Parties
Grounds
Decision on costs
Operative part
Parties

In Case C-473/00,

REFERENCE to the Court under Article 234 EC by the Tribunal d'instance de Vienne (France) for a preliminary ruling in the proceedings pending before that court between

Cofidis SA

and

Jean-Louis Fredout,

on the interpretation of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29),

THE COURT

(Fifth Chamber),

composed of: M. Wathelet, President of the Chamber, C.W.A. Timmermans, D.A.O. Edward, A. La Pergola and P. Jann (Rapporteur), Judges,

Advocate General: A. Tizzano,

Registrar: L. Hewlett, Principal Administrator,

after considering the written observations submitted on behalf of:

- Cofidis SA, by B. Célice, avocat,

- the French Government, by G. de Bergues and R. Loosli-Surrans, acting as Agents,

- the Austrian Government, by H. Dossi, acting as Agent,

- the Commission of the European Communities, by D. Martin and M. França, acting as Agents,

having regard to the Report for the Hearing,

after hearing the oral observations of Cofidis SA, represented by B. Soltner, avocat, Mr Fredout, represented by J. Franck, avocat, the French Government, represented by R. Loosli-Surrans, and the Commission, represented by M. França, at the hearing on 17 January 2002,

after hearing the Opinion of the Advocate General at the sitting on 18 April 2002,

gives the following

Judgment

Grounds

1 By judgment of 15 December 2000, rectified by judgment of 26 January 2001, received at the Court on 27 December 2000 and 29 January 2001 respectively, the Tribunal d'instance de Vienne (District Court, Vienne) referred to the Court for a preliminary ruling under Article 234 EC a question on the interpretation of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29, `the Directive').

2 That question was raised in proceedings between Cofidis SA, a company incorporated under French law, and Mr Fredout concerning the payment of sums due under a credit contract concluded between them.

Legal background

Community legislation

3 According to Article 1 of the Directive:

`1. The purpose of this Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to unfair terms in contracts concluded between a seller or supplier and a consumer.

2. The contractual terms which reflect mandatory statutory or regulatory provisions ... shall not be subject to the provisions of this Directive.'

4 Article 3(1) of the Directive provides:

`A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.'

5 Article 4 of the Directive defines how the unfair nature of a term is to be assessed. Article 4(2) provides:

`Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.'

6 Under Article 6(1) of the Directive:

`Member States shall lay down that unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided for under their national law, not be binding on the consumer and that the contract shall continue to bind the parties upon those terms if it is capable of continuing in existence without the unfair terms.'

7 Under Article 7(1) of the Directive:

`Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers.'

National legislation

8 The provisions on unfair terms are in Book I (`Information for consumers and formation of contracts'), Title III (`General conditions of contracts'), Chapter 2 (`Unfair terms'), of the Code de la consommation (Consumer Code).

9 Article L. 132-1 of that code, in the version of Law No 95-96 of 1 February 1995 concerning unfair terms and presentation of contracts, defines what is to be understood by `unfair terms' and states that they are to be `deemed not written'. According to the national court's judgment, that is equivalent to nullity, which, in accordance with the general rules on contracts, may be made the subject-matter of an action within five years and pleaded as a defence without time-limit.

10 Article L. 311-37 of the Code de la consommation, to which the national court's judgment refers, is in Book III (`Debt'), Title I (`Credit'), Chapter 1 (`Consumer credit'), of the code. That chapter lays down inter alia precise formal rules.

11 The first paragraph of Article L. 311-37 of the Code de la consommation provides:

`The Tribunal d'instance shall have jurisdiction to hear disputes arising from the application of this chapter. Actions brought before it must be raised within two years of the event which gave rise to them and are otherwise time-barred ...'.

The main proceedings and the question referred for a preliminary ruling

12 By a contract of 26 January 1998, Cofidis granted Mr Fredout the opening of a credit. When instalments remained unpaid, Cofidis brought an action against him on 24 August 2000 in the Tribunal d'instance de Vienne for payment of the sums due.

13 According to the national court's judgment, the offer of credit took the form of a leaflet printed on both sides, with the words `Free application for money reserve' in large letters on the front, while the references to the contractual interest rate and a penalty clause were in small print on the reverse. The Tribunal d'instance de Vienne therefore concluded that `the financial clauses ... lack legibility' and that `that lack of legibility is to be contrasted with the word "free" ... in a particularly obvious form', which was likely to mislead the consumer. Its conclusion was that `the financial clauses may be regarded as unfair'.

14 However, as the dispute was one concerning a consumer credit transaction, the Tribunal d'instance de Vienne considered that the limitation period of two years under Article L. 311-37 of the Code de la consommation applied and prevented it from annulling the terms it had found to be unfair.

15 In those circumstances, the Tribunal d'instance de Vienne decided to stay the proceedings and refer the following question to the Court for a preliminary ruling.

`Since the protection conferred by Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts implies that a national court, applying provisions of national law previous or subsequent to that directive, is to interpret them so far as possible in the light of the wording and purpose of the latter:

Does that requirement of an interpretation in conformity with the system of consumer protection under the directive require a national court, when hearing an action for payment brought by a seller or supplier against a consumer with whom he has contracted, to set aside a procedural rule on pleas in defence, such as that in Article L. 311-37 of the Code de la consommation, in so far as it prohibits the national court, either on the application of the consumer or of its own motion, from annulling any unfair term which vitiates the contract where the latter was made more than two years before the commencement of proceedings, and in so far as it thereby permits the seller or supplier to rely on those terms before a court and base its action on them?'

The question referred for a preliminary ruling

16 By its question the national court essentially asks whether the protection conferred on consumers by the Directive precludes a national provision which, in proceedings brought by a selle