Wednesday, 3 May 2017

Foreign currency and unfair terms: Opinion AG Wahl in Case C-186/16

We would like to draw the attention of the readers of our blog to the Opinion of Advocate General Wahl in a case concerning the repayment of a loan in a foreign currency and unfair terms (Case C-186/16, Andriciuc and Others). The Opinion was published last week on 27 April 2017; click here for an extensive summary. 

The case concerned loan agreements in Swiss francs concluded between consumers and a Romanian bank. The terms of the agreement provided for repayment of the loans in Swiss francs. However, the exchange rate more or less doubled between 2007 and 2014. In short, AG Wahl finds that the requirement that contractual terms must be drafted in plain intelligible language cannot oblige the seller or supplier to anticipate and inform the consumer of subsequent changes which were not foreseeable, such as exceptional fluctuations in exchange rates, or to bear the consequences of such changes. According to AG Wahl, an average consumer would not only be aware of the possibility of a rise or fall in the value of the foreign currency, but also be able to assess the economic consequences for the consumer's financial obligations under the agreement. Moreover, AG Wahl emphasises that the 'significant imbalance' between the rights and obligations of the parties is not to be assessed by reference to developments subsequent to the conclusion of the contract which are outside the seller or supplier's control and which could not have been anticipated. 

We have reported earlier on transparency and 'core' terms in credit contracts in foreign currency; see our blog on Kásler (C-26/13).

Also, this blog's founder Joasia Luzak is organising a symposium on various issues of transparency in consumer protection on 27 June 2017 in Exeter; see the announcement

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