If a price was set unfairly, the contract may be invalid even if the trader fails to be paid – dr
Mariusz Korpalski, legal counsel, comments the CJEU judgment.
The Lithuanian Supreme Court asked for interpretation of the Consumer Directive
requirement stating that terms of a service contract (in this case, a legal services
agreement) should be provided in a clear and comprehensive manner and about potential
consequences if a price is found to be determined in an unfair manner.
The CJEU responded that the contract should be drafted in such a manner that a consumer
is able to understand its consequences. It actually sounds to a lot like a Swiss-franc loan
The Consumer Directive governs all trader-consumer relations, not just those between
bank and consumers.
The CJEU held that although a trader cannot be required to inform a consumer of the final
financial consequences of his or her commitment, which depend on future events,
nevertheless he or she has to provide its client with enough information allowing the client
to take a prudent decision whether to enter into a contract. The contract at hand
concerned legal services but are Swiss-franc loans that much different.
Truly, a failure to clearly determine a price to be paid is equally important in each contract.
The CJEU firmly linked this issue with a failure to inform about the actual costs that the
client may be required to pay under the contract. Both issues, i.e. determining a price and
informing of a the actual costs are related but not identical. The amount of remuneration
should be evident from the terms of a contract, while information on the actual costs
indicates what risk could be expected. The first one is a normative statement. The second is
a descriptive statement.
More in the Rzeczpospolita