Decided on 30 April 2014
Relevant Articles: Article 4(2) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts
This request for a preliminary ruling concerns the interpretation of Articles 4(2) and 6(1) of Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29, ‘the Directive’ or ‘Directive 93/13’). The request has been made in proceedings between Mr Kásler and Ms Káslerné Rábai (‘the borrowers’) and OTP Jelzálogbank Zrt (‘Jelzálogbank’) concerning the allegedly unfair contractual term relating to the exchange rate applicable to repayments of a loan denominated in a foreign currency.
In its judgment, the court of second instance held that Jelzálogbank did not provide any mercantile financial services relating to the buying or selling of foreign currency, so that it is not entitled to apply an exchange rate for the repayment of the loan different from that used on the date of advance of the sum borrowed, and no payment can be required for a notional provision of services. That court also held that Clause III/2 was not drafted in plain intelligible language because it was impossible to determine the basis for the difference in the method of calculating the amount of the sum lent and the amount of the loan repayment instalments.
In EU law he twelfth, thirteenth, nineteenth, twentieth and twenty-fourth recitals in the preamble to Directive 93/13 state that the statutory or regulatory provisions of the Member States which directly or indirectly determine the terms of consumer contracts are presumed not to contain unfair terms; … Contracts should be drafted in plain, intelligible language, the consumer should actually be given an opportunity to examine all the terms. It also states that the courts or administrative authorities of the Member States must have at their disposal adequate and effective means of preventing the continued application of unfair terms in consumer contracts’. According to Article 3 of the Directive, a contractual term which has not been individually negotiated 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. Article 5 of the Directive provides that ‘in the case of contracts where all or certain terms offered to the consumer are in writing, these terms must always be drafted in plain, intelligible language’.
On those grounds, the Court (Fourth Chamber) hereby rules: Article 4(2) of Directive 93/13 must be interpreted as meaning that, as regards a contractual term such as that at issue in the main proceedings, the requirement that a contractual term must be drafted in plain intelligible language is to be understood as requiring not only that the relevant term should be grammatically intelligible to the consumer, but also that the contract should set out transparently the specific functioning of the mechanism of conversion for the foreign currency to which the relevant term refers and the relationship between that mechanism and that provided for by other contractual terms relating to the advance of the loan, so that that consumer is in a position to evaluate, on the basis of clear, intelligible criteria, the economic consequences for him which derive from it. 6(1) of Directive 93/13 must be interpreted as meaning that, in a situation such as that at issue in the main proceedings, in which a contract concluded between a seller or supplier and a consumer cannot continue in existence after an unfair term has been deleted, that provision does not preclude a rule of national law enabling the national court to cure the invalidity of that term by substituting for it a supplementary provision of national law.
Read the case C 26/13
