The link between Directive 2005/29/EC and the information duties of intermediaries

A study on UK consumers, conducted by the Office of Fair Trading (OFT) and published in February 2011, found that consumers rarely read contracts in full before entering into them. Thus, they are usually unaware of some of the terms to which they are agreeing. Consumers can also make mistakes in interpreting terms and conditions that they are unaware of. Moreover, the study considers some other factors that are related to contracts: • Lengthy boilerplate clauses are often in fine print and written in technical and complicated legal language; • Access to the full terms may be difficult or impossible before acceptance. Often the document being signed is not the full contract; • There may be social pressure to sign. For instance, the salesperson may imply that the customer is being unreasonable if he/she reads the terms. If the purchaser is at the front of a queue there could be additional pressure to sign quickly. Sometimes suppliers give customers a gift (also a small one), which socially obliges the customer to be co-operative and to conclude the transaction. • Information asymmetry can be another disadvantage for consumers. Firms usually know the distribution of tastes across consumers and the prices they are willing to pay. At the same time, individual consumers are unaware of this distribution. In a market with such information asymmetry, a firm is able to maximize its profits by setting a high price for a product with a high rating considering that consumers, who have no information on what the right or fair price would be, will buy it in any case.