Private contracts between individuals are often overlooked in terms of actual rights, therefore when an Italian consumer entered into an agreement to purchase an English language course while visiting a railway terminal, the vendor looked to enforce the contract when notified that her order was to be cancelled.
Relying upon Doorstep Selling Directive 85/577/EEC the applicant later issued proceedings against the vendor and contended to the Giudice Concilliatore (Judge-Concillaitor) that articles 1(1), 2 and 5 conferred protective measures allowing for rescindable notice within a period of seven days between consumers and private companies, which on this occasion had been undertaken through written instruction to the contracting vendor.
Although Directive 85/577/EEC had been in force for a number of years the Italian government had failed to transpose it within the allotted time, therefore no domestic legislation existed in support of this specific issue, while it was acknowledged that a failure to adopt Directives in the prescribed period resulted in a loss of profit to the Member State when defending against ‘direct effect‘ claims by their citizens.
However, in this instance the terms of the Directive were both clear and precise, yet related to dealings between individuals and so not subject to the benefit of protection unless transposed under the guidance of Community law and within the adoption window, which presented the national court with a dilemma inasmuch as they were unable to determine exactly what rights the claimant had when seeking cancellation of the contract, and if consideration was ultimately due to the vendor as per the agreement.
For this reason, the court sought a preliminary ruling from the European Court of Justice under article 177 EC, while asking:
1. Were the terms of the Directive clear and precise enough to provide direct effect?
2. Despite a failure to adopt the measures in accordance with the Treaty, could the claimant rely upon them to enforce her individual right to cancel?
Having examined the arguments around Directive powers and the horizontal effect between parties, it was agreed that for reasons of legal certainty future consideration must be given to broaden the scope of those entitlements when applying them to private and not public matters; yet, it was still held that although the terms of the Directive served horizontal dealings it was not possible for the claimant to rely upon them when seeking to terminate her agreement with the vendor.
However, the Court held that in light of the fact that the Italian government had failed to adopt the Directive and in the absence of relevant domestic legislation, it was now possible for the national courts to transpose the effects of Directive 85/577/EEC, in order that a remedy could be provided in favour of the consumer, while reminding the parties that:
“Where damage has been suffered and that damage is due to a breach by the State of its obligation, it is for the national court to uphold the right of aggrieved consumers to obtain reparation in accordance with national law on liability.”