Case law

  • Case Details
    • National ID: 2011:77 (S2010/457)
    • Member State: Finland
    • Common Name:The Consumer Ombudsman vs. TeliaSonera Oyj
    • Decision type: Other
    • Decision date: 10/10/2011
    • Court: Korkein oikeus (Supreme court)
    • Subject:
    • Plaintiff:
    • Defendant:
    • Keywords:
  • Directive Articles
    Unfair Contract Terms Directive, Article 3, 3.
  • Headnote
    A telecommunications operator used in its agreements with consumers concerning mobile phone subscriptions the condition that the agreement continued, after the expiry of the first fixed-term contract, as a new fixed-term contract, unless the consumer terminates the contract before the current contract expires. The condition was not considered unfair to consumers. (Voting)
  • Facts
    TeliaSonera Finland Oyj (TeliaSonera) offered an additional advantage to cutomers who had a mobile phone subscription. The name of the advantage was Sonera Kestoetu (Sonera Continuing Advantage Agreement) and according to the agreement the client was receiving on Sundays all the calls at a reduced fixed price during the contract period. Simultaneously the Kestoetu agreement had been made for at least a one year period, and it changed the service contract of the actual mobile phone subscription (Subscription Agreement) in an equivalent manner into an agreement for a fixed period. These two agreements could be terminated by both the company and the client at any time during the one year contract period, but no later than two weeks before the termination of the contract. According to the Kestoetu agreement the company was committed to send to the holder of the mobile phone subscription as a text or multimedia message a reminder of the ending of the contractual period approximately one month in advance. If neither party terminated the contracts, they were automatically continued for one year with the same terminating conditions.
    As a consequence of the fixed-term Kestoetu agreement client was been able to terminate the Kestoetu agreement or the subscription agreement before the agreed deadline. The terms of the Kestoetu agreement had also included the condition that the number of the subscription could not be transferred to another telecommunications company during the period of the contract.
  • Legal issue
    The Finnish Supreme Court stated in its decision, decided after voting 3 to 2 (extract):
    “6. According to the general clause in Consumer Protection Act, Ch. 3, Sec. 1 Subsection 1, the trader may not, when offering consumption utilities, use a contractual term, which is considered unfair to consumers taking the price of the utility and other relevant factors into account. When assessing the unfairness of the contractual term one should according to the legislative history of the Act (Bill 8/1977 p. 34-37), take into consideration the overall impact of a the contract or the contractual term and the nature of the sector. A term, which contrary to a non-mandatory provision favours unilaterally the seller in a way that disturbs the balance between the parties, is unreasonable. The provision does not preclude, on the other hand, from interfering in terms and conditions, which are in any way confusingly presented.

    7. According to the Unfair Contract Terms Directive (93/13/EEC), Article 3, paragraph 1, a contractual term shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer. The terms of a contract presented in writing should in accordance with Article 5 always be drafted in plain and intelligible language.

    8. To the directive is further attached an indicative list of terms which may be regarded as unfair. A term, which is similar to the contract term subject to the claim, is not listed. This list, on the other hand, is not intended to be exhaustive, which is why a single condition cannot be regarded as reasonable only because it does not appear in the Annex. The starting point, however, is that the list has been established as a tool for assessing the fairness and that the list strives to cover such terms and conditions that tend to be unfair terms in consumer contracts (Bill 218/1994 p. 10-14).

    9. The Kestoetu term in the agreement is a part of the contract document drawn up by TeliaSonera. In paragraph 1, is the special features mentioned, inter alia, that the contract period is fixed and at least one year long, and that the mobile phone subscription contract cannot be terminated during the Kestoetu contract period. Simultaneously there is a notification of changing the terms of the subscription agreement, so that the Kestoetu terms of the contract shall prevail the subscription contract. In paragraph 3 concerning formation and termination of the contract the same terms are repeated in bold text. The automatic continuation of the Kestoetu agreement for a year at a time is reported, if the customer or the company does not terminate the agreement no later than two weeks prior to the termination of the contract. Separately is stated in the subscription agreement that it cannot be terminated during the contract period, but only when the Kestoetu agreement expires.

    10. The Supreme Court takes the view that the periodicity, the termination and the continuation of the Kestoetu and the subscription agreement are presented so clearly that they have been easily intelligible for a normally observant consumer studying the terms.

    11. Agreeing on the Kestoetu has been voluntary for TeliaSonera’s mobile customers. The contract has guaranteed to the customers the gaining of the promised economic benefit, but stipulated on the other hand, to keep to the contract for at least a year. The contractual arrangement has not forced to use the subscription, and the Kestoetu contract itself was free of charge. The client’s financial obligations are therefore limited to the minimum monthly payments for the subscription, which TeliaSonera has announced to have been at the lowest EUR 1.99 per month. A fixed-term agreement has on the other hand protected the customer during the contract period from changes in the terms of the subscription agreement, such as price increases, as changes were not possible until the contract expired.

    12. Due to the contract terms the cancellation period of the fixed-term Kestoetu was at the shortest two weeks and up to one year. In the event that the consumer unintentionally left the contract uncancelled during the contract period, the consumer has been continuously tied to the Kestoetu and the subscription contracts for one year i.e. a fairly long period of time. However, this procedure has already been agreed upon when the Kestoetu contract is concluded, and therefore, the principles of the continuation of the contract and the negative impact on the customer from the contractual term could not have come as a surprise to the consumer. When in the overall assessment also the above described economic benefits and obligations of the contract arrangement are taken into account, the Supreme Court considers that the contractual term in question leading to fixed-term contract periods following each other is according to the Consumer Protection Act, Ch. 3, Sec. 1 as such not to be considered to be unreasonable for consumers.”
  • Decision

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