Unfair Contract Terms Directive, Article 3, 3. Unfair Contract Terms Directive, ANNEX I, 1., (o)

A clause in a contract for a new build apartment that stipulates that access to both water and electricity will be cut off in the case that the purchasers fail to pay the total purchase price in time without leaving them the option to invoke a defense, is unfair and thus void.

A construction promoter inserted a term in a contract for a new build apartment which deprived the consumer, prior to payment of the total purchase price, of taking possession of the apartment and of any contractual defense against the shutting down of utilities in consequence of late payment. At the time of the provisional acceptance, the consumers raised objections as to the execution of certain works and wanted to compensate the repair costs with the remaining balance of the total price. However, the said contract term forestalled the buyers to rely on the defense based on the exception of non adimpleti contractus (ENAC).

Is a clause which denies the consumer the right to invoke a contractual defense, such as the ENAC, prior to the payment of the whole purchase price valid?

The Court stated that denying the consumers the right to invoke the exception of non-execution of the contract while requiring the consumer to fulfil all his obligations arising from the contract is an unfair clause. According to the Court, this term obliged the consumer to fulfil all his obligations where the seller or supplier does not perform his, as referred to in the Annex to Directive 1993/13.

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The Court of Appeal confirms the judgement of the Court of First Instance Brussels, 17 October 2018, stating that a clause which denies the consumers the right to invoke the exception of non-execution of the contract while requiring the consumer to fulfil all his obligations arising out of the contract is unfair.