Case law

Unfair Contract Terms Directive, Article 2 Unfair Contract Terms Directive, Article 3, 1. Unfair Contract Terms Directive, Article 5

1.The term “defined” as used in § 869 ABGB is invariably regarded as meaning “definable” in academic literature and in case law. Thus, a statement is to be regarded as “defined” if it is possible to infer from it the legal results the person making the statement is aiming to achieve.
2.With regard to the “defined”-“definable” requirement in § 869 ABGB, § 6 para 3 KSchG affords the consumer protection where clearly “defined” or “definable” contract terms are used, but where the consumer is unable to understand fully the scope of the terms on account of his commercial inexperience.
3.If a contract term (in this case, the repayment of a guaranteed discount), is not defined or definable as per § 869 ABGB from the very outset, then the protection afforded by the KSchG does not apply at all.

The lawsuit filed by the insurance company claimed repayment of 5,983.81 euro from the defendant to cover the premium. It argued that because the insurance contract had been terminated prematurely, the guaranteed long-term discount of 20% of the standard premium should be repaid for the period 1998 to 2000. The defendant objected that there had been no legally valid agreement regarding repayment of the discount should the policyholder cancel the contract. A general remark in the policy indicating that repayment could be demanded was, she argued, insufficient. Moreover, there was no rationale for the repayment figure being demanded.
The Court of First Instance upheld the claim. The Court of Appeal upheld the defendant’s appeal against the ruling and rejected the claim.

In the case in question, the OGH held that the two agreements governing the calculation of the repayment figure were at odds. The calculation method cited in the insurance quote and that contained in the terms and conditions of the insurance package were contradictory and could not be reconciled. In addition, the “short-term rate”, clearly implicit in the terms and conditions of insurance, was utterly unclear. Thus, the assumption had to be that the parties had not reached an adequate agreement on how to calculate the repayment and that the contract term in question had to be regarded as invalid. This did not lead to the conclusion that the entire insurance contract was null and void because the repayment agreement between the two parties was merely a secondary agreement. The fact that it was invalid did not mean that the remaining contract was without meaning or purpose for both sides.
In conclusion, the OGH argued that, with regard to the “defined”-“definable” requirement, § 6 para 3 KSchG affords the consumer protection where clearly “defined” or “definable” contract terms are used, but where the consumer is unable to understand fully the scope of the terms on account of his commercial inexperience. However, if a contract term, as in this case, is not defined or definable from the very outset, then the protection afforded by the KSchG does not apply at all.

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