A (Sous-location d'un logement social) (Consumer protection - Obligation of residence and prohibition on subletting the property - Judgment) [2020] EUECJ C-738/19 (10 September 2020)

A (Sous-location d'un logement social) (Consumer protection - Obligation of residence and prohibition on subletting the property - Judgment) [2020] EUECJ C-738/19 (10 September 2020)

National courts must assess the degree of interaction between the term at issue and other contract terms when determining unfairness under Directive 93/13/EEC. Significant weight must be given to terms relating to the same breach when evaluating whether a penalty is disproportionately high.

Citation
[2020] EUECJ C-738/19
Parties
Landlord: A; Tenant: B; Subtenant: C
Jurisdiction
European Union
Judgment Date
10 September 2020
Procedural Posture
Request for Preliminary Ruling / Preliminary Reference
Outcome
Interpretation provided; national court to apply criteria to facts.
Legal Topics
Unfair Contract Terms, Penalty Clauses, Social Housing, Directive 93/13/eec
European Union Law Consumer Law Contract Law Unfair Contract Terms Penalty Clauses Social Housing Directive 93/13/eec

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Parties

A

Landlord

B

Tenant

C

Subtenant

Procedural Posture

Request for Preliminary Ruling / Preliminary Reference

Legal Issues

  1. 1 Interpretation of point 1(e) of the Annex to Directive 93/13/EEC regarding disproportionately high penalties in consumer contracts
  2. 2 Assessment of cumulative effect of penalty clauses in consumer contracts
  3. 3 Relevance of restitution of profits alongside contractual penalties

Ratio Decidendi

National courts must assess the degree of interaction between the term at issue and other contract terms when determining unfairness under Directive 93/13/EEC. Significant weight must be given to terms relating to the same breach when evaluating whether a penalty is disproportionately high.

Court Disposition

Interpretation provided; national court to apply criteria to facts.

Orders

  • National court must consider the degree of interaction between penalty clauses and other terms when assessing unfairness under Directive 93/13/EEC.
  • Significant weight must be attached to terms relating to the same breach when evaluating disproportionate penalties.