#62025CJ0246EU Court ruling on unfair terms in mortgage loan addendums
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This ruling explains what courts must do when an addendum to a consumer mortgage contract contains unfair terms. The Court says EU consumer law does not automatically block national courts from treating the addendum as void and returning the loan to its original terms.
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Key Changes
- National courts may restore the original mortgage terms after an unfair addendum is voided, but only after checking the real impact on the consumer.
- Courts must consider whether restoring the old terms benefits the bank or harms the borrower.
- The outcome must protect the consumer and still discourage banks from using unfair contract terms.
Obligations
What this law requires
Informational note: Article 6(1) of Directive 93/13/EEC is discussed as requiring that unfair terms in consumer contracts are not binding on the consumer, while the contract continues to bind the parties if it is objectively capable of continuing without those unfair terms.
Informational note: Article 7(1) of Directive 93/13/EEC is discussed as requiring Member States to ensure adequate and effective means to prevent sellers or suppliers from continuing to use unfair terms in consumer contracts.
Informational note: The national measure under examination is Polish case-law under which, when an addendum to a mortgage loan agreement is void because it contains unfair terms, the addendum is treated as never concluded and the original mortgage agreement terms are restored.
Informational note: The Court frames the effect of finding a term unfair as restoring, in principle, the legal and factual situation the consumer would have been in if the unfair term had never existed, including restitution of advantages wrongly obtained by the seller or supplier to the consumer’s detriment.
Informational note: The Court states that national courts are to exclude the application of unfair contractual terms so that they do not produce binding effects on the consumer, unless the consumer objects.