Brussels, 16/03/2012 (Agence Europe) - National legislation may provide for a contract between a consumer and a trader which contains an unfair term to be annulled if that ensures better protection of the consumer. While, in principle, the EU directive aims only to eliminate unfair terms, it nonetheless allows member states to give consumers a higher level of protection than it provides for.
With this ruling on case C-453/10, delivered on 15 March, the Court responded to the District Court, Presov, Slovakia. Two consumers asked that court to declare their credit agreement void as a whole, arguing that it contained several unfair terms, such as the incorrect statement of the annual percentage rate of charge (APR) of the loan. The Slovakian court calculated this rate as 58.76%, when, in the agreement, the APR was fixed at 48.63%. It asked the Court, therefore, whether the directive 93/13/EEC on unfair terms in consumer contracts, allows it to declare void a consumer contract containing unfair terms if that is more advantageous to the consumer. As the Slovakian court points out, if the agreement were declared void, the consumers in question would be obliged to pay only interest for late payment, at the rate of 9%, rather than all the charges relating to the loan granted, which would be much higher than that interest.
In its judgment the Court of Justice began by noting that the aim of the directive is to eliminate unfair terms in consumer contracts while preserving, if possible, the validity of the contract as a whole, not to abolish all contracts containing unfair terms. It said that, as regards the criteria for assessing whether a contract can indeed continue to exist without the unfair terms, an objective approach must be applied, under which the situation of one of the parties to the contract, in this case the consumer, cannot be regarded as the decisive criterion determining the fate of the contract. Consequently, when an assessment is made of whether a contract containing one or more unfair terms can continue to exist without those terms, the directive precludes the taking into consideration solely of the advantage to the consumer of the annulment of the contract as a whole. However, it does not preclude a member state from laying down, in compliance with EU law, national legislation under which a contract between a trader and a consumer which contains one or more unfair terms may be declared void as a whole where that will ensure better protection of the consumer. Finally, in responding to another question from the Slovakian court, the Court states that a commercial practice, which consists of indicating an APR in a credit agreement lower than the real rate, constitutes false information as to the total cost of the credit which must be classified as a misleading commercial practice within the meaning of the directive on unfair commercial practices (2005/29/EC). While that may be taken into account among other factors for the purpose of finding that contractual terms are unfair under the directive on unfair terms, it is not, however, such as to establish, automatically and on its own, that those terms are unfair. (FG/transl.rt)