The Community Directive on consumer credit does not cover the termination of contracts of guarantee
Mr Siepert gave a guarantee to Berliner Kindl Brauerei AG («the Brewery»), to the value of DEM 90 000, for the repayment of loans granted by the Brewery to a third party for opening a restaurant. In so doing, Mr Siepert was not acting in the course of his trade or profession.
In June 1994, he had told «the Brewery» that he was going to withdraw his consent to act as guarantor. Since the principal debtor failed to meet his obligations, «the Brewery» called in the loans and obtained an order directing him to pay the sum of DEM 28 952.43 together with interest. In his capacity as guarantor, Mr Siepert was ordered to pay the same amount by judgment of 8 December 1997.
Mr Siepert applied to the Landgericht Potsdam to have that judgment set aside on the ground that he had terminated the contract in accordance with the German Law on consumer credit. That Law transposes into German law a Community directive on this type of credit. The German court decided to stay proceedings and to request a preliminary ruling from the Court of Justice as to whether the Community directive in question covers contracts of guarantee for the repayment of credit where neither the guarantor nor the borrower was acting in the course of his trade or profession.
The Court of Justice states that this form of contract is not covered by the Community Directive on consumer credit.
The wording, the content and the aims of the directive on consumer credit imply that contracts of guarantee do not fall within its scope, which is confined to credit agreements whereby «a creditor grants or promises to grant to a consumer a credit in the form of a deferred payment, a loan or other similar financial accommodation». The Directive is designed to ensure that the contracting parties - the borrower and the creditor, themselves - have full knowledge of the guarantees upon which conclusion of the agreement depends. In the absence of express provision, however, it cannot be inferred that the Directive also governs the legal situation created by the contract of guarantee. The directive was adopted with the dual aim of ensuring both the creation of a common consumer credit market and the protection of consumers who avail themselves of such credit. Accordingly, its objectives almost entirely concern the information to be given to the principal debtor regarding the implications of his commitment, and no special protection is provided for the guarantor.
The Community Directive on consumer credit is to be distinguished from the Community Directive for the protection of consumers in respect of contracts negotiated away from business premises, which was transposed into German law by the Law on the termination of contracts concluded in consequence of doorstep sales and similar transactions. That directive seeks to protect consumers by conferring upon them a general right to terminate a contract which has been entered into on the initiative of the trader, when the customer may not have been able to appreciate all the implications. It was specifically on the basis of that general aim that the Court held in an earlier case that a contract for the benefit of a third party -more specifically, a contract of guarantee concluded in consequence of a «doorstep sale» -cannot be excluded a priori from the scope of that directive.
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