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Case Details
- National ID: Regional Court, Kurzeme, Judgement CA-0037-21/4, C33491719
- Member State: Latvia
- Common Name:N/A
- Decision type: Court decision in appeal
- Decision date: 18/02/2021
- Court: Kurzemes apgabaltiesa
- Subject:
- Plaintiff:
- Defendant:
- Keywords: consumer rights, assessment of unfairness of a contract term, penalty

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Directive Articles

Unfair Contract Terms Directive, Article 2, (b) Unfair Contract Terms Directive, Article 3, 1.
Headnote

ECLI:LV:KUAT:2021:0218.C33491719.6.S

The unfairness of a contractual penalty clause included in a cooperation contract for sale of a real estate belonging to the consumer should be assessed.
Facts

A real estate company brought a claim against the consumer seeking a contractual penalty envisaged in a cooperation contract for sale of the real estate belonging to the consumer. The contract envisaged that the company was obliged to organize all activities for the sale of the real estate belonging to the consumer for the price specified in the contract in return of remuneration for providing agency services. The consumer sold the real estate independently, which was considered by the other contract party as a unilateral withdrawal from the contract leading to the payment of the contractual penalty in the amount of 2 % from the specified price of the real estate. The first instance court dismissed the claim by establishing that the penalty clause is not applicable in the given case without even discussing consumer protection law norms. This judgement was appealed by the plaintiff before the appeal instance court.
Legal issue

The question to be decided by the appeal instance court related to the issue of whether the contractual clause containing the penalty should be declared as unfair or not.
Decision

The appeal instance acknowledged that the contract is subject to application of the regulation of unfair contract terms as it met the requirements as there was a consumer and a service provided. The appeal instance court admitted that the contract is not a standard contract but an exclusive contract for a particular cooperation for sale of the real estate. The court did not find that the penalty clause caused a significant imbalance in the parties’ rights and obligations arising under the contract contrary to good faith to the detriment of the consumer. Specifically, the court emphasized that the contract term (i.e., longer than a year) is considered reasonable. Furthermore, the court indicated that the proportion between the specified sum for the sale of the real estate and the sum for which it was sold by the defendant should be evaluated as more onerous for the plaintiff. Therefore, the court concluded that such a contractual penalty clause was not detrimental for the consumer as the plaintiff was obliged to sell the real estate for a more profitable price. It led the court to the conclusion that the contractual penalty clause should not be considered unfair.

URL: https://manas.tiesas.lv/eTiesasMvc/nolemumi/pdf/453219.pdf

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Result

The Court fully upheld the appeal and satisfied the claim by collecting the contractual penalty and court expenses. The judgement was appealed but entered into force afterwards as the Supreme Court refused to initiate cassation proceedings.

Case law

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