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Prof. Diana Cerini European Contrac Law Part II- Lesson 1

Prof. Diana Cerini European Contrac Law Part II- Lesson 1 . The European Contract law. What is a contract? . Remembering from part I: absence of a European definition (see slide Part I)

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Prof. Diana Cerini European Contrac Law Part II- Lesson 1

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  1. Prof. Diana CeriniEuropean Contrac Law Part II- Lesson 1

  2. The European Contract law. What is a contract? • Remembering from part I: absence of a European definition (see slide Part I) • Common law: contract is an agreement between two parties whereby one makes an offer that is accepted by the other and there is some mutual exchange of value. Offer, acceptance and consideration are the three fundamental aspects of all common law contracts. • Civil law countries: definition in statutes, codes…..

  3. The relation “B to C”: consumer protection in European law Some preliminary questions: Who is the “consumer”? Consumers v. professionals Why should the consumer be protected? How can the consumer be protected?

  4. Some “applications” of consumer protection laws and the so called “list of EU consumer fundamental rights: • The rules concerning unfair contract terms (dir. EC/ 93/13 • Consumer credit contracts and the problem of over-indebtedness of consumers and families • The rules concerning a fair information and transparency • The right of withdrawal: when and how? • The protection given by the Control Authorities

  5. THE UNFAIR CONTRACT TERMS DIRECTIVE (93-13-CEE) AND THE IMPACT ON FINANCIAL CONTRACTS Questions: • When a contract term is unfair • Who is protected by the directive • Why the directive is important for products contarct as well as for financial and insurance contracts in a European perspective

  6. A CONTRACT TERM IS UNFAIR WHEN: • It has not been individually negotiated; • It is contrary to the requirement of good faith; • It causes significant imbalance in the parties contractual rights and obligations to the detriment of the consumer.

  7. THE CONSUMER The consumer is a natural person who is acting for purposes which are outside his business Example: Miss Love buys an insurance contract against fire for her house in the countryside

  8. THE PROFESSIONAL • WHO IS THE PROFESSIONAL? • The seller or supplier of goods and services and more in general the natural person who is acting for purposes relating to his trade, business or profession, whether publicly owned or privately owned.

  9. UNFAIR CONTRACT TERMS IN INSURANCE CONTRACT: some examples • The insurer is granted special rights to rescind the contract; • The insurer is entitled to rescind the contract unilaterally without stating why; • The insurer is entitled to terminate the contract at very short notice, while the insured party is required to give much longer notice; • A penalty clause entitles the insurer to retain part of the premium on termination of the contract; • The insurer is allowed excessively long deadlines to pay out compensation; • The use of arbitration isthe only mean of protection accorded

  10. OTHER EXAMPLES: • INSURANCE CONTRACTS: The insurer is granted special rights to rescind the contract after an insured event occurs; or the travel agency cancels the trip unilateral rescission; • TRAVEL AGENCY: The travel agency provides for a penalty clause which entitles the professional to retain a large part of the sum on termination of the contract while in case of cancelling of the trip nothing is due to the consumer; • IN GENERAL: The standard form provides that in case a controversy arises the competent court will be that of Rome while the contract is entered into in Milan and the consumers lives in fact there.

  11. How can I fight against an unfair term? • I can fight alone individual action • I can “fight” with a consumer association or any other organisation having a legitimate interest to act collective action or class action.  Suggested reading during the class….

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