5.1 Definition and Scope

This directive addresses unfair terms in contracts between sellers or suppliers and consumers (Art 1) where consumers are defined as a natural person acting for purposes which are outside his trade, business, or profession (Art 2). A contractual term is considered unfair if it has not been individually negotiated, and contrary to the requirement of good faith causes a significant imbalance to the detriment of the consumer. Any term that has been drafted in advance is to be considered not individually negotiated, and the fact that some terms have been individually negotiated does not preclude the other ones from being subject to this directive (Art 3). A non‐exhaustive list of examples of terms considered unfair is provided in the Annex.

The price level is not relevant for the assessment as to whether an agreement is unfair, unless the communication around that price level was unclear or misleading (Art 4). Where the definitions of terms are ambiguous they must be interpreted in the most favourable way for the consumer (Art 5). To the extent that this is possible, contracts containing unfair terms remain binding, with the unfair terms removed (Art 6).

Avoiding those regulations by choosing a non‐EU jurisdiction shall be prevented (Art 6), and consumer watchdogs and similar organisations can represent consumers in court, in particular in order to establish precedents (Art 7).