Case law

Unfair Contract Terms Directive, Article 4, 1. Unfair Contract Terms Directive, ANNEX I, 1., (i)

The courts must analyse the use of standard terms and determine the unfairness thereof on their own initiative (ex officio) when solving a dispute arising from a contract between a consumer and a person who entered into the contract for the purposes of its economic or professional activities.

Plaintiff 1 , a limited liability company, entered into a leasing contract with the defendant. Plaintiff 2, as a consumer, entered into a contract of suretyship with the defendant, undertaking to be liable to the defendant for the performance of plaintiff 1. In the contract there was a reference to the general terms of the defendant. According to the general terms, if there is not enough money on the client's bank accounts that are connected to contracts entered into with the defendant, the defendant has the right to debit all other bank accounts of the client as well. Plaintiff 1 cancelled the leasing contract and stopped making payments to the defendant. The defendant debited both of the plaintiffs' bank accounts. The plaintiffs filed an action against the defendant.

The question that arose before the court in this case - was the defendant allowed to debit the plaintiffs' bank accounts, also the ones that were not connected to contracts entered into with the defendant, as stated in the standard terms of the contract? The right of the defendant to debit all bank accounts depends among other aspects on the validity of the standard term in the defendant's general terms that gives the defendant that right. Court held that the lower courts had not analysed the validity of the standard term. Hence, material facts of the case had not been determined and this constitutes a violation of procedural rules. Court held that the courts are obligated to analyze the use of standard terms on their own initiative when solving a dispute arising from a contract between a consumer and a person who entered into the contract for the purposes of its economic or professional activities.

Should the courts analyse on their own initiative (ex officio) whether the terms used in a consumer contract are unfair?

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The court referred the matter back to the first instance court for a new hearing.