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The case involved a contractual dispute where the referenced Directive was merely incidental to proving the breach of contract and had nothing to do with enforcing an EC right. The conflict was over the relevance of different labeling requirements and which should be complied with. Directive 83/189 was involved, since Italy had introduced labeling requirements for geographical origin on olive oil. Under the Directive, Italy should have notified the Commission of its intention to regulate this labeling. The Commission intended to regulate itself Community-wide and so under the Directive Italy should not have introduced any such regulation. Central Food was supplied by Unilever without the labeling required under the Italian regulation and was refusing to pay because the labeling did not conform with Italian law. Unilever argued that Italian law could not apply, since it was effectively in breach of the Directive. The ECJ agreed, holding that this did not conflict with the restriction on horizontal direct effect in the case of Directives because the relevant Directive in this matter did not involve rights on which any of the parties might rely. In essence, the ECJ held that a substantial procedural defect in implementing a Directive could nullify domestic law in the context of a contract and give domestic courts the power to interpret any legal dispute arising in this context based solely on their own contract law.

Unilever (2000) illustrates one of three strategies employed by the European Court of Justice for approximating the results of horizontal direct effect without expressly applying the concept. In this instance, the court sanctioned the use of an unimplemented Directive in a legal dispute between private parties. In so doing, it implicitly allowed for horizontal direct effect, provided no particular obligation was placed on the defendant. This procedure is known as 'incidental' horizontal direct effect.

See also CIA Security v Signalson and Securitel (1996), direct effect.