Unfair terms in credit contracts denominated in foreign currency – clause replacement by dispositive national regulations.
On 30.04.2014 the CJEU delivered its judgment C-26/13 (Kásler/OTP) on the limits of the review of unfair terms and the “validation” of credit contracts denominated in foreign currency in the case of incapability of continuing in existence within the meaning of the Unfair Terms Directive 93/13/EEC. In mid-June 2014 the fundamental judgment of the Hungarian Kúria followed, in which the court tried to solve the main problem of the Hungarian credit contracts denominated in foreign currency with harmonizing effect.
The Kásler judgment (C-26/13) of the CJEU lays down augmented requirements for the principle of transparency, whereby the judgment should be assessed as pathbreaking for the review of terms in credit contracts. The CJEU clearly states that the contractual terms must be drafted in plain intelligible language, so that the consumer can foresee, on the basis of clear, intelligible criteria, the economic consequences for him deriving from it. The consumer should, thus, be able to assess on his own the amount of the repayment and of the total costs of the credit. The judgment conveyed to the national courts a relatively wide margin of discretion in decision-making with regard to the review of contract terms, because the task of the assessment, whether the method of calculating the repayment instalments of credit contracts denominated in foreign currency is one of the contractual essentialia negotii, was assigned to the national court. The CJEU clarifies, however, that the difference between the selling rate and buying rate of the foreign currency is not to be regarded as remuneration; thus, the review of the contract terms pursuant to Art 4 Para 2 Unfair Terms Directive could not be excluded. The CJEU opens the way for the national courts to substitute the invalid terms in case of incapability of continuing in existence of the credit contract and thus to some extent changes its case law.Journal of European Consumer and Market Law