Unfair Contract Terms Directive, Article 2, (b) Unfair Contract Terms Directive, Article 3 Unfair Contract Terms Directive, Article 4 Unfair Contract Terms Directive, Article 8 Unfair Contract Terms Directive, Article 8

An appeal against an order for payment of the bank was brought by the debtor and the guarantors, who had concluded  credit agreements with an open revolving account with the bank. The agreements contained general contract terms, which according to the opposing parties were unfair and thus, void. They maintained that if they had been aware of the unfairness of those terms, they would not have proceeded with the conclusion of the agreements. In addition, they argued that the unfairness of the terms leads to the nullity of the whole agreements, based on Article 181 of the Civil Code, and as a result, there are no claims against them. The Court judged that the unilateral change on the floating contractual rate does not constitute an unfair term. It also accepted that the basis for calculating interest rates is the three hundred sixty (360) day year. The Court held that the calculation of the levy on the determination of the rate, which leads to passing the levy on to the debtor, is lawful and it is part of the freedom to set rates related to bank loans. Apart from that, the general term, stating that if the debtor does not raise an objection against the balance of the account within the time limitation from the notification date, set in the agreement, the balance is considered valid in principle, is not unfair according to art. 2 para. 7 of Law no. 2251/1994. The Court dismissed the appeal against the order for payment.

The debtor and the guarantors concluded credit agreements with an open revolving account with the bank. An order for payment of the bank was delivered against the debtor and the guarantors, based on a pecuniary claim deriving from the closure of the account and the final balance. The debtor and the guarantors lodged an appeal against the order for payment. The agreements contained general contract terms concerning the determination of unilateral changes on the floating contractual rate, the calculation of the interest on a basis of a three hundred sixty (360) day year, instead of 365, the passing on of the levy of Law no. 128/1975 and its compound interest, the notional acceptance of changes of the floating contractual rate and the notional recognition of the temporary balance deriving from the closure of the account. The debtor and the guarantors claimed, among other things, that those general contract terms were unfair and thus, void and that if they had been aware of the unfairness of those terms, they would not have proceeded with the conclusion of the agreements. In addition, they argued that the unfairness of the terms leads to the nullity of the whole agreements, based on Article 181 of the Civil Code, and as a result, there are no claims against them.

Were the general contract terms included in the credit agreement between the bank and the debtor and the bank and the guarantors, unfair?

The Court of First Instance rejected the appeal against the order for payment. It judged that the unilateral change on the floating contractual rate does not constitute an unfair term, since it is impossible to know the subsequent increases of the rates. The consumer can be informed by the bank, and the bank shall set specific and reasonable criteria concerning the possibility of unilateral change of the rates. In addition, it accepted that the basis for calculating interest rates is the three hundred sixty (360) day year. There are exemptions to this concerning consumer credit, however, terms in credit agreements with an open revolving account are not exempted and thus, they fall within the general rule of the 360-day year. Furthermore, the Court held that the calculation of the levy of Law no. 128/1975 on the determination of the rate, which leads to passing the levy on to the debtor, is lawful and it is part of the freedom to set rates related to bank loans. Moreover, the term of the credit agreement, which states that if the debtor does not raise an objection against the balance of the account within the time limitation from the notification date, set in the agreement, the balance is considered valid in principle, is not unfair according to art. 2 para. 7 of Law no. 2251/1994. After having recognised the abovementioned, it dismissed the appeal against the payment order.

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The Court of First Instance dismissed the appeal against the order. A legal precedent in law is established in case the judgement is unappealable.