Consumer protection extended to mixed-purpose contracts - CJEU in S.V. (Immeuble en copropriété) (C-485/21)

Last Thursday in the case S.V. (Immeuble en copropriété) (C-485/21) the CJEU provided us with new guidance as to the scope of the notion of a consumer.

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In the given Bulgarian case, an owner of an apartment in a building of a housing association (in co-ownership) concluded a contract with a company that was to provide management and maintenance of the communal areas of that building. The contract included terms on late payment fees, which ended up being contested as to their fairness (excessive amounts and lack of transparency) under the UCTD. The question was whether consumer protection framework was applicable at all to this situation.

The CJEU reminds that the notion of a 'consumer' is objective in nature and should be assessed by reference to a functional criterion (para 25). This means that is only relevant to consider whether the contract was concluded in the course of activities outside a trade, business or profession. Consequently, what is required of national courts it to establish whether the party in the given case, a natural person, 'does not use that apartment for purposes which fall exclusively within her trade, business or profession', as that would exclude that party from the scope of consumer protection (para 27). This is a welcomed confirmation that the 'consumer' notion applies broadly in mixed-purpose contracts, that is when consumers use goods for a mix of personal and professional purposes. The CJEU in this paragraph seems to imply that any mixed-purpose contract could be covered by consumer protection framework (by referring to 'exclusive' use for professional purposes). Further, in paragraph 32 of the judgment the CJEU specifically mentions situations where natural persons could use an apartment 'constituting his or her personal home for professional purposes also, such as in the context of salaried teleworking or in the exercise of a liberal profession'. Again, this is a great example of a modern, progressive approach to the interpretation of the notion of a 'consumer', considering the current realities of many goods being used simultaneously or alternatively for personal and professional purposes. 

Another interesting observation of the CJEU is that it is irrelevant whether some of the activities of a provider of services or a seller 'are the result of the need to comply with specific requirements relating to safety and town and country planning, laid down by the applicable national law' (para 30). Contractual terms reflecting such mandatory statutory provisions may not be tested for unfairness, pursuant to Article 1(2) UCTD, but that exclusion does not stretch as far as to encompass the contract as a whole. Consequently, other terms in that contract may be subject to the unfairness test (para 31). This is consistent with the past narrow interpretation of various UCTD's exceptions to its scope of application.