Unfair Contract Terms Directive, Article 6, 1.

Applying the Unfair Terms Directive to facts which took place before a Member State joined the EU. Interpretation of Art. 6(1) of the Unfair Contract Terms Directive.

In the initial proceedings, Ynos Kft (henceforth the “plaintiff”), an estate agency, brought an action against János Varga (the defendant), a builder. With the intention of selling a property complex he co-owned with his son, the defendant signed a property brokerage contract with the plaintiff on 10th January 2002. The contract was based on a pro forma contract that contained various standard terms and conditions.
Under the terms of the contract, the plaintiff was entitled to a commission fee of 2% of the agreed purchase price if she successfully brokered the sale. Clause 5 in the contract stated that “successfully brokering the sale” meant that a contract was agreed between two parties that the broker had put in touch with one another. Furthermore, the contract stipulated that the broker was entitled to commission if the owner rejected a written offer to buy or rent the property if this at least met the asking price specified in the brokerage contract.
On 11th March 2002, the plaintiff’s manager, the defendant and his son (the latter as seller) signed an “in principle agreement to conclude a contract” with the potential buyers. The agreement established and agreed a purchase price for the property and stated that the parties would agree a purchase contract, or a pre-contract for the purchase contract, by 15th March 2002. Neither the purchase contract itself nor the pre-contract were signed by this date. Nonetheless, the plaintiff believed that she had successfully brokered a sale and thus demanded her commission. (Another key fact is that the property was then sold in 2003 without the estate agent’s having any involvement in the process.)
Since the commission fee was not paid, the defendant filed a lawsuit with the Szombathely district court (Hungary). In his defence, the defendant argued, inter alia, that clause 5 sentence 2 of the brokerage contract, which formed the basis of the plaintiff’s claim, was in fact an unfair contract term, meaning that he did not owe any commission. In the plaintiff’s opinion, this defence was unfounded since the conditions laid down in § 209/B Ptk, which, if met, mean that a term is unfair, had simply not been met in this case.
The Szombathely district court suspended proceedings and requested a preliminary ruling from the European Court of Justice on the following questions:
1. Art 6 para 1 of Directive 93/13/EEC on unfair terms in consumer contracts stipulates that Member States must make arrangements to ensure that unfair terms in contracts agreed between a supplier and a consumer are not binding for the consumer. Is this article to be interpreted in such a way that it can form the basis of a provision in national law, such as § 209 para 1 of the Hungarian Civil Code (Ptk), which applies if a standard contract term has been found to be unfair and according to which unfair terms remain binding for the consumer unless the consumer has made an explicit statement to the contrary, ie if the term has been successfully challenged?
2. The aforementioned provision in the Directive stipulates that the contract remains binding for both parties on the same basis if it can still exist in the absence of the unfair terms. Does it therefore follow that the contract as a whole remains valid provided that it can continue without the unfair terms if the terms developed by the supplier are not binding for the consumer under the provisions in his national law and yet without these terms (which form part of the contract) the supplier would not have agreed the contract with the consumer in the first place?
3. In terms of whether Community law applies, is it significant that the initial proceedings were launched prior to Hungary’s accession to the EU, but after its national law had been brought into line with the Directive?

Currently, only the Advocate-General Antonio Tizzano’s reasoned opinon of 22/09/2005 is available.

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