Private contracts between individuals are often overlooked in terms of actual rights, so 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 issued proceedings against the vendor and contended to the Giudice Concilliatore (Judge-Concillaitor) that arts.1(1), 2 and 5 conferred protective measures that allowed for rescindable notice within a period of seven days between consumers and private companies; which on this occasion was undertaken through written instruction to the contracting parties.
While the Directive had been in force for a number of years, the Italian government had failed to transpose it within the time allowed, therefore no domestic legislation existed concerning the facts of the case. As was common knowledge to Member States, a failure to adopt Directives in the prescribed period results in a loss of profit to the Member State when defending against direct effect claims by their citizens. In this instance however, the terms of the Directive, while both clear and precise, were 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.
This 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 terms of their agreement. For this reason, the court sought a preliminary ruling under art.177 and requested that the European Court of Justice clarify (i) if the terms of the Directive were clear and precise enough to provide direct effect, and (ii) whether despite a failure to adopt the measures in accordance with the Treaty, the claimant could rely upon them to enforce her individual right to cancel.
Having examined the arguments around horizontal effect between parties and the power of Directives, 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. That aside, it was still held that although the terms of the Directive were that of horizontal dealings, it was not possible for the claimant to rely upon them when seeking to terminate her agreement with the vendor.
However, because the Italian government had failed to adopt the Directive, and in light of the fact that there existed no domestic legislation to settle the matter, it was now possible for the national courts to transpose the effects of the Doorstep Selling Directive in order that a remedy could be provided in favour of the consumer, while conclusively holding 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.”