The defendant, as part of its operations, provides management services for premium pensions to consumers. In the standard terms some provisions were stating that a contract with a customer could be in force for one, two, three or five years and in case the customer did not terminate the contract, this would be extended for another equally long period. If the customer wanted to terminate the contract, then the customer had to pay for the whole period.
The plaintiff brought an action against the defendant and asked the Patent and Market Court (court of first instance) to prohibit the use of a term stating that a binding period can be of more than 12 months for consumers.
The court of first instance stated that as a starting point a binding period of more than one and two years respectively is to be regarded as exceeding what might be considered allowed by the Act (1994:1512) on contract conditions in consumer relationships. Such a term may be allowed only if the advantages for the consumers overweigh the disadvantages. This was, however, not the case in this situation since the term lead to disadvantages for the consumers (such as extra costs and the missing of other alternatives) which could not be compensated by the advantages (the discounts based on the chosen period).
The defendant appealed the ruling of the court of first instance.