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Case Details

Case Details
National ID 1124/2008
Member State Spain
Common Name Asociación de Usuarios de Servicios Bancarios Consumo (AUSBANC) v. Caja Madrid
Decision type Other
Decision date 12/12/2008
Court Tribunal Supremo (Supreme court)
Subject
Plaintiff
Defendant
Keywords

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

Early repayment clauses in mortgage contracts that allow the bank to terminate them in case the debtor fails to comply with any of his duties (including the repayment installment of taxes or insurance premiums) are not to be deemed “unfair terms”.
The association of consumers for banking services known as AUSBANC brought up a collective action of cessation against the bank “Caja Madrid” to avoid the use and declare the nullity of a standard term included in mortgage contracts, which allowed the bank to terminate the contract in case that its counterparty did not pay either the repayment installment of any kind of tax on the property (including the urban contribution) or the comprehensive insurance premium or fire insurance premium related to it. The Court of First Instance and the Appeal Court dismissed the cased and so does the Supreme Court.
The Supreme Court considers, following the criteria of other previous judgments of the same Chamber, that early repayment clauses are not void but lawful according with art. 1255 of the Civil Code (pacta sunt servanda principle). However, must be take into account that the plaintiff did not make use of any of the provisions established in Law 7/1998 on Standard Terms or Law 26/1984 on Consumer Protection.
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