Consumers’ ability to waive rights in respect of unfair terms (XZ v Ibercaja Banco SA)

Table of contents

• What are the practical implications of this case?
• What was the background?
• What did the court decide?
• Can a potentially unfair term be the subject of a novation agreement?
• Was the new ‘floor’ term individually negotiated?
• Can a consumer waive their rights of action under UTCCD?
• What information must be provided on the ‘floor’ term to satisfy the transparency requirement?
• Case details

Article summary

Commercial analysis: the Court of Justice ruled that it is possible for a potentially unfair term to be the subject of a novation agreement between a seller/supplier and a consumer, and that a consumer is able to waive their right under the Unfair Terms in Consumer Contracts Directive (UTCCD) to rely on the non-binding nature of an unfair term, provided such a waiver was a result of the consumer’s free and informed consent. However, a consumer cannot waive their rights under UTCCD in respect of future disputes.