consumer code, eg Italy, or in a separate legislation eg the UnitedKingdom.

14 In particular, Research Group on the Existing EC Private Law (Acquis Group), Princi-ples of the Existing ECContract Law (Acquis Principles) Contract II, General Provisions,Delivery of Goods, Package Travel and Payment Services (Munich: Sellier, 2009); StudyGroup on a European Civil Code/Research Group on the Existing EC Contract Law(Acquis Group) (eds), Principles, Definitions andModel Rules on European Private Law– Draft Common Frame of Reference (Munich: Sellier, 2009).

15 A suggestion raised inG.Howells andR. Schulze, ‘Overview of the ProposedConsumerRights Directive’, in Howells and Schulze (eds), n 2 above, 24.

16 Art. 2:204 ACQP; art. II–3:106 DCFR.



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tracts negotiated away from business premises’,17 the Directive has at leastattempted in some respects to create a semblance of an ‘overarching structure’.The pre-contractual information duties in the Doorstep Selling and DistanceSelling Directives have been subjected to considerable changes. However, thepossible effects of some of these changes may do more harm than good.

2 Scope of application

A new feature of the Directive vis-à-vis the present consumer acquis is theinclusion in Article 5 of an information obligation to be fulfilled by the traderin a contract other than a distance or an off-premises contract. The obligationapplies in sales and service contracts not concluded in a manner that featuresall the required characteristics of either a distance or off-premises contract(Articles 2(7) and 2(8), respectively).

One may be forgiven in assuming that, due to the heading of this chapter andthis article, this information requirement is rather broad in nature. However,in considering whether this information obligation indeed applies there are anumber of factors to consider: Firstly, Article 3(3) contains a list of contracts towhich the Directive as a whole does not apply, either due to their subjectmatter18 or the manner in which they are concluded.19 Although this limitsthe otherwise broad application of the general duty, some of the types ofexcluded contracts are themselves subject to specific pre-contractual informa-tion duties.20 Secondly, Article 5(1) provides that the information inArticle 5(1)(a)–(h) need not be provided if it is already apparent from thecontext. Unfortunately, here no direction is given as to how this is to beunderstood.21 Lastly, Article 5(3) provides that Member States shall not berequired to apply Article 5(1) to contracts involving day-to-day transactionsperformed immediately at the time of their conclusion; however, theDirective,again, offers no insight as to what constitutes a ‘day-to-day’ transaction.

In consideration of these exceptions, the spectrum of ‘other’ contracts towhich this information obligation applies is much narrower than at firstglance. The instances whereby the trader would be subject to this obligationare, for example, the sale of goods via distance communication, but not within

17 As favoured in the Acquis Principles (art. 5:A-01 ACQP) and the DCFR (art. II–5:201DCFR).

18 Art. 3(a)–(k) CRD.19 Art. 3(l) and (m) CRD.20 Eg art. 2(d) CRDon financial services (ConsumerCredit Directive 2008/48) and art. 2(h)

CRD on timeshare contracts (Timeshare Directive 2008/122).21 For criticism of this point with regard to the Proposal for a Consumer Rights Directive

(COM(2008) 614 final) see A. Nordhausen-Scholes, ‘Information Requirements’, inHowells and Schulze (eds), n 2 above, 223–224.



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the scope of an organised distance selling scheme (as required under Ar-ticle 2(7));22 or the sale of goods that would not fall under the ‘day-to-day’category eg cars, furniture, computers or contracts which are not performedimmediately at their conclusion.

However, the inclusion of the Article 5 obligation is an example of a rule thatmay do more harm than good. Despite this narrow scope of application onehas to also consider that the Unfair Commercial Practices Directive23 (UCPD)contains an indirect duty to inform consumers of ‘material information’,whereby the failure to do so may constitute a misleading practice (Article 7(4)UCPD).24 Article 3(2) CRD excludes situations covered by EU rules coveringspecific sectors, but as a general law such as the UCPD can hardly be said togovern a ‘specific sector’, does Article 5 within its scope impliedly repeal theconflicting rules under the UCPD, resulting in the lowering of consumerprotection?

Although the Directive strives at full harmonisation, under Article 5(4) theMember States remain free to adopt or maintain additional pre-contractualinformation requirements to such ‘other’ contracts. As such the article couldbe said to display a ‘minimum harmonisation’ character. In this instance itwould seem the European legislator heeded to academic warnings concerningthe potential impact of full harmonisation of this rule on national contractlaws.25

Where distance contracts are concerned, a most welcome change is the clar-ification of the status of auctions concluded online; a subject that was ap-proached differently in the Member States.26 Firstly, in contrast to the Dis-tance Selling Directive, auctions are not included in the list under Article 3 ofcontracts excluded from the scope of application of the Directive. As such, theprovisions of the Directive will apply to all auctions, irrespective of whether

22 Although the Member States may decide to extend the rules on distance contracts tothose ‘distance’ contracts in which this requirement is not fulfilled, cf Recital 13.

23 Directive 2005/29/EC of the European Parliament and of the Council concerning unfairbusiness-to-consumer commercial practices in the internal market and amending Coun-cil Directive 84/450/EEC, Directives 97/7/EC, 98/27/EC and 2002/65/EC of the Euro-pean Parliament and of the Council and Regulation (EC)No. 2006/2004 of the EuropeanParliament and of the Council OJEC L 149/22.

24 T.Wilhelmsson, ‘Misleading Practices’, in G. Howells, H.-W. Micklitz and T. Wilhelms-son, European Fair Trading Law (Aldershot: Ashgate, 2006) 148.

25 B. Jud and C.Wendehorst, ‘Position Paper’, in Jud andWendehorst (eds), n 2 above, 192;Micklitz and Reich, n 2 above, 487; Rott and Terryn, n 2 above, 467; Redaction Com-mittee of the Acquis Group, ‘Position Paper on the Proposal for a Directive on Con-sumer Rights’, in Schulte-Nölke and Tichy (eds), n 2 above, 167, 172.

26 See, for example, C. Riefa, ‘A Dangerous Erosion of Consumer Rights’, in Howells andSchulze (eds), n 2 above, 178–179; H. Schulte-Nölke, C. Twigg-Flesner and M. Ebers(eds), EC Consumer Law Compendium (Munich: Sellier, 2007) 323–324.



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they are concluded in an auction house either in person or via telephone, or onan online auction platform. In the former context, if the consumer attends inperson then there may be information duties under Article 5: presumably, anauction would not constitute a day-to-day transaction. Here a problem mayarise with the information to be provided about the identity of the trader –does this concern the auctioneer or the trader on whose behalf he is acting?Nonetheless, providing information about a trader on whose behalf another isacting is not an information obligation covered under Article 5(1).27 However,some light could be shed on this matter by jumping forward to Article 6(3).Here, in a public auction (as defined under Article 2(13)), the informationabout the trader may be replaced by the equivalent details for the auctioneer.For online auctions or bids made via telephone in a public auction, it wouldappear that the Directive makes no distinction. In each case a distance contractwill have been concluded and the information under Article 6(1) will have tobe provided to the consumer. The question then becomes more crucial underthe Directive as to whom is to be considered the ‘trader’ and therefore subjectto the information obligation though there is also the duty to provide details ofa trader on whose behalf another trader is acting.

3 Information to be given

a) ‘Other’ contracts

Article 5(1) contains a catalogue of information obligations concerning eightdifferent subject-matters, each in turn consisting of various different elements.However, the extent to which the information on these matters is to be pro-vided is limited by a number of factors: Firstly, the information need not beprovided if it already apparent from the context. Secondly, in some instancessome of the information requirements need not be fulfilled because they arenot applicable either to the subject-matter or the conditions of the contract.28Finally, the notion of ‘appropriate information’ applies to the main character-istics of the goods and services; what is considered to be appropriate dependson the manner in which the information is presented and the nature of thegoods or service.

Although Article 5 can be considered a new feature in EU contract lawthrough the creation of a direct duty, one nevertheless is to bear in mind theaforementioned list of ‘material information’ in Article 7(4) UCPD. For themost part, this ‘material information’ in the UCPD overlaps in part with theinformation in Article 5(1);29 however there are some deviations that give rise

27 Cf art. 7(4)(b) UCPD.28 Art. 5(1)(c) CRD on additional freight, delivery or postal charges; (d) on payment and

delivery arrangements.29 Cf art. 5(1)(a)–(d) CRD and art. 7(4)(a)–(d) UCPD.



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to questions concerning the problem of internal coherency within Europeanlaw. For example, there is no requirement under Article 5(b) for the trader toprovide – if necessary – the consumer with information on the identity andgeographical address of a trader on whose behalf he is acting though failure todo so might constitute a material omission under the UCPD; however, thequestion has been posed above of the continuing validity of this provision. Inany event, the lack of internal consistency at EU level – particularly where fullharmonisation is concerned – remains a cause for concern.

b) Distance and off-premises contracts

The information to be given in distance and off-premises contracts is coveredin Article 6(1). This article consists of 20 different points of information, eachof which contains further details as to the information to be given. This ex-tensive catalogue of information that is to be given in distance and off-prem-ises contracts also forms an integral part of the contract.30 The new informa-tion requirements represent a monumental change to the informationrequirements for doorstep selling (previously limited only to informationon the right of withdrawal31), but also expands upon the catalogue of infor-mation to be provided under the Distance Selling Directive.32

The catalogue of information under Article 6(1) can be divided into manda-tory and relevant information, though in both instances the information pro-vided forms an integral part of the contract and cannot be altered absentexpress agreement (Article 6(5)). Mandatory information concerns the infor-mation that always has to be given, irrespective of the subject-matter or termsof the contract. Such information covers, for example, the main characteristicsof the goods or services, the identity of the trader and contact information, thetotal price and other costs, information on delivery and payment arrangementsand a reminder of the existence of the legal guarantee.33 Fortunately, someconsideration was given to the structuring of this catalogue so that mandatoryinformation is given at the beginning and in what could perhaps be describedas a hierarchy of importance. Whether – aside from the mandatory informa-tion – other information under Article 6(1) is to be given depends upon itsrelevance to the particular contract to be concluded. Sometimes the duty onlyarises if there is something to inform about ie if there is a complaint handlingpolicy, after-sales service and commercial guarantees or relevant codes of con-duct.34 For example, if the contract concerns the sale of computer software, the

30 Art. 6(5) 5 CRD; for criticism of this term see Nordhausen-Scholes, n 21 above, 225.31 Art. 4 of Directive 85/577/EEC.32 Art. 4(1) of Directive 97/7/EC.33 Art. 6(1)(a)–(e) and (l) CRD.34 Art. 6(1)(g), (m) and (n) CRD.



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trader will have to provide information on the right of withdrawal,35 thefunctionality36 (ie how the content can be used37) and the interoperability38

(ie compatible hardware and software required in order for the content tofunction39).

The aforementioned example serves also as an illustration of some of the newadditions to the items of pre-contractual information compared to the Dis-tance Selling Directive. In general, there has been an overhaul of the previouspre-contractual information duties. This is to be expected from a full harmo-nisation directive, as the European legislator has gone to much greater lengthsto define the content of the rules, trying to leave no stone unturned, although itunfortunately did not go to the same lengths to define some of the terms used,despite their relevance for full harmonisation,40 for example ‘identity of thetrader’ and the loose example of ‘such as the trading name’ (Article 6(1)(b)). Itis important to emphasise that with this extensive list of information it wouldappear that the European legislator has set in stone what it considers to be theinformation a consumer requires when concluding an off-premises or distancecontract, although according to some commentators, other aspects – such asthe languages available for conclusion of the contract – could have also beenincluded.41 Despite the full harmonisation one has to bear in mind that thecatalogue of information stipulated in the Directive for distance and off-prem-ises contracts cannot be expanded upon by the Member States; this of coursedoes not prevent traders from giving additional information that may be rel-evant for the contract.42

Particularly where new sales methods and new technologies are concerned – inparticular the purchase of so-called ‘apps’ for mobile devices – it is importantthat the rules are sufficiently ‘future-proof’ to cover as many eventualities aspossible. Only time will tell how effective the rules of the Directive are atwithstanding the rapid expansion of the products in the digital goods market.Nevertheless, although the full harmonisation of the pre-contractual informa-tion duties was an important step in removing a barrier to access to the internalmarket for traders, the absence of some rules (eg on language) together with anever-evolving array of products and services does raise the question whether

35 Art. 6(1)(h)–(k) CRD.36 Art. 6(1)(r) CRD.37 Recital no 19.38 Art. 6(1)(s) CRD.39 Recital no 19.40 Underlining the importance of clear definitions for full harmonisation see Redaction

Committee of the Acquis Group, n 25 above, 168.41 Micklitz and Reich, n 2 above, 488; Rott and Terryn, n 2 above, 467; Redaction Com-

mittee of the Acquis Group, n 25 above, 172.42 Art. 3(6) CRD.



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the full harmonisation of the rules rather – in spite of such a large catalogue ofinformation – favours the trader than the consumer, whom the duties areintended to benefit.43

4 Timing

In general, the information is to be provided to the consumer before he isbound by a contract or any corresponding offer. The information is thereforealways to be provided prior to the acceptance of the offer, but need not neces-sarily be provided before the offer has been made unless the offer is one madeby the consumer to which they are bound. However, there are some variationsto this general rule.

a) Distance contracts

Other aspects regarding the timing of particular information in distance con-tracts also feature in the Directive under Article 8 (formal requirements). Thetiming of such information is influenced by the manner in which the distancecontract is concluded; as this can take place in a number of different forms (egtelephone, fax, letter, e-mail etc) it is only to be expected that there are specificrules tailored to accommodate the particular characteristics of the modes ofcontract formation.

Firstly, in a contract concluded by ‘electronic means’44 the consumer is to bemade aware – directly before he places his order – of the information con-cerning the main characteristics of the product or service, the total price andother charges, the duration of the contract and conditions for its termination(where applicable) and the minimum duration of the consumer’s contractualobligations (where applicable).45 The requirement of ‘directly places his or-der’ appears to suggest that the information is to be given immediately beforethe consumer clicks on the ‘order’ button. Therefore if the Article 6(1) in-formation has been given some time in advance there may in any event be aneed to give this key information again to meet the requirement of immedi-acy. The problem is that the trader may not know when a consumer will placethe order, if say it is placed by e-mail. Where it is placed through an onlineordering form there is an easier opportunity to ensure the immediacy re-quirement is met. Furthermore, Article 6(2) also features a new addition topre-contractual information obligations: the consumer is also to be made

43 Twigg-Flesner and Metcalfe, n 2 above, 371.44 The CRD does not define ‘electronic means’; however, a definition does feature in

art. 1(2) of Directive 98/34/EC on Information Society services.45 Art. 6(2) CRD.



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aware, when placing his order, that the order he makes implies an obligationto pay.46

Secondly, if the consumer purchases the good or service via an internet site, heis to be given – at the beginning of the ordering process – information on anydelivery restrictions (eg countries to which the trader does not deliver) and theaccepted means of payment (eg which credit card, debit card etc). However,clarification is required with respect to when the ordering process is consid-ered to begin: is the information to be given before the individual goods areplaced in the virtual ‘shopping basket’ or only once all the goods have beenselected and the transaction can be completed? If it is the latter, considerableinconvenience could be caused to a consumer who may have spent time andmoney selecting goods to purchase only to be informed much later on that thetransaction cannot be completed.

Thirdly, Article 8(5) provides that when calling a consumer with a view toconcluding a distance contract a trader is to disclose at the beginning of theconversation his identity or the identity of those on whose behalf the call isbeing made. One might see some debate about what was meant by the ‘begin-ning’, but one can imagine a strict approachwill be taken to prevent consumersbeing lured into a discussion before realising they are being sold a product orservice.

5 Formal requirements

In general, the information is to be provided in a ‘clear and comprehensiblemanner’.47 Recital 34 in the preamble to the Directive offers an interestinginsight into how this particular formal requirement can be fulfilled: in provid-ing the information the trader should ‘take into account the specific needs ofconsumers who are particularly vulnerable because of their mental, physical orpsychological infirmity, age or credulity in a way which the trader couldreasonably be expected to foresee’. Especially in contexts – such as in othercontracts besides distance and off-premises selling – where there are no stand-ards for requiring the information to be provided in writing (eg plain andintelligible language), the comments in the recital may be particularly helpfulin assessing any information provided only orally.

a) Distance and off-premises contracts

Articles 7 and 8 of the Directive contain separate specific formal require-ments for each of these contracts. However, there are some overarching

46 See below II 6 b) for criticism.47 Art. 5(1), 6(1) CRD.



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features that will be discussed before the variations are discussed in moredetail below.

In both distance and off-premises contracts, the information underArticle 6(1)is to be provided in a clear and comprehensible manner.48 In addition, theinformation on the right of withdrawal in points (h), (i) and (j) of Article 6(1)may, in both distance and off-premises contracts, be provided through the useof themodel instructions onwithdrawal.49 This is a new andwelcomed featureof the Directive which is beneficial to both consumers and traders.50 However,although the Directive in this instance removes an obstacle for traders, it doesnot remove all obstacles posed by diverging national rules: Article 6(7) pro-vides that the Member States may maintain or introduce in their national lawlanguage requirements regarding the contractual information so as to ensurethat such information is easily understood by the consumer. Nevertheless, thefull harmonisation of the formal requirements will lead to a removal of thespecific measures imposed by some Member States to ensure that particularinformation is provided in a specific format, for example, the Belgian require-ment that such information be on the first page of the contract in bold or theUnited Kingdom rule that the cancellation notice be in a separate box.51

b) Distance contracts

In addition to the overarching requirements mentioned above, the Directivealso contains other formal requirements applicable in distance contracts; asidefrom the requirements in Article 6(1), (4) and (7), the formal requirements fordistance contracts are to be found in Article 8. Article 8(1) contains the formalrequirements that are generally applicable. The information is to be madeavailable in a way appropriate to the means of distance communication andin plain and intelligible language. If the information is on a durablemedium52 itis to be legible. It can be seen from this article that there is a clear recognition ofthe limitations posed by the various means of distance communication, yetthat it is nevertheless possible to filter out common features.

Unfortunately, the relative simplicity presented by Article 8(1) is lost wherecontracts concluded by electronic means are concerned. For such contracts the

48 Art. 6(1) CRD.49 Art. 6(4) CRD refers to the use of the model instructions on withdrawal set out in Annex

I(A). The information requirements concerning withdrawal will be satisfied if the traderfills out the form correctly.

50 Rott and Terryn, n 2 above, 471.51 For example, the specific requirements concerning information on right of withdrawal;

eg art. 79(1)(2) Belgian Trade Practices Act; s 7(5)(a) The Cancellation of Contracts madein a Consumer’s Home or Place of Work etc Regulations 2008, SI 2008 no 1816.

52 As defined in art. 2(10) CRD.



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following formal requirements are applicable in addition to the general re-quirement in Article 8(1): ‘clear and prominent manner’ (Article 8(2)); ‘easilylegible manner’ and ‘unambiguous formulation’ (Article 8(3)); ‘clearly andlegibly’ (Article 8(3)). Although these requirements emphasise the importanceof the underlying policy behind such specific requirements,53 they do howeverraise some questions as to their meaning. What is, for example, the differencebetween ‘easily legible’ and ‘legible’? Can ‘easily legible’ be equated with‘clear and prominent’? Is ‘plain and intelligible language’ a lower standardthan ‘unambiguous’?54 It can of course be questioned whether the need tocater to the variations in means of distance communication inevitably leadsto different standards; however, as we assume no difference is intended therecould nevertheless have been a greater degree of terminological consistency.One can also observe an unusual paradox: although the formal requirementsare intended to give the consumer certainty as to the transaction, the require-ments create uncertainty for those who must adhere to them.

c) Off-premises contracts

In keeping with this inconsistent approach, despite the continuous use of‘distance and off-premises contracts’ the formal requirements for off-premisescontracts precede those for distance contracts. As can be expected for off-premises contracts, there is no need for a multitude of different rules. Therequirements are simply clear and comprehensible manner (Article 6(1)) andon paper, or another durable medium if the consumer agrees (Article 7(1)).Furthermore, the information is to be legible and in plain, intelligible language(Article 7(1)). Again, these latter requirements could have been contained inone provision á la the ‘clarity and form of information’ provision in theDCFR55 and Acquis Principles.56

6 Consequences of failure to inform

a) ‘Other’ contracts

The Directive does not stipulate the consequences of a breach of the informa-tion duties in ‘other’ contracts. It is for theMember States to provide ‘effective,proportionate and dissuasive’ penalties.57 In contrast to the information re-

53 See eg Recital 39 CRD.54 Similar criticism was also raised with regard to the Proposal for the Directive, Redaction

Committee of the Acquis Group, n 25 above, 159–160.55 Art. II–3:106 DCFR.56 Art. 2:204 ACQP.57 Art. 24 CRD.



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quirements in distance and off-premises requirements, the Directive does notstipulate that there is a reversal of the burden of proof in ‘other’ contracts.

b) Distance and off-premises contracts

The Proposal for the Consumer Rights Directive was seen by some authors asan opportunity to harmonise the remedies in European contract law forbreaches of pre-contractual information duties.58 Despite suggestions of pos-sible remedies,59 the European legislator has nevertheless opted for the (di-verse) regulation at national level.60 However, at least in one respect there isharmonisation: under Article 6(9) the burden of proof of compliance with theinformation requirements is on the trader.

However, for some specific types of information the European legislator hasforeseen for distance and off-premises contracts a variety of different conse-quences: the consumer is not to bear costs or charges of which he is notinformed;61 an extension of the withdrawal period if the consumer is notprovided with information on his withdrawal right;62 and no cost for theconsumer of returning of the goods if the trader has not informed the con-sumer thereof.63

Such consequences are applicable in both distance and off-premises contracts;however, the Directive has also introduced a specific remedy in contractsconcluded by electronic means: if the trader does not comply with his obli-gation under Article 8(2) to inform the consumer that the placing of the orderimplies an obligation to pay, the consumer is not bound by the contract ororder.64 One could of course view this rule as a means of preventing a con-sumer from being deceived into concluding a contract with a trader and in-curring costs; therefore the information obligation is to be welcomed from theperspective of consumer protection. However, the rule does raise a number ofquestions. Beginning with the precise nature of the consumer’s ‘order’ – is it tobe considered an offer, or is to be viewed as an acceptance? The phrase ‘placingthe order entails an obligation to pay’ appears to suggest that it is to be viewed

58 Twigg-Flesner and Metcalfe, n 2 above, 381.59 Eg art. 2:208 ACQP and art. II–3:109 DCFR.60 For examples of national sanctions in relation to the Doorstep Selling and Distance

Selling Directives see Schulte-Nölke, Twigg-Flesner and Ebers, n 26 above, 96–97 and336–339.

61 Art. 6(6) CRD.62 Art. 10(1) CRD.63 Art. 14(1) CRD.64 For criticism of this rule see H. Eidenmüller, N. Jansen, E.-M. Kieninger, G.Wagner and

R. Zimmermann, ‘Der Vorschlag für eine Verordnung über ein Gemeinsames Europä-isches Kaufrecht’ (2011) Juristenzeitung 277.



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as the latter, which does not accord with the view held in some MemberStates.65

The latter question raises the issue of the actual consequence of breach. If the‘order’ can be perceived as an acceptance, does the trader, in the event ofbreach, nevertheless have to fulfil his contractual obligations and the consumermay keep the goods he receives without charge – in other words, ‘if I don’t tellyou that you have to pay, you don’t’? Or, if the consumer is not bound by theorder, does this therefore mean that the order, ie the offer, is non-binding andno contract is concluded? An affirmation to the former question is clearly veryfavourable to the consumer in those circumstances in which the order is con-sidered an acceptance. However, if the consumer is not bound by the ‘order’ –as his declaration of contractual intent – and no contract been concluded, yetperformance has been effected, the rule wouldmost likely bemore disadvanta-geous to the consumer, as under the applicable national law of restitution, hewould probably have to bear the cost of returning what he has received,whereas the trader will merely have to return any payment that has beenmade.Clarification of the meaning of this vague clause is therefore imperative, es-pecially as it may lead, ironically, to diverging levels of consumer protection ifMember States apply it in different ways despite the use of full harmonisation.

7 Post-contractual information duties

The information duties to be fulfilled by the trader are not limited to pre-contractual duties. On the contrary, the trader is also subject to post-contrac-tual obligations that are regulated in the Directive, though only in the contextof distance and off-premises contracts.

In off-premises contracts the consumer is to be provided with a copy of thesigned contract or the confirmation of the contract.66 This has to be on paperor, with the express consent of the consumer, on another durable medium.Article 7(2) does not stipulate the content of the confirmation, which bizarrelyis only discovered on reading Article 7(4)(a) (in the context of performance ofservices). This states the confirmation of the contract is to contain all theinformation in Article 6(1). In contrast the equivalent rule to Article 7(2) fordistance contracts, Article 8(7), describes the content of the confirmation. Inaddition, the Directive does not stipulate when this obligation is to be fulfilledin off-premises contracts; whereas in distance contracts the confirmation ofthe contract that has been concluded is to be provided at the latest at the timeof delivery or provision of the services.67

65 Eg United Kingdom where it is viewed as an invitation to treat, see L. Hoffmann and E.Macdonald,The Law of Contract (7th ed, Oxford:OxfordUniversity Press, 2010) 21–22.

66 Art. 7(2) CRD.67 Art. 8(7)(a) CRD.



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8 Summary

The pre-contractual information duties in consumer contracts have developedconsiderably since the Doorstep Selling and Distance Selling Directives. Theevolution of the European Union, in both a political and social sense, togetherwith rapid advances in electronic sales methods and an increased variety ofgoods and services, have meant that a legislative reply to these demands wasnecessary, in particular to protect consumers. The pre-contractual informa-tion duties in the Directive serve as a response to these demands by introduc-ing new and innovative features designed to increase the level of consumerprotection; however, at the same time raising questions as to the precisemeaning and implications of the rules. The lack of clarity concerning themeaning of particular terms and concepts, as well as their fully harmonisednature, is problematic and may pose more obstacles to trade than originallyintended.

It is difficult to deny that – at European level – the Directive raises the levelof consumer protection in distance and off-premises contracts. It probablyalso does not lower the protection significantly vis-à-vis national law of anyMember State. However, as can be seen from developments in recent years,full harmonisation may still pose a risk for consumer protection. Althoughan extensive, detailed catalogue of information is to be provided to theconsumer, nevertheless there are some gaps that remain or – more impor-tantly – some gaps could emerge in the years to come. In this respect, fullharmonisation does not favour the consumer; one can only hope that theEuropean legislator reacts quickly enough to meet the demands of the mar-ket.

Furthermore, although the Directive will – hopefully – not feature in nationallegislation with its present structure, it nevertheless highlights the problem ofinconsistency within the present acquis. In some respects, it could be consid-ered unfortunate that the academic DCFR was not used as a ‘toolbox’; in sodoing some of the unusual structural aspects may have been avoided, creating aclear and comprehensible framework for the national legislators.

III Right of Withdrawal

Full horizontal harmonisation of the rules on the right of withdrawal in dis-tance and off-premises contracts has been introduced in an attempt to addressbarriers to cross-border trade and legal fragmentation existing as a result of therules in the minimum harmonisation Doorstep Selling and Distance SellingDirectives. The remaining provisions in Chapter III of the Directive set outthe duration and start of the withdrawal period (Article 9), extension of thewithdrawal period for failure provide information on the right (Article 10),



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exercise of the right (Article 11), the effects of withdrawal on the obligations ofthe trader and the consumer (Articles 12, 13 and 14) and on ancillary contracts(Article 15), and the exceptions to the right (Article 16).

The function of the right of withdrawal is to allow the consumer in a distancesale the opportunity to test and inspect goods which he is not able to see whencontracting; whereas in an off-premises sale the right is provided ‘because ofthe potential surprise element and/or psychological pressure’.68 Thus the ra-tionale for the right in distance sales is information asymmetry, whilst for off-premises sales the rationale is the potential for a psychological deficit69 whichmay interfere with the consumer’s ability to make a rational decision.70 In thispart, the attempt to standardise the rules and to increase legal certainty forboth consumers and traders is reviewed in the light of the objective of a highlevel of consumer protection71 and the appropriate balance between consumerand trader interests. It is concluded that the Directive has to some extent beensuccessful in harmonising rules on the duration and exercise of the right: inother areas legal certainty is only partially achieved and at times appears tocome at the expense of consumer protection.

1 Harmonisation of the duration, start and limitation ofthe withdrawal period

The need for certainty is most clearly expressed in respect of the duration ofthe withdrawal period, when it starts, and any extension of the time limit forexercising the right for breach of information duties.72

68 Recital 37. There is an extension of the right of withdrawal compared to the DoorstepSellingDirective, which applied to unsolicited contracts made away from business prem-ises. The extension to solicited contracts had already been adopted in fiveMember States,see Schulte-Nölke, Twigg-Flesner and Ebers, n 26 above, 91, and most recently, the UK.See H. Eidenmüller, ‘Why Withdrawal Rights?’ (2011) European Review of ContractLaw 1, 4 for criticism of the extension to solicited off-premises contracts without anyevidence of critical reflection by the Commission. Recital 21 explains an off-premisescontract should include where the consumer may be under potential psychologicalpressure or may be confronted with an element of surprise, irrespective of whether ornot the visit is solicited.

69 E. Terryn, ‘The Right of Withdrawal, the Acquis Principles and the Draft CommonFrame of Reference’, in R. Schulze (ed), Common Frame of Reference and ExistingEC Contract Law (2nd ed, Munich: Sellier, 2009) 147.

70 Eidenmüller, n 68 above, 3, distinguishes the justifications on the basis of informationasymmetries (distance selling) and exogenously distorted consumer preferences (door-step transactions).

71 Recital 7.72 Recital 40, and Recital 43 in respect of extension of the withdrawal period for non-

compliance with the trader’s obligation to inform.



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The uniform withdrawal period of fourteen days in Article 973 seems appro-priate for full harmonisation74 and represents an alignment with other direc-tives giving a right to withdraw.75 Although it might be argued the justificationof information asymmetry is weaker in the context of some distance sales,76 theDirective’s cross-border aspirations for internet sales justify a fourteen dayperiod.77 The rules for calculating the period have been simplified,78 withwelcome clarification of the term ‘day’ (a calendar day) and that the periodruns from, but does not include, the day of the relevant event.79 For goods, theperiod runs from receipt of the goods, with clarification of the position formultiple deliveries.80 For services the withdrawal period runs from the day ofconclusion of the contract,81 with the same rule applying to contracts forquasi-services82 (that is, contracts for the supply of water, gas or electricitywhen sold in an unlimited volume or quantity, district heating83 or digitalcontent not supplied on a tangible medium), although it is not clear whyone provision could not address both services and quasi-services, as in themodel information form. Overall, the conclusion must be that the rules haveachieved the best compromise in the interests of legal certainty.

The same cannot be said of the twelve month extension to the withdrawalperiod for failure to provide the consumer with information on his right to

73 Although ten days was suggested in the Annex to the Green Paper on the Review of theConsumer Acquis, n 3 above, para 4.8.1.

74 Only a few member states provide for longer periods, see Schulte-Nölke, Twigg-Flesnerand Ebers, n 26 above, 477.

75 Directive 2002/65/EC concerning the distance marketing of consumer financial services(with the exception of life insurance and personal pension operations) OJEC L 271/16;Directive 2008/48/EC on credit agreements for consumers OJEC L 133/66; Directive2008/122/EC on the protection of consumers in respect of certain aspects of timeshare,long-term holiday product, resale and exchange contracts OJEC L 33/10.

76 See, for example, Eidenmüller, n 68 above, 9, who suggests that information asymmetryin contracts for experience goods could be addressed by a trader signalling quality and anoptional, as opposed to mandatory, right of withdrawal.

77 Recital 5. See also M. Loos, ‘Rights of Withdrawal’, in Howells and Schulze (eds), n 2above, 248 concludes that there is no reason to have a different duration for distance sales.

78 The UK implementing regulations for Directive 97/7 contain seven different computa-tions.

79 Art. 14(2) CRD. Recital 41 applies Regulation 1182/71 determining the rules applicableto periods, dates and time limits.

80 For multiple goods ordered together but delivered separately and goods delivered inmultiple lots or pieces, the withdrawal period runs from receipt of the last good, lot orpiece; for contracts for regular delivery of goods during a defined period, the period runsfrom receipt of the first goods.

81 Art. 9(2)(a) CRD.82 Art. 9(2)(c) CRD. The term is used here to describe goods which are classified ‘neither

sales contracts nor as service contracts’ (Recital 19).83 Defined in Recital 25.



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withdraw.84 It is subject to criticism on three counts: (i) it is out of line with thesolution in the directives on timeshare, credit and financial services,85 (ii) itrepresents a significant reduction in the protection of the consumer in an off-premises contract, where under the Doorstep Selling Directive there was nolimitation86 and (iii) it represents a consumer disbenefit because it does notacknowledge that the consumer may wish to change his mind later on beinginformed subsequently of some other piece of vital information87 – which hecannot do if there has been timely information of the right to withdraw.88 Thisfavours the trader interest, by emphasising the need to counter the risk ofabuse by a consumer who is not informed of the right (or indeed other in-formation), but nevertheless knows about it, withdrawing at a later datemerely because he can. There is no explanation for this policy shift.89

2 Exercise of the right

The rules on exercise of the right of withdrawal provide the clearest evidenceof the quest for a standardised, yet flexible, rule, but still have the appearanceof being a compromise.90 The consumer can inform the trader he is withdraw-ing by either (i) using a model form91 or making ‘any other unequivocal state-ment’,92 or (ii) electronically where the trader gives an option to submit themodel withdrawal form or any other unequivocal statement on the trader’swebsite.93 According to the model instructions, the ‘unequivocal statement’can be a letter sent by post, fax or e-mail. The preamble94 makes it clear that theconsumer should be allowed to withdraw in his own words, and this might be

84 In a mystery shopping exercise in 2011, information on the right of withdrawal wasmissing in 18 % of online purchases; see European Consumer Centres, Online Cross-Border Mystery Shopping – State of the e-Union (September 2011), para 4.5.2.

85 A potentially limitless period (Directive 85/577 and Directive 2008/48), to extension ofthe period by three months (Directive 97/7) to an extension of threemonths for omissionof key information and one year for failure to supply the withdrawal form (Directive2008/122).

86 See case 481/00 Heininger v Bayerische Hypo-und Vereinsbank AG [2001] ECR I-9945(ECJ).

87 For example, on a characteristic of a complex good such as a car. See also Howells andSchulze, n 15 above, 17.

88 It is not clear whether there will also be failure where information is given, but not in aclear and comprehensible manner as required by art. 6(1) CRD.

89 Micklitz and Reich, n 2 above, 498.90 Under Directive 85/577, rules on exercise of the right are left to national law whereas

Directive 97/7 is silent on the matter.91 Art. 11(1)(a) CRD. The model form is in Annex 1(B).92 Art. 11(1)(b) CRD.93 Art. 11(3) CRD. The trader must acknowledge receipt on a durable medium without

delay.94 Recital 44.



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by letter, telephone or returning the goods ‘with a clear statement’, but thenpoints out that since the burden of proof is on the consumer it is in his interestto make use of a durable medium. A rule permitting withdrawal by returningthe goods without any statement (tacit withdrawal), as incorporated in theDCFR95 and the Acquis Principles96 would be more consumer-friendly.97However, adoption of the consumer-friendly dispatch rule for communicationof withdrawal98 meets the objectives of legal certainty and addresses the pro-blem of potential delay when using the post to withdraw, which may be aparticular issue in the case of a cross-border contract.99

3 The rules on the effect of withdrawal

It is the rules on the effect of withdrawal which represent the greatest illus-tration of (i) the competing demands of the need to minimise legislative bur-dens on business and a high level of consumer protection, (ii) the consequenceof merging two directives with different justifications, and (iii) the difficulty ofproviding a coherent set of rules in respect of goods and services.

According to the Directive, ‘[t]he obligations of the consumer in the event ofwithdrawal should not discourage the consumer from exercising his right ofwithdrawal’.100 The right to withdraw in the Doorstep Selling and DistanceSelling Directives was without cost to the consumer. In respect of doorstepsales the consumer was released from his obligations under the cancelledcontract and, according to Schulte,101 the parties were restored to their pre-contractual positions.102 For distance sales the only charge to the consumerwas the cost of returning the goods and, according to Messner,103 any obliga-tion on the consumer to pay compensation on exercise of the right had to takeinto account the purpose of the directive and the efficiency and effectiveness ofthe right of withdrawal. Under Article 12, exercise of the right operates toterminate the obligations of the parties to perform the contract,104 with certainobligations placed on the parties in the event of withdrawal. Thus the Direc-

95 Art. II–5:102 DCFR.96 Art. 5:102 ACQP.97 Howells and Schulze, n 15 above, 18.98 Art. 11(2) CRD.99 Loos, n 77 above, 264. It is also in line with Directives 2002/65, 2008/48 and 2008/122.

100 Recital 47.101 Case 350/03 Elizabeth Schulte, Wolfgang Schulte vDeutsche BausparkasseBadenia AG

[2005] ECR I-9215, para 88.102 The CJEU has held that this protection of the consumer is not absolute, see case 215/08

E Friz GmbH v Carsten von der Heyden [2010] ECR I-2947, para 44, 45.103 Case 489/07 Pia Messner v Firma Stefan Krüger [2009] ECR I-7315, para 29.104 Art. 12(a) CRD. Under art. 12(b) where the consumer has made an offer, the effect of

withdrawal is to terminate the obligations of the parties to conclude the contract.



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tive only goes so far in clarifying the effect of exercise of the right of with-drawal: if termination of the obligation to perform indicates prospective ratherthan retrospective effect, then the original contractual obligations are to beregarded as being replaced by new obligations relating to reimbursement andreturn. The Directive does not provide answers to the question of what is theimpact of the right of withdrawal on the contract law model.

TheDirectivemakes explicit the obligation of the trader to reimburse standarddelivery costs, clarifying the position for many traders who appeared to holdthe belief that delivery costs are independent of the right of withdrawal.105 Thisreimbursement places no burden on the trader, since the costs are control-lable:106 the risk of consumer abuse is addressed by requiring a consumer whochooses a more expensive means of delivery (for example express delivery, firstclass) to pay for it, provided he is informed this will be the case.107

On the other hand, the apparent strengthening of consumer protectionwith anobligation on the trader to reimburse within fourteen days from the day ofbeing informed of the consumer’s decision to withdraw108 may be more appa-rent than real. First, it may encourage the consumer to withdraw, but only if heknows about this requirement for prompt reimbursement. There is no require-ment in Article 6 to provide the consumer with the information:109 the infor-mation is included in the model instructions on withdrawal, but use of these isoptional.110 Second, the period has the potential to be longer than fourteendays where, for example, notification of withdrawal is sent by post just priorto expiry of the withdrawal period, as the trader’s obligation will not betriggered until he is ‘informed of the consumer’s decision’, that is, when hereceives it.111 Third, the trader may withhold reimbursing the consumer until

105 This argument was rejected in case 511/08 Verbraucherzentrale Nordrhein-WestfaleneV v Handelsgesellschaft Heinrich Heine GmbH [2010] ECR I-3047. Under Directive97/7, this obligation was implicit in art. 6(1) ‘the only charge that may be made . . . is thedirect cost of returning the goods’. Amystery shopping exercise on online cross-bordershopping showed that only 43% reimbursed the total amount; see EuropeanConsumerCentres,n 84 above, para 6.2.2.

106 V. Trstenjak and E. Beysen, ‘European Consumer Protection Law: Curia Semper DabitRemedium?’(2011) 48 Common Market Law Review 95–124, 117.

107 This provision avoids an alternative solution which regards the more expensive deliveryoption as a service which has to be paid for; see UK Office of Fair Trading, Guide forbusiness on distance selling, OFT 698 (September 2006), para 3.49.

108 Art. 13(1) CRD.109 The information requirements in art. 6(1)(h), (i) and (j) CRD make no reference to this

obligation on the trader.110 Art. 6(4) ‘The information referred to in points (h), (i) and (j) of paragraph 1 may be

provided by means of the model instructions on withdrawal set out in Annex 1(A).’111 Although arguably the deadline for the corresponding obligation on the consumer to

return the goods confers a similar benefit on the consumer in that they do not have to bereceived by the trader within the fourteen day period (art. 14(1) CRD).



he has received the goods back, or the consumer has supplied evidence ofhaving sent the goods back,112 whereas some might argue the trader shouldreimburse the payments received before there is any obligation to return thegoods.

The consequences of the exercise of the right to withdraw illustrate the aware-ness of the need to restrict the burden placed on the trader. With the exceptionof a specific provision in off-premises contracts for the collection of goodswhere they cannot be returned by post,113 there is no distinction between theobligations of the consumer in off-premises and distance sales. Nevertheless,standardised rules which ignore distinctions between distance and off-prem-ises selling, and contracts for goods and services,114 may leave a consumerwithout effective protection.

It would appear that for the consumer who has been informed of his right towithdraw in respect of contracts for goods, the standard rule on the effects ofwithdrawal is sufficient to protect both the off-premises and the distanceconsumer. However, there are risks that in practice the rules may be used todiscourage consumers from exercising their rights. The consumer is requiredto compensate the trader only where there has been a diminution in valueresulting from the handling of the goods other than is necessary to establishthe nature, characteristics and functioning of the goods. This duty to compen-sate only arises if the consumer has been informed of the right of with-drawal.115 It seeks to address situations of misuse, for example, wearing clothesrather than just trying them on; or using equipment. There may be a risk to theconsumer that he discovers when using goods that the product is not what hereally wanted and yet there may be cost to returning it. In Messner116 it wasconfirmed that the consumer in a distance sale117 could be required to paycompensation only for using the goods ‘in a manner incompatible with theprinciples of civil law, such as those of good faith or unjust enrichment’. TheDirective could be regarded as less consumer-friendly in that the consumercould act in good faith when using the goods – he would only be acting in badfaith if he had the intention to withdraw before using them. The benefit of thisprovision to the trader, however, is uncertain. In the event of litigation, thetrader would have to prove the diminution in value that resulted from theconsumer’s actions.118 In most cases this will not be sufficient to justify bring-

112 Art. 13(3) CRD.113 Art. 14(1) CRD.114 Cf the Proposal for a Common European Sales Law n 8 above, where the right of

withdrawal applies only to contracts for the sale of goods and related service contracts.115 Art. 14(2) CRD and Recital 47.116 Messner n 103 above, para 29.117 Under Directive 97/7.118 Messner n 103 above, para 26, 27.



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ing proceedings. The consumer’s obligation is therefore likely to be seen moreas a warning –whichwould be evenmore effective if the trader was required tomake a statement informing him how to avoid the risk of incurring it.

For services, however, there is an argument for differentiating between off-premises and distance contracts. Under the Directive, a consumer who exer-cises his right of withdrawal from a contract for services which has beenstarted at his express request is required to make a proportionate paymentfor the services received. This is reasonable in the distance contract context,since in many instances the consumer for services is in no different position tothe face-to-face purchaser with respect to the standard of service performedand so should be required to pay for services received.119 The right of with-drawal and refusal to pay for sub-standard work can be used as an alternativeto any contract law remedy for sub-standard performance of services120 andprovides the consumer with a more immediate and accessible remedy than asubsequent independent claim for breach.121 There is also protection throughrecognition that the contract price may be disproportionately high, but sincethe consumer must demonstrate that the agreed price is excessive,122 the bene-fit of this provision is doubtful. However, the rule is more objectionable whenapplied to off-premises contracts. The consumer in an off-premises contractfor services may be penalised by having to pay for services received where thejustification for protection (psychological pressure) is strong. Even the pro-tection provided by the requirements of trader compliance with informationobligations, or an express request by the consumer,123 before there is anyliability for the performance of services during thewithdrawal period amountsto nothing if there has been psychological pressure on the consumer not just topurchase but to agree to immediate performance. One thinks in particular ofcontracts for home improvement works made off-premises with an elderlyperson, where the trader commences performance before expiry of the with-drawal period.124 The Directive appears to provide little protection here.

On the other hand, for digital content not in a tangible medium, the Directiveappears to achieve the right balance between trader and consumer interests inoff-premises and distance contracts. If the consumer has not expressed prior

119 Service contracts where performance had been commenced with the consumer’s agree-ment before expiry of the withdrawal periodwere exempt from the right to withdraw inDirective 97/7, art. 6(3).

120 The example of dissatisfaction with the quality of a painting contract is given in IMCO11-0224 Information Note on the expected benefits of the Consumer Rights Directive.

121 Although the Directive should not affect national laws on contractual remedies, Recital14.

122 Recital 50.123 Art. 14(4) CRD.124 The Proposal specifically identified such contracts in Recital 31, stating that the con-

sumer should bear no cost for such services.



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consent to performance during the withdrawal period then there is no require-ment to pay. This is also the position if the consumer has not acknowledgedloss of the right or the trader has failed to provide confirmation of the contract.

4 The exceptions

The standardisation of exceptions from the right of withdrawal listed in Ar-ticle 16 represents clarification of existing exceptions which existed under theDoorstep Selling and Distance Selling Directives. Most of these are sensibleand non-controversial though one might take exception to the exemptioncovering car rental services provided on a specific date.125 This presumablyreflects the decision in easyCar,126 where car rental was described as a ‘trans-port service’ and exempt from the Distance Selling Directive on the groundsthat the trader would find it difficult to fill the empty place at short notice.However, the same argument could feasibly apply to a number of servicecontracts, and in any event according to Advocate General Trstenjak in easy-Car, a car hire firm does not suffer a disproportionate burden as a result ofexercise of the right.127 No explanation is provided in the preamble.128

5 The extent of full harmonisation

Although some aspects of the right of withdrawal are suitable for full harmo-nisation, two of the regulatory aspects have specifically been left to the Mem-ber States.129 Where the consumer has exercised his right to withdraw underthe Directive, an ancillary contract is automatically terminated without anycosts to the consumer.130 However, Article 15(2) provides that it is forMemberStates to lay down detailed rules on the termination of the ancillary contracts,described as contracts for goods or services supplied by the trader under arelated contract or on the basis of an arrangement between the trader and athird party.131 This does not provide for legal certainty.

Also left within the competence of the Member States is the retention of anyprohibition of payment during the withdrawal period for off-premises con-

125 Art. 16(l) CRD.126 Case 336/03 easyCar (UK) Ltd v Office of Fair Trading [2005] ECR I-1947.127 Para 62. See E. Hall, ‘Cancellation Rights in Distance Selling Contracts for Services:

Exemptions and Consumer Protection’ (2007) Journal of Business Law 683–700, 692.128 Recital 27. ‘Passenger transport services’ (not defined) are exempt from the Directive as

a whole (with some exceptions).129 See also n 7 above for other aspects not subject to full harmonisation.130 Except any supplementary delivery costs and any costs relating to the diminution in

value of goods or proportionate costs of services in art. 14 CRD.131 Art. 2(15) CRD. This definition aligns to the definition of an ancillary contract in

Directive 2008/48.



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tracts.132 Potential consumer problems of delayed or non-recovery of pay-ments where a prepaying consumer withdraws may justify a higher level ofconsumer protection:133 extending this provision to distance contracts, partic-ularly given the difficulties of cross-border enforcement of consumer rights,134would benefit the consumer, but may impede the cross-border aspirations ofthe Directive. Again, the provision does not aid legal certainty.

6 Summary

The Directive has been partially successful in introducing a uniform fourteenday withdrawal period and has thereby addressed legal fragmentation of theright of withdrawal. However, the protection provided by extending theperiod by twelve months where the trader fails to inform the consumer ofhis right of withdrawal (but only for breach of that one information duty) fallsshort of the objectives of regulatory harmonisation and a high level of con-sumer protection. The rules on exercise of the right are clearer but appear togive priority to evidential issues over effectiveness of the withdrawal right.The rule requiring reimbursement only of standard delivery costs strikes anappropriate balance. Likewise, the rule limiting liability for diminution invalue to that caused by excessive handling during the withdrawal period ap-pears to provide a fair solution on paper, but it remains to be seen how it will beapplied in practice.

However, there remains continuing lack of certainty over the effect of with-drawal on the contract and on any ancillary contract. The rules on payment forservices, with the exception of digital downloads, result in an undesirabledecrease in the level of protection currently afforded to the off-premises con-sumer.

IV Other rights

Chapter IVon other consumer rights are a rag bag of miscellaneous provisions.

132 Art. 9(3) CRD. This reverses art. 12(4) of the proposal, which had said that MemberStates could not prohibit payment within the withdrawal period. In case 205/07 Gys-brechts and Santurel Inter [2008] ECR-I-9947, the ECJ held that art. 29 EC (now art. 35TFEU) did not preclude national rules prohibiting payment within the withdrawalperiod in respect of distance selling, although such a prohibition may not extend torequiring details of a payment card.

133 Advocate General Trstenjak in Gysbrechts, para 79, 81.134 Micklitz and Reich, n 2 above, 500.



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1 Delivery

Article 18 follows the basic rule found in the Distance Selling Directive thatgoods should be delivered within thirty days. It then provides a procedurewhich in most cases should be followed of the consumer setting an additionalperiod for delivery which, if not complied with, then entitles him to terminatethe contract and obtain reimbursement of all sums paid without undue delay.Although the consumer must fix a period of extension, this solution gives theconsumer certainty that he can treat the contract as terminated once thatperiod has expired.

2 Passing of risk

Article 20 usefully clarifies that risk in goods will only pass to a consumer orthird party when they have physical possession of the goods. Risk only passeson delivery to a carrier if the carrier was commissioned by the consumer andnot offered by the trader.

3 Price transparency

Three provisions deal with price transparency and it can be argued are in-formed by behavioural economics to ensure that consumers make informedprice decisions.135 Article 21 requires any telephone line operated by a traderfor post sales customer care to be charged at no more than the basic rate. Thisprevents traders pricing the initial goods or services low in the hope of gainingfrom premium line charges for after sales service.

Of potentially great significance is Article 19 which prohibits fees for paymentexceeding the cost borne by the trader. In some sectors, notably air travel, feesfor payment can be a considerable proportion of the price. Often the full priceis only revealed at the end of the transaction. This drip feeding can distortconsumers’ perceptions for they may still anchor their assessment around theinitial price or be reluctant to waste the time invested up to that point. Thisshould help increase transparency and hence competition, though there maybe some debate about how to calculate the actual cost to the trader of the use ofmeans of payment methods as the different calculations of ‘Which?’, the UKconsumer group and the OFT demonstrate.136

One of the insights of behavioural economics is that consumers will morereadily tend to accept the default position. Therefore Article 22 seeks to

135 There is some useful emerging research on this theme – see UK Office of Fair Trading,The Impact of Price Frames on Consumer Decision Making, OFT 1226 (May 2010).

136 See UK Office of Fair Trading, Payment Surcharges, Response to the Which? Super-complaint, OFT 1349resp (June 2011), Annex C.



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‘nudge’137 consumers to consider and take responsibility for their choices byrequiring they expressly consent to extra payments beyond the remunerationagreed for the trader’s main contractual obligation. This consent cannot beachieved by default options the consumer is required to reject. Such pre-tickedboxes are prohibited. This is a positive step in ensuring informed consumerdecision-making.

4 Enforcement

The Directive has the typical rules on enforcement. Member States must haveadequate and effective means to ensure compliance. These should allow ac-tions to be brought by public bodies as well as consumer and professionalbodies having a legitimate interest.138 Penalties should be effective, propor-tionate and dissuasive.139 So long as the applicable contract law is that of aMember State, consumers may not waive the rights conferred on them and anycontract term directly or indirectly waiving or restricting the right is not bind-ing on the consumer.140 Member States should also take measures to informconsumers and traders of the provisions and where appropriate encouragetraders and code owners to inform consumers of their codes.141

5 Inertia selling

Somewhat out of place in the structure of the Directive is the provision inArticle 27 concerning inertia selling, namely that the consumer does not haveto provide any consideration for unsolicited services and that the absence of aresponse by the consumer does not constitute consent. This exception reflectsthe prohibition on inertia selling in the Distance Selling Directive142 and Un-fair Commercial Practices Directive143.

V Conclusions

The Directive represents another incremental growth in the scope of the EUconsumer acquis that reflects ‘maximal harmonisation’. During the debates onthe Directive there was much discussion of ‘targeted harmonisation’ but attimes it seemed to be so broad that there was hardly any targeting at all. The

137 Sunstein and Thaler, n 9 above.138 Art. 23 CRD.139 Art. 24 CRD.140 Art. 25 CRD.141 Art. 26 CRD.142 Art. 9 of Directive 97/7/EC.143 Point 29 of Annex I to Directive 2005/29/EC.



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final product is far more targeted on areas where there is a good deal ofconsensus that maximal harmonisation is appropriate. In the case of informa-tion duties it will ease the flow of goods by removing potential pitfalls fortraders in the form of national peculiarities, whilst common rules on the rightof withdrawal will promote certainty for both traders and consumers. How-ever, there is a risk that this advantage of harmonisation may be underminedby certain ambiguities in the terminology that may allow different nationalinterpretations to develop, for example, as regards compliance with the vari-ous formal requirements.144 Also it is disappointing that more advantage wasnot taken of themodels provided such as the Acquis Principles and theDCFR.The rules on information duties and withdrawal will now also form the bed-rock of the proposed Common European Sales Law. So the conclusion couldbe that the Directive is an unspectacular but useful consolidation with someinteresting new rules on fees for using payment cards and the use of defaultboxes. The policy behind these new elements clearly show elements of reflec-tion on behavioural economics and the hope must be that the Directive is notthe end of the EU reflection on information and right of withdrawal. Attemptsmust be made to apply lessons from behavioural economics in the future,rather than simply assume consumers are adequately protected by formallyproviding them with rights to information and withdrawal without consider-ing how effective these tools are in promoting consumer autonomy in thedecision-making process.

144 As criticised above under II 5 b).



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the consumer's rights directive (week 9)

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