The Unfair Terms in Consumer Contracts Regulations, which implement this Directive in the UK, are to come into force on 1 July this year.

However, they, and the Directive, have already been the cause of some disquiet.At the root of the problem lies the unsatisfactory drafting of the Directive itself.

This is apparently due to the haste with which its last stages were rushed through the European legislative process, so that the outgoing presidency at the time could claim it as an achievement.The generally poor drafting of the Directive is reflected in the regulations (to some extent perhaps unavoidably).

Apart from that, there are three particular aspects which have been the subject of adverse comment in this country.

Before dealing with these, however, it would probably be helpful to explain the scope of the Directive and regulations.

These apply to any contract made between a person acting in the course of business and a person acting otherwise than in the course of business, ie a consumer.

They apply to any contract term which has not been individually negotiated, and of which the consumer has not been able to influence the substance.

Where a contract term is successfully challenged under the regulations it will be ineffective, but the remainder of the contract will stand if it is capable of doing so without the term concerned.There are a number of exclusions from the scope of the regulations: contracts relating to employment; succession rights; rights under family law; the incorporation and organisation of companies or partnerships; and any term incorporated in order to comply with, or which reflects, statutory or regulatory provisions of the UK or 'the provisions or principles of international conventions to which the member states or t he Community are party'.The first of the aspects which have given rise to particular concern is the regulations' reliance (reflecting the Directive) on the concept of 'unfairness'.

An 'unfair term' is any term which 'contrary to the requirement of good faith causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer'.

It may take a while to achieve a broad consensus on where the line between fair and unfair is to be drawn in English law.

However, sched 2 and 3 of the regulations give some help by setting out factors to be taken into account in assessing 'good faith' and also an indicative and illustrative (non-exhaustive) list of terms 'which may be regarded as unfair'.The more significant of these are probably: terms which 'inappropriately' exclude or limit the legal rights of the consumer as against the seller or supplier in the event of breach or non-performance of a contract; and those which make an agreement binding on a consumer without there being an obligation on the seller or supplier.The concepts of 'unfairness', and 'good faith' in relation to a contract may provide an interesting debating ground in academic circles.

However, it seems likely that English courts will not pay too much attention to fine distinctions, and will apply the well known standard of reasonableness in deciding what is fair and what is not.

If so, this aspect of the regulations may not cause too many problems.The second aspect of the Directive which has given rise to criticism is the government's failure to co-ordinate the regulations with the Unfair Contract Terms Act 1977.

It is well known that the Act's title is a misdescription since it does not deal with contract terms generally, only exclusion clauses, and regardless of whether they apply to liability in contract or in tort.

However, both the Act and the regulations apply to exclusions of liability, although they operate differently.In particular, the Act puts the burden of proof of reasonableness on the party seeking to rely on the exclusion term; whereas the regulations (though the Directive does not require this) put the burden of proving unfairness on the party seeking to challenge a contract term.The result is two separate and inconsistent regimes on closely related matters - a source of confusion both to sellers and suppliers (who were presumably the intended beneficiaries of the regulations' approach) and still more so to consumers.The third aspect of the Directive which has given rise to concern is whether it applies to contracts relating to land.

Here, the European legislative process has produced a most unfortunate muddle.The English text of the Directive says that it applies to sales and supplies of 'goods' and 'services'.

Land is clearly not 'goods'.

Whether a right of occupation such as is conferred by a lease or licence is a 'service' is a matter on which there appears to be a difference of opinion.

It seems possible that it is, at least for this purpose.The regulations, quite rightly, reflect the English text of the Directive in this respect.

However, the French text of the Directive clearly applies it to all types of land.

The French version applies to sales and supplies of 'biens' and 'services'.

'Biens' in French law - it is defined this way in the French Civil Code - means 'property' generally, both movable and immovable.The only body with the power to resolve this conflict seems to be the European Court of Justice, and we may therefore have to wait until a dispute on this point reaches it before we know for certain whether sales of land are subject to the Directive and the regulations - an unsatisfactory situation.

It seems, however, that the odds are in favour of the French text being the right one on this matter.It is understood, unofficially, that the working text during the development of the Directive was French.

Also, there are certain places in the Directive which could suggest that it was meant to apply to all types of contract other than those specifically excluded.As a matter of interest the German text reflects the English approach, not the French, but this is apparently of no great help as the European Court does not regard itself as bound by the majority in interpreting textual contradictions of this kind.However, the view has been expressed that though the uncertainty may be annoying, it is not, in practice, of very great matter whether the Directive applies to sales of land or not.

First, the only common type of contract between persons acting in the course of business and consumers, which relates to sales of land, are contracts between developers of residential property and buyers.

It is perhaps no great burden on developers that they should have to consider whether the terms of their sales contracts are fair.

Furthermore, as has already been mentioned, a contract containing an unfair term is to be invalid only to the extent of the term itself.

Nor, if leases are services, might it be a great hardship to impose on landlords that non-negotiated terms in their contracts are to be at risk if they are unfair.Nevertheless, there is no denying that this is an unhappy bit of legislation.