ECJ: RWE Gas Price Clauses are Subject to Review of Unfairness

In its decision of 21 March 2013 the European Court of Justice (ECJ) ruled that standard terms in consumer contracts remain subject to review for unfairness if the statutory provisions they reproduce are applicable only to another category of contracts.

The consumer association for North Rhine Westphalia (Verbraucherzentrale) claimed at German courts that a standard clause in contracts with special consumers (Sondervertragskunden) which RWE reserves the right unilaterally to amend the price is unfair. RWE concluded contracts with consumers for the supply of gas, on the basis of freedom of contract (special contracts). As well as the possibility of concluding such contracts, RWE and other gas suppliers are obliged under national legislation to conclude contracts with consumers in which a standard tariff is applied (standard tariff contracts).

The provisions on changes to gas prices in the general terms and conditions incorporated into the special contracts at issue in the present case referred to the national legislation or the standard conditions whose wording corresponded to that legislation, which did not apply to those contracts and governed standard tariff contracts only. The legislation allowed the supplier to vary gas prices unilaterally without stating the grounds, conditions or scope of the variation, while ensuring, however, that customers would be informed of the variation and would if appropriate be free to terminate the contract.

In the period from 1 July 2003 to 1 October 2005 RWE increased its gas prices on four occasions. The Verbraucherzentrale Nordrhein-Westfalen claimed from RWE reimbursement of the additional amounts paid to it by those consumers following the price increases. Having lost at lower courts, RWE turned to the BGH (Federal Court of Justice). The BGH requested the preliminary ruling of EJC with regard to the following question:

  • Is Article 1(2) of … Directive 93/13 … to be interpreted as meaning that contractual terms concerning price variations in gas supply contracts with consumers who are to be supplied outside the general obligation to supply gas and on the basis of the general freedom of contract (special customers) are not subject to the provisions of the directive if, in those contractual terms, the statutory provisions which apply to standard tariff customers within the framework of the general obligation to provide a connection and supply gas are incorporated unchanged in the contractual relationships with special customers?
  • Are Articles 3 and 5 of … Directive 93/13 … – in so far as they are applicable – to be interpreted as meaning that contractual terms concerning price variations in gas supply contracts with special customers meet the requirements for plain and intelligible wording and/or possess the requisite degree of transparency if, although the grounds, conditions and scope of a change in price are not set out, it is nevertheless ensured that the gas supply company informs its customers of every price increase in good time in advance and those customers have the right to terminate the contract by way of notice if they do not wish to accept the amended conditions of which they have been informed?

By its judgement the EJC decided that such terms must be subject to review for unfairness if the statutory provisions they reproduce are applicable only to another category of contracts. The right of termination conferred on the consumer must actually be capable of beeing exercised in the specific cirumstands. The EJC points out that it is the national court to determine in each individual case whether such term complies with the requirements of good faith, balance and transparency.

Source: EJC

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