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Case Details
- National ID: Court of Magistrates, Judgement No: 204/2018
- Member State: Malta
- Common Name:Exor Group Limited vs Carmel sive Charles Spiteri
- Decision type: Court decision, first degree
- Decision date: 25/03/2021
- Court: Qrati tal-Magistrati
- Subject:
- Plaintiff:
- Defendant:
- Keywords: unfair terms, price, service contract, standard contract

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Directive Articles

Unfair Contract Terms Directive, Article 3 Unfair Contract Terms Directive, ANNEX I
Headnote

ECLI:MT:CIV:2021:126119

One of the principles emerging from Directive 93/13 is that clauses in consumer contracts should be negotiated between the consumer and the trader to not cause a significant imbalance between the rights and obligations of the parties to the contract to the detriment of the consumer. This applies especially in the case of standard contracts, which are usually more onerous to the consumer than to the trader and which contain terms that have not been negotiated between the trader and the consumer. The contract in question contained a clause requiring the defendant – the consumer in this case – to pay the trader a sum disproportionately high to the value of the service hired should the consumer fail to fulfil his obligations, as well as a clause determining the compensation payable by a consumer who fails to fulfil his obligations, without providing for compensation of the same magnitude should the trader fail to fulfil his.

While the terms of the contract are written in plain and intelligible language, the consumer was not given the opportunity to negotiate these with the trader and the plaintiff did not acquire the consent of the defendant before imposing an obligation to pay additional fees. Furthermore, the contract does not contain a reciprocal obligation to be placed on the plaintiff should he fail to carry out his obligations in terms of the contract.
Facts

The defendant had engaged the plaintiff to carry out works on his car. The contract entered into between the parties contained a clause stating that until all the fees are paid by the consumer, the car will be kept by the trader at a storage facility for the additional payment of €25 a day. The contract entered into was a standard contract, the terms of which were not individually negotiated by the plaintiff and defendant. The defendant refused to pay the storage fees given that the daily fee was disproportionate to the amount that the defendant had to pay the plaintiff for the works carried out.
Legal issue

Principles emerging from Directive 93/13 and the Consumer Affairs Act transposing the provisions of the Directive constitute principles of public policy and should be raised by a Court ex officio.

A term is considered to be unfair if it causes a significant imbalance between the rights and obligations of the contracting parties to the detriment of the consumer.
Decision

The Court considers that the onus of proving that a term in a standard contract was negotiated with the consumers falls on the trader. Furthermore, even though the terms of a contract are drafted in a plain and intelligible manner, if the terms of the contract are not individually negotiated then the contract is a standard one. The Court also noted that it is not necessary for the entire contract to be considered as unjust; having one unfair clause in a consumer contract is enough for this to constitute a breach of the provisions of the Consumer Affairs Act. A consumer contract containing an unfair term will not be binding on the consumer unless the contract can continue in existence without the unfair term.

URL: https://ecourts.gov.mt/onlineservices/Judgements/Details?JudgementId=0&CaseJudgementId=126119

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Result

The Court found for the plaintiff in that the amounts owed to the plaintiff for the works done had to be paid by the defendant. However, the defendant was not liable to pay for the storage fees.

Case law

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