UNFAIR CLAUSES – Clarification on the concept of consumer under directive 93/13, in the context of a credit agreement with a dual professional and extra-professional purpose

In a ruling of June 8, 2023 (C570/21), the CJEU confirms that a person who has entered into a credit agreement for both professional and extra-professional purposes, jointly with their spouse can be considered a consumer within the meaning of Directive 93/13 when the professional purpose is so limited that it does not predominate in the agreement; this being determined by quantitative and qualitative criteria.

In the case at hand, a mixed credit agreement was concluded between a married couple and a bank, with the amount intended for the repayment of debts of the husband’s company on one hand, and for the repayment of household debts and the financing of renovations in the couple’s home on the other hand. The conclusion of this credit agreement was subject to the repayment of the professional debts. The applicants contested a clause in the credit agreement, concerning the valuation of the monthly repayments on the loan, arguing that it was an abusive clause under Directive 93/13 on unfair terms in contracts between professionals and consumers, as it had not been individually negotiated.

The referring court questions whether, in this context, the applicant could be considered as a “consumer” within the meaning of the directive, given the existence of a connection between the professional activity and the contract, albeit not a predominant one, and that, without a professional use of the credit, it would not have been possible to grant the credit for a non-professional purpose. In other words, what are the relevant criteria for determining whether a person qualifies as a consumer?

On the first preliminary question, the CJEU concludes that Article 2(b) of Directive 93/13 defining “consumer” must be interpreted as including “a person engaged in business activity who entered into an agreement concerning a loan indexed to a foreign currency together with a joint-borrower who is not engaged in business activity, which loan is intended to be used partly for the business purposes of one of the borrowers and partly for purposes unconnected with his or her business activity, and not only where business use is so marginal as to be negligible in the overall context of the agreement.”

The Court recalls the principle that when interpreting a provision of EU law, one must consider its wording, as well as its context and the objectives pursued by the relevant regulation. Thus, by referring to the wording of Article 2(b) of Directive 93/13, the Court first establishes that the status of consumer must be determined in the light of a functional criterion, i.e., by assessing whether the contractual relationship falls within the scope of activities outside the exercise of a profession. Secondly, the Court assesses the context and objectives of the provision: as it applies to any contract between a professional and a consumer that has not been individually negotiated, the CJEU concludes that it is in fact the quality of the contracting parties that must be assessed, and not whether they are acting in the course of their professional activity or not. This is particularly relevant since the directive aims to redress the imbalance in which the consumer finds themselves, requiring a broad understanding of the concept., Additionally, for the sake of coherence in EU law, the Court considers the interpretation of the concept contained in other regulations, noting that the definitions are “broadly equivalent”, and that their recitals can therefore help to clarify the legislator’s intention. In particular, recital 17 of Directive 2011/83, which states that “where the contract is concluded for purposes partly within and partly outside the person’s trade and the trade purpose is so limited as not to be predominant in the overall context of the contract, that person should also be considered as a consumer. ” The Court adds that this analysis is even more relevant as it is corroborated by recital 18 of Directive 2013/11 and recital 13 of Regulation no. 524/2013 (even though these acts post-date the facts of the dispute). Finally, while the Gruber judgment, under the Brussels Convention, assesses the notion of consumer according to whether the professional use is marginal to the point of having a negligible role in the overall context of the transaction at issue, the court rejects this strict interpretation and refuses to apply it here. It therefore concludes that if the professional purpose is so limited that it does not predominate in the overall context of this contract, the applicant may be considered a consumer, despite the dual purpose of the credit agreement.

On the second question, the CJEU considers that in order to determine whether the professional purpose is so limited that it does not predominate in the contract, “the referring court is required to take into consideration all the relevant circumstances surrounding that contract, both quantitative and qualitative.” The Court recommends a global approach, factoring in all the elements of the case (terms of the contract, nature of the goods or services covered by the contract, purpose). It establishes several criteria, neither exhaustive nor exclusive: on the one hand, a quantitative criterion, the distribution of the borrowed capital between professional and non-professional activities, and on the other hand, non-quantitative criteria: the fact that only one of the borrowers is pursuing a professional purpose, or the fact that the lender has made the credit conditional on a partial allocation of the amount to the repayment of professional debts.

In addition, the applicant requested the effects of the present decision to be limited in time, but the CJEU refused, pointing out that this is only possible where two criteria are met – the good faith of the interested parties and the risk of serious disturbance – which were not present in the case in point.