Transcript Unfair terms directive

Unfair terms directive
Fryderyk Zoll
Unfair terms directive
Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts
THE COUNCIL OF THE EUROPEAN COMMUNITIES
HAS ADOPTED THIS DIRECTIVE:
Article 1
1. The purpose of this Directive is to approximate the laws, regulations and administrative provisions of
the Member States relating to unfair terms in contracts concluded between a seller or supplier and
a consumer.
2. The contractual terms which reflect mandatory statutory or regulatory provisions and the provisions
or principles of international conventions to which the Member States or the Community are party,
particularly in the transport area, shall not be subject to the provisions of this Directive.
Article 2
For the purposes of this Directive:
(a) 'unfair terms' means the contractual terms defined in Article 3;
(b) 'consumer' means any natural person who, in contracts covered by this Directive, is acting for
purposes which are outside his trade, business or profession;
(c) 'seller or supplier' means any natural or legal person who, in contracts covered by this Directive, is
acting for purposes relating to his trade, business or profession, whether publicly owned or
privately owned.
Unfair terms directive
Article 3
1. A contractual term which has not been individually negotiated shall be regarded as
unfair if, contrary to the requirement of good faith, it causes a significant
imbalance in the parties' rights and obligations arising under the contract, to the
detriment of the consumer.
2. A term shall always be regarded as not individually negotiated where it has been
drafted in advance and the consumer has therefore not been able to influence the
substance of the term, particularly in the context of a pre-formulated standard
contract.
The fact that certain aspects of a term or one specific term have been individually
negotiated shall not exclude the application of this Article to the rest of a contract
if an overall assessment of the contract indicates that it is nevertheless a preformulated standard contract.
Where any seller or supplier claims that a standard term has been individually
negotiated, the burden of proof in this respect shall be incumbent on him.
3. The Annex shall contain an indicative and non-exhaustive list of the terms which
may be regarded as unfair.
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Article 4
1. Without prejudice to Article 7, the unfairness of a
contractual term shall be assessed, taking into account the
nature of the goods or services for which the contract was
concluded and by referring, at the time of conclusion of the
contract, to all the circumstances attending the conclusion
of the contract and to all the other terms of the contract or
of another contract on which it is dependent.
2. Assessment of the unfair nature of the terms shall relate
neither to the definition of the main subject matter of the
contract nor to the adequacy of the price and
remuneration, on the one hand, as against the services or
goods supplies in exchange, on the other, in so far as these
terms are in plain intelligible language
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Article 5
In the case of contracts where all or certain terms
offered to the consumer are in writing, these
terms must always be drafted in plain, intelligible
language. Where there is doubt about the
meaning of a term, the interpretation most
favourable to the consumer shall prevail. This rule
on interpretation shall not apply in the context of
the procedures laid down in Article 7 (2).
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Article 6
1. Member States shall lay down that unfair terms used in a
contract concluded with a consumer by a seller or supplier
shall, as provided for under their national law, not be
binding on the consumer and that the contract shall
continue to bind the parties upon those terms if it is
capable of continuing in existence without the unfair terms.
2. Member States shall take the necessary measures to ensure
that the consumer does not lose the protection granted by
this Directive by virtue of the choice of the law of a nonMember country as the law applicable to the contract if the
latter has a close connection with the territory of the
Member States.
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Article 7
1. Member States shall ensure that, in the interests of consumers and of
competitors, adequate and effective means exist to prevent the continued
use of unfair terms in contracts concluded with consumers by sellers or
suppliers.
2. The means referred to in paragraph 1 shall include provisions whereby
persons or organizations, having a legitimate interest under national law in
protecting consumers, may take action according to the national law
concerned before the courts or before competent administrative bodies
for a decision as to whether contractual terms drawn up for general use
are unfair, so that they can apply appropriate and effective means to
prevent the continued use of such terms.
3. With due regard for national laws, the legal remedies referred to in
paragraph 2 may be directed separately or jointly against a number of
sellers or suppliers from the same economic sector or their associations
which use or recommend the use of the same general contractual terms
or similar terms.
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Article 8
Member States may adopt or retain the most
stringent provisions compatible with the
Treaty in the area covered by this Directive, to
ensure a maximum degree of protection for
the consumer.
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ANNEX
TERMS REFERRED TO IN ARTICLE 3 (3) 1. Terms which have the object or effect of:
(a) excluding or limiting the legal liability of a seller or supplier in the event of the death of a consumer or personal injury to the latter resulting from an act or omission of that seller or supplier;
(b) inappropriately excluding or limiting the legal rights of the consumer vis-à-vis the seller or supplier or another party in the event of total or partial non-performance or inadequate
performance by the seller or supplier of any of the contractual obligations, including the option of offsetting a debt owed to the seller or supplier against any claim which the consumer
may have against him;
(c) making an agreement binding on the consumer whereas provision of services by the seller or supplier is subject to a condition whose realization depends on his own will alone;
(d) permitting the seller or supplier to retain sums paid by the consumer where the latter decides not to conclude or perform the contract, without providing for the consumer to receive
compensation of an equivalent amount from the seller or supplier where the latter is the party cancelling the contract;
(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;
(f) authorizing the seller or supplier to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer, or permitting the seller or supplier to retain the sums
paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract;
(g) enabling the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so;
(h) automatically extending a contract of fixed duration where the consumer does not indicate otherwise, when the deadline fixed for the consumer to express this desire not to extend the
contract is unreasonably early;
(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;
(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;
(k) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided;
(l) providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer
the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded;
(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the
contract;
(n) limiting the seller's or supplier's obligation to respect commitments undertaken by his agents or making his commitments subject to compliance with a particular formality;
(o) obliging the consumer to fulfil all his obligations where the seller or supplier does not perform his;
(p) giving the seller or supplier the possibility of transferring his rights and obligations under the contract, where this may serve to reduce the guarantees for the consumer, without the latter's
agreement;
(q) excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not
covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to
the contract.
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OCÉANO GRUPO EDITORIAL AND SALVAT
EDITORES
JUDGMENT OF THE COURT
27 June 2000 *
In Joined Cases C-240/98 to C-244/98
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Judgment
1 By orders of 31 March 1998 (C-240/98 and C-241/98) and 1 April 1998
(C-242/98, C-243/98 and C244/98) received at the Court on 8 July 1998, the
Juzgado de Primera Instancia (Court of First Instance) No 35, Barcelona,
referred
to the Court for a preliminary ruling under Article 177 of the EC Treaty (now
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Article 234 EC) a question on the interpretation of Council Directive
93/13/EEC
of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29,
'the
Directive').
2
Unfair terms directive
The question was raised in two sets of proceedings,
between (i) Océano Grupo
Editorial SA and Ms Murciana Quintero and (ii) Salvat
Editores SA and Mr
Sánchez Alcón Pradės, Mr Copano Badillo, Mr Berroane
and Mr Viñas Feliú. The
proceedings concerned the payment of sums due under
contracts concluded
between the companies and the defendants in the main
proceedings for the sale on
deferred payment terms of encyclopaedias.
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Under Spanish law consumers were initially
protected against unfair terms
inserted in contracts by sellers and suppliers by the
Ley General 26/1984, de 19 de
julio, para la Defensa de los Consumidores y
Usuarios (General Law No 26/1984
of 19 July 1984 for the Protection of Consumers and
Users, Boletín Oficial del
Estado No 176, of 24 July 1984, 'Law No 26/1984').
Unfair terms directive
Article 10(1)(c) of Law No 26/1984 provides that terms, conditions or clauses
which apply generally in relation to the sale or promotion of products or
services
must be consistent with the requirement of good faith and must maintain a
proper balance between the rights and obligations of the parties, which in
any
event precludes the use of unfair terms. By virtue of Article 10(4) of Law
No 26/1984, unfair terms, which are defined as terms adversely affecting the
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consumer in a disproportionate or inequitable manner or causing an
imbalance in
the parties' rights and obligations to the detriment of the consumer, are
automatically void.
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The Directive was fully transposed by Ley 7/1998, de 13 de abril, sobre
Condiciones Generales de la Contratación (Law No 7/1998 of 13 April
1998 on
General Contractual Conditions, Boletín Oficial del Estado No 89 of 14
April
1998, 'Law No 7/1998').
13 Article 8 of Law No 7/1998 provides that general conditions which,
to the
detriment of a party to the contract, infringe the provisions of the Law
and, in
particular, unfair general conditions in consumer contracts within the
meaning of
Law No 26/1984 are automatically void.
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Law No 7/1998 supplements Law No 26/1984 by adding, in particular,
Article 10a, paragraph 1 of which substantially reproduces Article 3(1)
of the
Directive, and an additional provision which essentially sets out the list
in the
Annex to the Directive of terms which may be regarded as unfair, while
indicating
that the provision is minimal in character. Under paragraph 27 of the
additional
provision, a term of a contract expressly conferring jurisdiction on a
court or
tribunal other than that corresponding to the consumer's domicile or
the place of
performance of the contract is regarded as unfair.
Unfair terms directive
The main proceedings and the question submitted for a preliminary ruling
15 Between 4 May 1995 and 16 October 1996, each of the defendants in the main
proceedings, all of whom are resident in Spain, entered into a contract for the
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purchase by instalments of an encyclopaedia for personal use. The plaintiffs in the
main proceedings are the sellers of the encyclopaedias.
16 The contracts contained a term conferring jurisdiction on the courts in Barcelona
(Spain), a city in which none of the defendants in the main proceedings is
domiciled but where the plaintiffs in those proceedings have their principal place
of business.
17 The purchasers of the encyclopaedias did not pay the sums due on the agreed
dates, and, between 25 July and 19 December 1997, the sellers brought actions
('juicio de cognición' — a summary procedure available only for actions
involving limited amounts of money) in the Juzgado de Primera Instancia
No 35 de Barcelona to obtain an order that the defendants in the main
proceedings should pay the sums due.
18 Notice of the claims was not served on the defendants since the national court
had doubts as to whether it had jurisdiction over the actions in question. The
national court points out that on several occasions the Tribunal Supremo
(Supreme Court) has held jurisdiction clauses of the kind at issue in these
proceedings to be unfair. However, according to the court making the reference,
the decisions of the national courts are inconsistent on the question of whether
the court may, in proceedings concerning consumer protection, determine of its
own motion whether an unfair term is void.
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In those circumstances the Juzgado de Primera Instancia No 35 de Barcelona
took the view that an interpretation of the Directive was necessary to enable it to
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reach a decision in the proceedings before it. It decided to stay the proceedings
and to refer to the Court of Justice for a preliminary ruling the following
question, which is identically worded in the five orders for reference:
'Is the scope of the consumer protection provided by Council Directive 93/13/
EEC of 5 April 1993 on unfair terms in consumer contracts such that the national
court may determine of its own motion whether a term of a contract is unfair
when making its preliminary assessment as to whether a claim should be allowed
to proceed before the ordinary courts?'
Unfair terms directive
1. The protection provided for consumers by Council Directive 93/13/EEC of
5 April 1993 on unfair terms in consumer contracts entails the national court
being able to determine of its own motion whether a term of a contract
before it is unfair when making its preliminary assessment as to whether a
claim should be allowed to proceed before the national courts.
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2. The national court is obliged, when it applies national law provisions
predating or postdating the said Directive, to interpret those provisions, so
far as possible, in the light of the wording and purpose of the Directive. The
requirement for an interpretation in conformity with the Directive requires
the national court, in particular, to favour the interpretation that would
allow it to decline of its own motion the jurisdiction conferred on it by virtue
of an unfair term.
Unfair terms directive
JUDGMENT OF THE COURT (Fifth Chamber)
1 April 2004 *
In Case C-237/02,
REFERENCE to the Court under Article 234 EC by the
Bundesgerichtshof
(Germany) for a preliminary ruling in the proceedings pending
before that court
between
Freiburger Kommunalbauten GmbH Baugesellschaft & Co. KG
and
Ludger Hofstetter,
Ulrike Hofstetter,
Unfair terms directive
By order of 2 May 2002, received at the Court on 27
June 2002, the
Bundesgerichtshof (Federal Court of Justice)
referred a question for a preliminary
ruling under Article 234 EC on the interpretation of
Article 3(1) of Council
Directive 93/13/EEC of 5 April 1993 on unfair terms
in consumer contracts
(OJ 1993 L 95, p. 29) (hereinafter 'the Directive').
Unfair terms directive
That question was raised in proceedings
between Freiburger Kommunalbauten
GmbH Baugesellschaft & Co. KG (hereinafter
'Freiburger Kommunalbauten'),
claimant in the main proceedings, and Mr and
Mrs Hofstetter, defendants in the
main proceedings, relating to liability for default
interest on the price payable for
the building and purchase of a parking space.
Unfair terms directive
At the time relevant to the facts in the main proceedings, the protection of
consumers against the unfair terms referred to in the Directive was governed
under German law by the Gesetz zur Regelung des Rechts der Allgemeinen
Geschäftsbedingungen (Law on standard business terms, hereinafter 'the
AGBG')
of 9 December 1976 (BGBl. 1976,1, p. 3317). Paragraph 9 of that Law stated:
' 1 . Provisions in standard business terms are invalid if, contrary to the
requirement of good faith, they place the contractual partner of the user at
an
unreasonable disadvantage.
I
Unfair terms directive
The main proceedings
9 By notarial contract of 5 May 1998, Freiburger
Kommunalbauten, a municipal
construction company acting in the course of its
business, sold to Mr and Mrs
Hofstetter, who were dealing as consumers, a
parking space located in a multistorey
car park that Freiburger Kommunalbauten was
to build.
Unfair terms directive
Under clause 5 of the contract, the whole of the price was due upon
delivery of a
security by the contractor. In the event of late payment, the purchaser
was liable
to pay default interest.
1 1 The security took the form of a bank guarantee and was delivered
to Mr and Mrs
Hofstetter on 20 May 1999. The guarantor undertook, as a primary
liability, to
guarantee any claims Mr and Mrs Hofstetter might assert against
Freiburger
Kommunalbauten for repayment of the purchase price paid it or of
which it was
entitled to dispose.
Unfair terms directive
Mr and Mrs Hofstetter refused to make the payment. They claimed that the
provision requiring payment of the whole of the price was contrary to Paragraph
9 of the AGBG. They paid the price only after they had accepted the parking
space, free of defects, on 21 December 1999.
1 3 Freiburger Kommunalbauten claimed default interest for late payment. The
Landgericht Freiburg (Freiburg Regional Court) (Germany) upheld the claim. On
appeal, the Oberlandesgericht Karlsruhe (Karlsruhe Higher Regional Court)
(Germany) dismissed the claim. Freiburger Kommunalbauten then appealed on a
point of law to the Bundesgerichtshof.
1 4 The Bundesgerichtshof held that the disputed contract fell within the scope of the
Directive as set out in Article 3(2). It is inclined to the view that clause 5 of the
disputed contract is not an unfair term under German law. However, it considers
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that having regard to the wide variety of rules applying in the Member States this
assessment is not free from doubt. The Bundesgerichtshof therefore decided to
stay the proceedings and to refer the following question to the Court for a
preliminary ruling:
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'Is a term, contained in a seller's standard business conditions, which provides
that the purchaser of a building which is to be constructed is to pay the total
price
for that building, irrespective of whether there has been any progress in the
construction, provided that the seller has previously provided him with a
guarantee from a credit institution securing any monetary claims the
purchaser
may have in respect of defective performance or non-performance of the
contract,
to be regarded as unfair within the meaning of Article 3(1) of Council
Directive
93/13/EEC of 5 April 1993 on unfair terms in consumer contracts?'
The question
Unfair terms directive
THE COURT (Fifth Chamber),
in answer to the question referred to it by the
Bundesgerichtshof by order of
2 May 2002, hereby rules:
It is for the national court to decide whether a
contractual term such as that at
issue in the main proceedings satisfies the requirements
for it to be regarded as
unfair under Article 3(1) of Council Directive 93/13/EEC of
5 April 1993 on
unfair terms in consumer contracts.
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JUDGMENT OF THE COURT (Fourth Chamber)
4 June 2009 (*)
(Directive 93/13/EEC – Unfair terms in consumer contracts – Legal
effects of an unfair term – Power of and obligation on the national
court to examine of its own motion the unfairness of a term
conferring jurisdiction – Criteria for assessment)
In Case C-243/08,
REFERENCE for a preliminary ruling under Article 234 EC from the
Budaörsi Városi Bíróság (Hungary), made by decision of 22 May
2008, received at the Court on 2 June 2008, in the proceedings
Pannon GSM Zrt.
v
Erzsébet Sustikné Győrfi,
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• Judgment
• 1
This reference for a preliminary ruling
concerns the interpretation of Council Directive
93/13/EEC of 5 April 1993 on unfair terms in
consumer contracts (OJ 1993 L 95, p. 29; ‘the
Directive’).
• 2
The reference has been made in the course
of proceedings between Pannon GSM Zrt.
(‘Pannon’) and Mrs Sustikné Győrfi relating to the
performance of a telephone subscription contract
concluded between those parties.
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National legislation
9
At the time of the facts at issue in the main proceedings, the Civil Code, in the version resulting
from Law No CXLIX of 1997 (Magyar Közlöny 1997/115, ‘the Civil Code’), and Government Decree
No 18/1999 on terms to be considered unfair in consumer contracts (Magyar Közlöny 1998/8), in
the version in force at the time of the dispute in the main proceedings, were applicable.
10
In accordance with Article 209(1) of the Civil Code, a party can challenge any general contractual
term which it considers to be unfair. Under Article 209B(4) of that code, specific provisions set out
terms which are regarded as unfair in consumer contracts. Under Article 235(1) of the Civil Code,
where a challenge to a term is upheld, the contract in question loses its legal force from the date on
which it was concluded. According to Article 236(1) of the Civil Code, a challenge to a term of the
contract must be communicated in writing to the other party within a period of one year.
11
Government Decree No 18/1999, in the version in force at the time of the dispute in the main
proceedings, classes the contractual terms in two categories. The first category contains those
contractual terms the use of which is prohibited in consumer contracts, and which are,
consequently, null and void. The second category contains terms presumed to be unfair until
evidence to the contrary is presented, the party which drafted that term being entitled to rebut
that presumption.
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The dispute in the main proceedings and the questions referred for a preliminary ruling
12 On 12 December 2004, Mrs Sustikné Győrfi entered into a subscription contract with Pannon for the provision of
mobile telephone services. The contract was concluded on the basis of a form supplied by Pannon which
stipulated that, by signing the contract, Mrs Sustikné Győrfi acknowledged the applicable terms and conditions,
including the general contractual conditions forming an integral part of the contract, and accepted their content.
13 Under those terms and conditions, the two parties to the main proceedings accepted that the court for the place
where Pannon has its principal place of business has jurisdiction for any dispute arising from the subscription
contract or in relation to it. That term conferring jurisdiction was not individually negotiated by the two parties.
14 Taking the view that Mrs Sustikné Győrfi had not complied with her contractual obligations, Pannon applied,
pursuant to that term, to the Budaörsi Városi Bíróság (Budaörs District Court) for an order for payment, it being
the court in the territorial jurisdiction of which Pannon has its principal place of business.
15 That court made the order sought by Pannon. Mrs Sustikné Győrfi then filed, within the prescribed time-limit, a
statement of opposition to that order, and the proceedings thereby became contentious.
16 That court noted that Mrs Sustikné Győrfi’s place of residence was not within its jurisdiction. It held that Mrs
Sustikné Győrfi, who receives invalidity benefit, has her place of residence in Dombegyház, in the judicial district
of Békés, 275 km from Budaörs, and indicated that means of transport between Budaörs and Dombegyház are
very limited on account of the lack of a direct train or bus service.
17 The Budaörsi Városi Bíróság observed that the applicable rules of procedure provide that the court with territorial
jurisdiction is the court for the place where Mrs Sustikné Győrfi resides, that is to say, the Battonyai Városi Bíróság
(Battonya District Court).
18 The referring court explained that the Code of Civil Procedure provides that the court, in the district in question,
must raise, of its own motion, the issue of territorial jurisdiction. However, as the jurisdiction is not exclusive, it is
no longer possible to raise that issue after the first filing by the defendant of her defence to the substance of the
dispute. The court which is seised may examine the accuracy of the facts relied on, to establish that it has
jurisdiction, only where they are inconsistent with self-evident facts or facts of which the court has knowledge ex
officio, or if such facts are impossible to prove or the other party disputes them.
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In those circumstances, the Budaörsi Városi Bíróság, entertaining doubts as to the possible unfairness
of the term conferring jurisdiction in the general conditions of the contract at issue, decided to stay
proceedings and refer the following questions to the Court for a preliminary ruling:
‘1. Can Article 6(1) of … Directive [93/13] – pursuant to which Member States are to provide that
unfair terms used in a contract concluded with a consumer by a seller or supplier shall, as provided
for under their national law, not be binding on the consumer – be construed as meaning that the
non-binding nature vis-à-vis the consumer of an unfair term introduced by the seller or supplier
does not have effect ipso jure but only where the consumer successfully contests the unfair term by
lodging the relevant application?
2. Does the consumer protection provided by Directive [93/13] require the national court of its own
motion – irrespective of the type of proceedings in question and of whether or not they are
contentious – to determine that the contract before it contains unfair terms, even where no
application has been lodged, thereby carrying out, of its own motion, a review of the terms
introduced by the seller or supplier in the context of exercising control over its own jurisdiction?
3. In the event that the second question is answered in the affirmative, what are the factors which
the national court must take into account and evaluate in the context of exercising this control?’
Unfair terms directive
The questions referred
The first question
20 By this question, the referring court wishes to know whether Article 6(1) of the Directive, pursuant to which unfair terms used in a contract concluded
with a consumer by a seller or supplier are not binding on the consumer, must be interpreted as meaning that it is only where the consumer has
successfully challenged such a term that he is not bound by it.
21 In order to reply to the question referred, it should be recalled, at the outset, that the obligation imposed on the Member States under Article 6(1) of
the Directive is intended to accord a right to the citizen, in his role as a consumer, and defines the result sought by the Directive (see Case C-144/99
Commission v Netherlands [2001] ECR I-3541, paragraph 18, and Case C-478/99 Commission v Sweden [2002] ECR I-4147, paragraphs 16 and 18).
22 Thus, the system of protection introduced by the Directive is based on the idea that the consumer is in a weak position vis-à-vis the seller or supplier,
as regards both his bargaining power and his level of knowledge. This leads to the consumer agreeing to terms drawn up in advance by the seller or
supplier without being able to influence the content of those terms (Joined Cases C-240/98 to C-244/98 Océano Grupo Editorial and Salvat Editores
[2000] ECR I-4941, paragraph 25).
23 The Court also held, in paragraph 26 of that judgment, that the aim of Article 6 of the Directive would not be achieved if the consumer were himself
obliged to raise the unfairness of contractual terms, and that effective protection of the consumer may be attained only if the national court
acknowledges that it has power to evaluate terms of this kind of its own motion.
24 It must be pointed out, in that regard, that, if that power is to be granted to the national court, Article 6(1) of the Directive cannot be interpreted as
meaning that it is only in the event that the consumer has brought a specific application in relation to it, that an unfair contract term is not binding on
that consumer. Such an interpretation would rule out the possibility of the national court assessing, of its own motion, in the context of examining
the admissibility of the action which is before it, and without a specific application from the consumer to that effect, the unfairness of a contractual
term.
25 As regards the legal effects of an unfair term, the Court stated, in Case C-168/05 Mostaza Claro [2006] ECR I-10421, paragraph 36, that the
importance of consumer protection has led the Community legislature to lay down, in Article 6(1) of the Directive, that unfair terms used in a
contract concluded with a consumer by a seller or supplier ‘shall … not be binding on the consumer’. It emphasised that it is a mandatory provision
which, taking into account the weaker position of one of the parties to the contract, aims to replace the formal balance which the latter establishes
between the rights and obligations of the parties with an effective balance which re-establishes equality between them.
26 The Court added further, in paragraph 37 of that judgment, that as the aim of the Directive is to strengthen consumer protection, it constitutes,
according to Article 3(1)(t) EC, a measure which is essential to the accomplishment of the tasks entrusted to the European Community and, in
particular, to raising the standard of living and the quality of life in its territory.
27 Consequently, the expression ‘as provided for under their national law’, set out in Article 6(1) of the Directive, cannot be understood as enabling
Member States to subject the non-binding status of an unfair term to a condition such as that mentioned in the first question referred.
28 Therefore, the reply to the first question is that Article 6(1) of the Directive must be interpreted as meaning that an unfair contract term is not binding
on the consumer, and it is not necessary, in that regard, for that consumer to have successfully contested the validity of such a term beforehand.
Unfair terms directive
The second question
29 By this question, the referring court asks the Court about the obligations on the national court, by reason of the provisions of the directive, in order to
determine whether the national court, in the context of assessing its jurisdiction and irrespective of the type of action, must rule, if necessary of its
own motion, on the unfairness of a contractual term.
30
In order to reply to that question, it should be recalled that, in Case C-473/00 Cofidis [2002] ECR-10875, paragraph 34, the Court has held that the
protection which the Directive confers on consumers extends to cases in which a consumer who has concluded with a seller or supplier a contract
containing an unfair term fails to raise the unfairness of the term, whether because he is unaware of his rights or because he is deterred from
enforcing them on account of the costs which judicial proceedings would involve.
31
It should also be pointed out that the Court has held, in Mostaza Claro, paragraph 38, that the nature and importance of the public interest
underlying the protection which the Directive confers on consumers justify the national court being required to assess of its own motion whether a
contractual term is unfair, compensating in this way for the imbalance which exists between the consumer and the seller or supplier.
32
The court seised of the action is therefore required to ensure the effectiveness of the protection intended to be given by the provisions of the
Directive. Consequently, the role thus attributed to the national court by Community law in this area is not limited to a mere power to rule on the
possible unfairness of a contractual term, but also consists of the obligation to examine that issue of its own motion, where it has available to it the
legal and factual elements necessary for that task, including when it is assessing whether it has territorial jurisdiction.
33
In carrying out that obligation, the national court is not, however, required under the Directive to exclude the possibility that the term in question
may be applicable, if the consumer, after having been informed of it by that court, does not intend to assert its unfair or non-binding status.
34
In those circumstances, the specific characteristics of the procedure for determining jurisdiction, which takes place under national law between the
seller or supplier and the consumer, cannot constitute a factor which is liable to affect the legal protection from which the consumer must benefit
under the provisions of the Directive.
35
The reply, therefore, to the second question is that the national court is required to examine, of its own motion, the unfairness of a contractual term
where it has available to it the legal and factual elements necessary for that task. Where it considers such a term to be unfair, it must not apply it,
except if the consumer opposes that non-application. That duty is also incumbent on the national court when it is ascertaining its own territorial
jurisdiction.
Unfair terms directive
The third question
36 By this question, the national court seeks guidance on the factors which it must consider in assessing the possible unfairness of a contractual term.
37
In order to reply to that question, it should be noted that in referring to concepts of good faith and significant imbalance between the rights and
obligations of the parties, Article 3 of the Directive merely defines in a general way the factors that render unfair a contractual term that has not
been individually negotiated (Case C-237/02 Freiburger Kommunalbauten [2004] ECR I-3403, paragraph 19).
38
In that context, the Annex to which Article 3(3) of the Directive refers contains only an indicative and non-exhaustive list of terms which may be
regarded as unfair (Freiburger Kommunalbauten, paragraph 20).
39 Furthermore, Article 4 of the Directive provides that the unfairness of a contractual term is to be assessed taking into account the nature of the goods
or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the
conclusion of it.
40
However, as regards the term which is the subject-matter of the dispute in the main proceedings, it should be borne in mind that, in Océano Grupo
Editorial and Salvat Editores, paragraphs 21 to 24, the Court has held that, in a contract concluded between a consumer and a seller or supplier
within the meaning of the Directive, a term, drafted in advance by the seller or supplier – which was not subject to individual negotiation – the
purpose of which is to confer jurisdiction in respect of all disputes arising under the contract on the court in the territorial jurisdiction of which the
seller has his principal place of business, satisfies all the criteria necessary for it to be judged unfair for the purposes of the Directive.
41
As the Court stated in Océano Grupo Editorial and Salvat Editores, paragraph 22, a term of this kind obliges the consumer to submit to the exclusive
jurisdiction of a court which may be a long way from his domicile. This may make it difficult for him to enter an appearance. In the case of disputes
concerning limited amounts of money, the costs relating to the consumer’s entering an appearance could be a deterrent and cause him to forgo any
legal remedy or defence. The Court therefore concluded that such a term falls within the category of terms which have the object or effect of
excluding or hindering the consumer’s right to take legal action, a category referred to in subparagraph (q) of paragraph 1 of the Annex to the
Directive.
42 While it is true that the Court, in exercising the jurisdiction conferred on it by Article 234 EC, in Océano Grupo Editorial and Salvat Editores, paragraph
22, interpreted the general criteria used by the Community legislature in order to define the concept of unfair terms, it cannot however rule on the
application of those general criteria to a particular term, which must be considered in the light of the particular circumstances of the case in question
(see Freiburger Kommunalbauten, paragraph 22).
43
It is for the national court, in the light of the foregoing, to assess whether a contractual term may be categorised as unfair within the meaning of
Article 3(1) of the Directive.
44
In those circumstances, the reply to the third question is that it is for the national court to determine whether a contractual term, such as that which
is the subject-matter of the dispute in the main proceedings, satisfies the criteria to be categorised as unfair within the meaning of Article 3(1) of the
Directive. In so doing, the national court must take account of the fact that a term, contained in a contract concluded between a consumer and a
seller or supplier, which has been included without being individually negotiated and which confers exclusive jurisdiction on the court in the
territorial jurisdiction of which the seller or supplier has his principal place of business may be considered to be unfair.
Unfair terms directive
On those grounds, the Court (Fourth Chamber) hereby rules:
1.
Article 6(1) of Council Directive 93/13/EEC of 5 April 1993, on unfair terms in consumer
contracts, must be interpreted as meaning that an unfair contract term is not binding on the
consumer, and it is not necessary, in that regard, for that consumer to have successfully contested
the validity of such a term beforehand.
2.
The national court is required to examine, of its own motion, the unfairness of a contractual
term where it has available to it the legal and factual elements necessary for that task. Where it
considers such a term to be unfair, it must not apply it, except if the consumer opposes that nonapplication. That duty is also incumbent on the national court when it is ascertaining its own
territorial jurisdiction.
3.
It is for the national court to determine whether a contractual term, such as that which is the
subject-matter of the dispute in the main proceedings, satisfies the criteria to be categorised as
unfair within the meaning of Article 3(1) of Directive 93/13. In so doing, the national court must
take account of the fact that a term, contained in a contract concluded between a consumer and
a seller or supplier, which has been included without being individually negotiated and which
confers exclusive jurisdiction on the court in the territorial jurisdiction of which the seller or
supplier has his principal place of business may be considered to be unfair.
Unfair terms directive
JUDGMENT OF THE COURT (First Chamber)
14 June 2012 (*)
(Directive 93/13/EEC — Consumer contracts — Unfair term concerning
interest on late payments — Order for payment procedure —
Powers of the national court)
In Case C-618/10,
REFERENCE for a preliminary ruling under Article 267 TFEU from the
Audiencia Provincial de Barcelona (Spain), made by decision of
29 November 2010, received at the Court on 29 December 2010, in
the proceedings
Banco Español de Crédito SA
v
Joaquín Calderón Camino,
Unfair terms directive
•
•
•
•
•
•
•
•
•
Spanish law
19
Under Spanish law, consumers were initially protected against unfair terms by General Law 26/1984 for the
protection of consumers and users (Ley General 26/1984 para la Defensa de los Consumidores y Usuarios) of
19 July 1984 (BOE No 176 of 24 July 1984, p. 21686; ‘Law 26/1984’).
20
Law 26/1984 was subsequently amended by Law 7/1998 on general contractual conditions (Ley 7/1998
sobre Condiciones Generales de la Contratación) of 13 April 1998 (BOE No 89 of 14 April 1998, p. 12304), which
transposed Directive 93/13 into Spanish national law.
21
Lastly, Royal Legislative Decree 1/2007 approving the consolidated version of the General Law for the
protection of consumers and users and other supplementary laws (Real Decreto Legislativo 1/2007 por el que se
aprueba el texto refundido de la Ley General para la Defensa de los Consumidores y Usuarios y otras leyes
complementarias), of 16 November 2007 (BOE No 287 of 30 November 2007, p. 49181; ‘Legislative Decree
1/2007’), adopted the consolidated version of Law 26/1984, as amended.
22 Under Article 83 of Legislative Decree 1/2007:
‘1. Unfair contract terms shall be automatically void and deemed not to have formed part of the contract.
2.
The part of the contract which has been deemed void shall be modified in accordance with the provisions of
Article 1258 of the Civil Code and with the principle of good faith.
To that end, the court which rules that such terms are void shall modify the contract and shall enjoy moderating
powers regarding the rights and obligations of the parties, where the contract continues in existence, and
regarding the consequences of its being ruled ineffective in the event of significant loss or damage to the
consumer or user.
Only where the remaining contract terms result in an imbalance in the respective positions of the parties which
cannot be remedied may the court rule that the contract is ineffective.’
Unfair terms directive
Article 1258 of the Spanish Civil Code provides:
‘Contracts are concluded by simple consent and from that point are binding, not only as to the
performance of the matters expressly agreed, but also as to all consequences which, by their
nature, are in accordance with good faith, custom and the law.’
24
As regards the order for payment procedure, the Code of Civil Procedure (Ley de Enjuiciamiento
Civil), as applicable at the date on which the procedure which gave rise to the main proceedings
was initiated, sets out, in Article 812(1) thereof, the conditions for the application of that procedure
in the following terms:
‘Any person claiming from another the payment of an outstanding and payable pecuniary debt which
does not exceed EUR 30 000 may use the order for payment procedure, where the amount of that
debt is demonstrated by the following procedure:
(1)
either by the submission of documents, whatever their form, type or physical medium, signed by
the debtor or bearing his or her stamp, mark or trade mark or any other sign, physical or electronic,
originating from the debtor;
(2)
or by the submission of invoices, delivery notes, certificates, telegrams, facsimiles or any other
documents which, even if created unilaterally by the creditor, are normally used to document
credits and debts in relationships of such a type as that existing between the creditor and the
debtor.
Unfair terms directive
Article 815(1) of the Code of Civil Procedure, entitled ‘Admissibility of the
application and order for payment’, provides:
‘Where the documents attached to the application are included in those set
out in Article 812(2) or constitute prima facie evidence of the right of the
applicant, confirmed by the contents of the application, the Registrar shall
order the debtor to pay the applicant within a period of 20 days and to
provide evidence of that payment to the court or tribunal, or to appear
before it and to state briefly, in the objection, the reasons for which he or
she considers that he or she is not liable for all or part of the amount
claimed…’.
26 Article 818(1) of the Code of Civil Procedure, relating to the debtor’s
objection, provides:
‘Where the debtor lodges an objection in due time, a definitive decision shall
be made on the dispute after the appropriate procedure has been
followed, whereupon the judgment shall acquire the force of res judicata.’
Unfair terms directive
The dispute in the main proceedings and the questions referred for a preliminary ruling
27 On 28 May 2007, Mr Calderón Camino entered into a loan agreement for the sum of EUR 30 000 with Banesto (‘the disputed agreement’) in order to
purchase a vehicle which was to ‘meet the needs of the household’. The nominal interest rate was 7.950%, the APR (Annual Percentage Rate of
Charge) 8.890% and the rate of interest on late payments 29%.
28 Although the term of the disputed agreement was fixed at 5 June 2014, Banesto took the view that it had expired before that date on the ground
that, in September 2008, reimbursement of 7 monthly repayments had not yet been made. Thus, on 8 January 2009, it submitted, before the
Juzgado de Primera Instancia No 2 de Sabadell (Court of First Instance, No 2, Sabadell), in accordance with Spanish law, an application for an order
for payment in the amount of EUR 29 381.95, corresponding to the unpaid monthly repayments plus contractual interest and costs.
29 On 21 January 2010, the Juzgado de Primera Instancia No 2 de Sabadell issued an order in which it held, first, that the disputed agreement was a preformulated standard contract, concluded without any real opportunities for negotiation and including imposed general conditions and, secondly, that
the 29% rate of interest for late payment was fixed in a typed term which could not be distinguished from the rest of the text as regards the font, the
size of the letters used or any specific acceptance by the consumer.
30 In those conditions and, having regard to, inter alia, the Euribor (‘Euro interbank offered rate’) and European Central Bank (ECB) rates of interest, and
to the fact that the rate of interest for late payment in the agreement was more than 20 points greater than that of the nominal interest rate, the
Juzgado de Primera Instancia No 2 de Sabadell held of its own motion that the term relating to interest for late payment was automatically void, on
the ground that it was unfair, referring to the settled case-law of the Court of Justice on this matter. It also fixed that rate at 19%, referring to the
statutory rate of interest and to the rates of interest for late payment included in national budget laws from 1990 to 2008, and ordered Banesto to
recalculate the amount of interest for the period at issue in the dispute before it.
31 Banesto appealed against that order to the Audiencia Provincial de Barcelona (Provincial Court, Barcelona), submitting, in essence, that the Juzgado
de Primera Instancia No 2 de Sabadell could not, at that stage of the procedure, hold of its own motion that the contractual term relating to interest
for late payment, which it considered to be unfair, was void or modify that contractual term.
Unfair terms directive
In the order for reference, the Audiencia Provincial de Barcelona found, first, that the Spanish legislation on the
protection of the interests of consumers and users does not empower the courts before which an application for
order for payment has been brought to hold, of their own motion and in limine litis, that unfair contract terms are
void, as the assessment of the lawfulness of such terms falls within the procedure under general national law,
which is initiated only in the event that a debtor lodges an objection.
33 As regards, second, European Union law, that court observed that the case-law of the Court of Justice has, it is
true, interpreted Article 6(1) of Directive 93/13 to mean that national courts are required to raise, of their own
motion, the issue as to whether an unfair term is void and/or inapplicable, even where none of the parties to the
contract has made an application to that effect.
34 However, according to the referring court, Regulation No 1896/2006, which specifically governs orders for
payment at European Union level, does not establish a procedure for the examination, of a court’s own motion
and in limine litis, of unfair terms, but merely lists a series of requirements and information which must be
provided to consumers.
35 Likewise, neither Directive 2008/48, on consumer credit agreements, nor Directive 2009/22, relating to
injunctions against infringements harmful to consumers’ interests, provides for procedural mechanisms which
require national courts to hold, of their own motion, that a term such as that contained in the disputed agreement
is void.
36 Lastly, even if the practice of introducing into a contract concluded between a seller or supplier and a consumer a
term relating to interest on late payments is considered to be ‘unfair’, within the meaning of Directive 2005/29,
since Law 29/2009 amending the statutory rules governing unfair competition and advertising in order to improve
the protection of consumers and users (Ley 29/2009 por la que se modifica el régimen legal de la competencia
desleal y de la publicidad para la mejora de la protección de los consumidores y usuarios), of 30 December 2009
(BOE No 315, of 31 December 2009, p. 112039), did not transpose Article 11(2) of that directive into Spanish law,
the national courts do not, in any event, have the power to examine of their own motion whether that practice is
unfair.
Unfair terms directive
•
•
•
•
•
•
•
It is in those circumstances that the Audiencia Provincial de Barcelona, entertaining doubts as to the correct interpretation of European Union law,
decided to stay the proceedings and to refer to the Court the following questions for a preliminary ruling:
‘(1)
Is it contrary to [European Union] law, in particular the law on consumers and users, for a national court to avoid giving a ruling of its own
motion and in limine litis or at any stage during the proceedings on whether or not a term concerning interest on late payments (in this case 29%) in
a consumer credit agreement is void and on whether or not that term should be modified? May the court, without prejudicing the rights of the
consumer under [European Union] law, decide to leave any evaluation of such a term to the initiative of the debtor (by means of the appropriate
procedural objection)?
(2) In the light of Article 6(1) of Directive [93/13] and Article 2 of Directive [2009/22], what is the correct interpretation of Article 83 of [Legislative
Decree 1/2007] …for those purposes? What is the scope, in that regard, of Article 6(1) of Directive [93/13] where it provides that unfair contract
terms “shall not be binding on the consumer”?
(3) Is it possible to exclude judicial review of a court’s own motion and in limine litis where the applicant clearly states in his application the rate of
interest on late payments, the amount of the claim, including the principal and interest, the contractual penalties and the costs, the interest rate and
the period of time for which that interest is demanded (or a statement that statutory interest is automatically added to the principal under the law of
the Member State of origin), the cause of the action, including a description of the facts relied on as the basis of the claim and the interest
demanded, and it is clearly stated whether it concerns statutory or contractual interest, capitalisation of interest or the interest rate for the loan,
whether it has been calculated by the applicant and the number of percentage points above the Central Bank base rate, as is the case with
[Regulation No 1896/2006] on the European order for payment procedure?
(4) In the absence of their transposition, do Articles 5(1)(l) and (m) and 6(1)(i) of Directive [2008/48], where they refer to “arrangements for its
adjustment”, and Article 10(2)(1), where it refers to “arrangements for its adjustment”, require the financial institution specifically to include and to
highlight in the contract (not in the body of the text, in an undifferentiated manner) as “pre-contractual information” references to the interest rate
applicable in the case of late payments, in the event of default, set out clearly and in a prominent place, and the elements taken into account when
determining them (financial costs, recovery costs etc.) and to include a warning regarding the consequences connected with those cost elements?
(5) Does Article 6(2) of Directive [2008/48] include the requirement to notify the early termination of a credit or loan agreement which gives rise
to the charging of interest on late payments? Is the principle of the prohibition of unjustified enrichment contained in Article 7 of Directive [2008/48]
applicable where the credit institution seeks not only the recovery of the goods (the loan capital), but also the application of an especially high rate of
interest on late payments?
(6) In the absence of any transposing provision and in the light of Article 11(2) of Directive [2005/29], may the court find of its own motion that it
is an unfair practice to include in a contract a term concerning interest on late payments?
Unfair terms directive
•
•
•
On those grounds, the Court (First Chamber) hereby rules:
1. Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer
contracts must be interpreted as precluding legislation of a Member State, such
as that at issue in the main proceedings, which does not allow the court before
which an application for an order for payment has been brought to assess of its
own motion, in limine litis or at any other stage during the proceedings, even
though it already has the legal and factual elements necessary for that task
available to it, whether a term relating to interest on late payments contained in
a contract concluded between a seller or supplier and a consumer is unfair, in the
case where that consumer has not lodged an objection.
2. Article 6(1) of Directive 93/13 must be interpreted as precluding legislation
of a Member State, such as Article 83 of Royal Legislative Decree 1/2007
approving the consolidated version of the General Law for the protection of
consumers and users and other supplementary laws (Real Decreto Legislativo
1/2007 por el que se aprueba el texto refundido de la Ley General para la
Defensa de los Consumidores y Usuarios y otras leyes complementarias) of
16 November 2007, which allows a national court, in the case where it finds that
an unfair term in a contract concluded between a seller or supplier and a
consumer is void, to modify that contract by revising the content of that term.