Earlier today the Court of Justice issued the judgment in case C‑570/21, YYY. (Notion de consommateur). The case concerned, once again, the notion of the consumer under Directive 93/13/EEC on unfair terms in consumer contracts (UCTD). The Court has already dealt with similar problems in its earlier case law, recently e.g. in case C-485/21, S.V. (Immeuble en copropriété). The judgment confirmed that the notion of the consumer in mixed-purpose contracts under UCTD should be understood broadly. The ruling does not come as a surprise; what is nevertheless noteworthy is an explicit confirmation that the notion of the consumer in contract law is different from that in private international law. The Court, moreover, provided additional guidance on the interpretation of consumer notion in joint credit agreements.
The case involved a credit contract concluded between a bank and two married debtors, one of whom self-employed. The loan amount was devoted partly to the professional purposes and partly to the private purposes. Specifically, 35% of the loan was used to make outstanding payments for the company of one of the debtors, while the remaining 65% was used to used to finance renovation works in the debtors' house. Against this background, a question was raised whether the contract qualified as a business-to-consumer contract and fell within the scope of the UCTD.
"Not predominant" vs. "negligible" purpose
The referring court requested the interpretation of Article 2(b) UCTD, which defines the notion of the consumer, explicitly enquiring about the relevance of the Gruber case law in that context. To recall, the Court established in Gruber that a person who concludes a contract for goods intended for purposes which are in part within and in part outside his or her trade or profession may not rely on the special rules of jurisdiction, unless the trade or professional purpose is "so limited as to be negligible" in the overall context of the supply. This seemed to be at odds with the wording on mixed-purpose contacts found, among others, in Directive 2011/83/EU on consumer rights (CRD). Specifically, pursuant to recital 17 of the CRD 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.
As mentioned, already the previous judgments of the Court suggested that the Gruber test cannot be applied more broadly to consumer law, but is limited to the specific context of applicable law and jurisdiction. The Court has now made this distinction explicit. It drew attention to a close connection between the UCTD and the CRD, recently strengthened via the Omnibus Directive (para. 43). The Court emphasised that both directives follow the same main objective, namely to provide for a high level of consumer protection (para. 42). It also observed that a wording similar to that in recital 17 CRD can also be found in the ADR Directive and the ODR Regulation, suggesting that the legislator intended such a broader reading to have a horizontal nature (para. 45). Accordingly, the notion of the consumer under UCTD must be understood as also covering a person who concludes a dual purpose contract if the trade purpose is so limited as not to be predominant in the overall context of the contract.
The more restrictive reading of the consumer notion in mixed-purpose contracts continues to be relevant in the domain of private international law. Here, as the Court noted, additional objectives must be considered, namely the legal certainty and predictability of the jurisdiction. The more recent Schrems judgment does not undermine this reading (para. 47).
Joint credit agreements
Having clarified the outer boundaries of the consumer concept, the Court went on to provide more specific guidelines on its interpretation in the case at hand. Firstly, it stressed that the referring court should take all circumstances of the case into account, including the nature of the product or the service. In case of mixed-purpose credit contracts, the Court indicated that the scope of professional and personal components of the contract and the dominant purpose of the contract should be considered. The Court then went on to formulate more specific criteria, noting that they are neither exhaustive nor exclusive (para. 58). In particular, the quantitative breakdown of the borrowed sum between the two respective purposes may be an important criterion. However, also qualitative criteria may turn out to be relevant, e.g. the fact that only one of a larger number of debtors pursues a professional activity or that the granting of a loan, initially intended solely for private purposes, was made conditional upon the partial allocation of the borrowed amount to the repayment of trade-related debts.
Overall, the judgment in case C‑570/21, YYY, is a welcome ruling, dispelling some persisting doubts about the reading of consumer notion in different legal acts. Nonetheless, the differentiated interpretation may, in itself, pose practical challenges, as the second judgment issued on the same day illustrates.
