- Powers of national courts to invalidate unfair contract terms (JZ v OTP Jelzálogbank Zrt OTP Bank Nyrt OTP Faktoring Követeléskezelő Zrt)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
EU Law analysis: A borrower under a consumer loan agreement denominated in a foreign currency complained about unfair terms providing for different exchange rates to apply to release of the funds and their repayment. National law remedied that issue to the limited extent of substituting a term providing for an official exchange rate to apply. However, other terms of the agreement pertaining to exchange rate risk continued to be borne by the consumer, who complained that national law was incompatible with EU law on unfair contract terms in this respect. The Court of Justice rejected this complaint. So long as the consumer had effective remedies against the consequences of the unfair term, it was permissible for the agreement as a whole to be upheld even if it was not one that was in the consumer’s interests. Written by Denis Edwards, barrister, Normanton Chambers.
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