The Notion of Consumer and the Types of Contracts Covered

262. As mentioned earlier, Article 17 BRIbis designates the types of contracts that

may fall under the application of Section 4. En passant, this provision defines what a consumer is for the sake of the Regulation. Article 17 BRIbis reads as follows: “1. In matters relating to a contract concluded by a person, the consumer, for a purpose which can be regarded as being outside his trade or profession, jurisdiction shall be determined by this Section, without prejudice to Article 6 and point 5 of Article 7, if: (a) it is a contract for the sale of goods on instalment credit terms; (b) it is a contract for a loan repayable by instalments, or for any other form of credit, made to finance the sale of goods; or (c) in all other cases, the contract has been concluded with a person who pursues commercial or professional activities in the Member State of the consumer’s domicile or, by any means, directs such activities to that Member State or to several States including that Member State, and the contract falls within the scope of such activities. 2. Where a consumer enters into a contract with a party who is not domiciled in a Member State but has a branch, agency or other establishment in one of the Member States, that party shall,

in disputes arising out of the operations of the branch, agency or establishment, be deemed to be domiciled in that Member State. 3. This Section shall not apply to a contract of transport other than a contract which, for an inclusive price, provides for a combination of travel and accommodation”.

263. To start with, the concept of consumer was first defined by the ECJ592 and then crystalized in the text of the Convention, as amended in 1978. Accordingly, a consumer is a person who concludes a contract for a purpose that is not related to his trade or profession. In assessing whether a party is a consumer, national courts must take into account the position of this party in a particular contractual relationship. Hence, the subjective situation of a person is irrelevant.593 Furthermore, the Court of Justice had the occasion to clarify that the protective forum is available to a final consumer acting himself and who did not assign his rights to another party.594 Finally, although Article 17 does not explicitly mention it, it implies that the contractual partner of a consumer protected by Section 4 has to be a professional. In other words, Section 4 is not applicable to private parties, contracts between consumers and contracts between a private party and a consumer.595

264. Contrarily to Article 7(1) BRIbis, the application of Section 4 requires the

actual conclusion of a contract between a consumer and a professional. This has been clarified by the ECJ in a series of judgments regarding prize notification.596 Specifically in Illsinger, Schlank & Schick, a German company, sent a letter personally addressed to Ms. Illsinger, domiciled in Austria, according to which she was the winner of a prize. Following the instructions of the company, Ms. Illsinger tore off a coupon that she joined to a “prize claim certificate” and sent it back to Schlank & Schick with the objective to cash the prize in. Ms. Illsinger argues that she simultaneously placed a trial order, but this fact is contested by the company. In any case, it should be highlighted that the obtaining of the prize did not depend on an order of goods. Subsequently, Ms. Illsinger initiated proceedings in the Austrian courts against Schlank & Schick, seeking the payment of the prize. In this context, the referring court asked the ECJ whether this action was contractual

592 _{Case C-150/77 Bertrand v Paul Ott KG [1978] ECR 01431, para 21.}

593 _{Case C-269/95 Francesco Benincasa v Dentalkit Srl [1997] ECR I-03767, para 16.}

594 _{Case C-167/00 Verein für Konsumenteninformation v Karl Heinz Henkel [2002] ECR I-08111;} Shearson, supra n 589.

595 _{Magnus and Mankowski, supra n 570, 377; Kropholler and von Hein, supra n 495, 327.}

596 _{Rudolf Gabriel, supra n 574; Engler, supra n 532; Case C-180/06 Renate Ilsinger v Martin Dreschers}

in nature within the meaning of Article 17 BRIbis. In its answer, the Court of Justice declared that in order for Section 4 to apply, a contract must be concluded between the parties. This would be the case where the professional manifests an unconditional will to pay the prize to consumers who accept the offer. The ECJ added that the object of this offer must be sufficiently clear and precise, as to generate a link of a contractual nature. If such a contractual link cannot be established, Article 17 BRIbis could apply if the consumer makes an order of goods to the professional, following the prize notification. In this case, a claim for the payment of the prize would be non dissociable from the order and thus, enter the scope of this provision.597

265. There are three types of contracts contained in Article 17(1) BRIbis:

contracts for sale of goods on instalment credit terms (Article 17(1)(a)); contracts of loan or credit that aim at financing a purchase of goods (Article 17(1)(b)); and all other contracts that entertain a special connection with the consumer’s domicile (Article 17(1)(c)).

The sale of goods on instalment credit terms is a uniform concept that has been defined by the ECJ in Société Bertrand. Accordingly, this concept should be defined as “a transaction in which the price is discharged by way of several payments or which is linked to a financing contract”.598 Besides, in Hans-Herman Mietz, the Court clarified that Article 17(1)(a) BRIbis only applies when the seller transfers the possession of the goods to the buyer before the purchase price is fully paid.599 The object of Article 17(1)(b) BRIbis also encompasses sales of goods on instalment credit terms. However, it especially concerns funding operations, whose purpose is to finance sales of goods.

Article 17(1)(c) BRIbis covers all other contracts –except contracts of transport– concluded by a consumer with a professional, when the latter either pursues his activities in the Member State of the consumer’s domicile or directs such activities to this territory. While the first option requires the trader’s presence in the Member State where the consumer is domiciled, the second one suggests that the trader advertises and promotes his products or services without being physically present on this particular market. In this case, the Regulation requires the contract to be in relationship with the activities directed to the Member State of the consumer domicile.

597 _{Illsinger, supra n 596, paras 54-55, 59.} 598 _{Bertrand, supra n 592, para 20.}

266. In Rudolf Gabriel, the Court of Justice indicated that advertising techniques

may take place via press, radio, television, cinema or any other means. Additionally, more personal advertising measures are also covered by Article 17(1)(c) BRIbis like the sending of catalogues to the consumer or commercial offers made to him in person, in particular by an agent or door-to-door salesman.600 Since this judgment, the rise of internet generated additional interpretative issues concerning this provision. In particular, should one consider that the offer of products or services through a website, which is accessible from the consumer’s domicile, constitutes an activity that is directed to this territory? The ECJ answered this question negatively in the joined cases Pammer and Hotel Alpenhof. Indeed, it concluded that the mere accessibility of a website is not sufficient to fulfil the requirements of Article 17(1)(c) BRIbis.601 On this occasion, the Court also offered a useful non-exhaustive list of elements that may constitute evidence that the trader directed its activities to the Member State where the consumer is domiciled. These elements include: “the international nature of the activity, mention of itineraries from other Member States for going to the place where the trader is established, use of a language or a currency other than the language or currency generally used in the Member State in which the trader is established with the possibility of making and confirming the reservation in that other language, mention of telephone numbers with an international code, outlay of expenditure on an internet referencing service in order to facilitate access to the trader’s site or that of its intermediary by consumers domiciled in other Member States, use of a top-level domain name other than that of the Member State in which the trader is established, and mention of an international clientele composed of customers domiciled in various Member States”.602

Later on, the Court of Justice added some precisions to this case law: in Mühlleitner, it ruled that Article 17(1)(c) BRIbis does not require the contract to have been concluded at a distance. In the case at issue, Ms. Mühlleitner, an Austrian national, went to Germany in order to buy a car that she previously found on a website. When she returned in Austria, she discovered that the car was defective and sued the German seller in the courts of her domicile for damages and repayment of the purchase price. In this context, the ECJ pointed out that Article 17(1)(c) BRIbis was applicable to the action at

600 _{Rudolf Gabriel, supra n 574, para 44.}

601 _{Joined cases C-585/08 Peter Pammer v Reederei Karl Schlüter GmbH & Co. KG and C-144/09 Hotel} Alpenhof GesmbH v Oliver Heller [2010] ECR I-12527, paras 69-74.

stake, even though Ms. Mühlleitner personally went to another Member State in order to conclude the contract after having consulted the offer on a website.603 Besides, it is not necessary to establish causality between the means used to target consumers in a given Member State and the subsequent conclusion of a contract. Indeed, in Emrek, a French business run by Mr. Sabranovic directed its activities to Germany through its website. However, Mr. Emrek, domicilied in Germany, concluded a contract with this company after having learned about its existence from acquaintances. In this case, the ECJ concluded that the application of Article 17(1)(c) BRIbis does not require the establishment of a causal link between the prior consultation of a website and a contract, as it would run against its wording and undermine consumer protection.604