Brusse v Jahani BV
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''Brusse v Jahani BV'' (2013) C-488/11 is an EU
consumer protection Consumer protection is the practice of safeguarding buyers of goods and services, and the public, against unfair practices in the marketplace. Consumer protection measures are often established by law. Such laws are intended to prevent business ...
case concerned with
Unfair Terms in Consumer Contracts Directive Unfair may refer to: * The negative form of the adjective ''fair''; unfairness or injustice Injustice is a quality relating to unfairness or undeserved outcomes. The term may be applied in reference to a particular event or situation, or to a ...
. It emphasises the foundations of consumer protection on addressing
inequality of bargaining power Inequality of bargaining power in law, economics and social sciences refers to a situation where one party to a bargain, contract or agreement, has more and better alternatives than the other party. This results in one party having greater power ...
and imbalances in information.


Facts

Mr Asbeek Brusse had a residential tenancy with Jahani BV, a corporation whose business was being a landlord. The tenancy agreement had a penalty clause requiring the tenant pay €25 per day for not fulfilling any obligation under the agreement. When Brusse stopped paying the rent, Jahani BV claimed €5,462 in unpaid rent and €8,325 in penalties.


Judgment


Dutch Courts

The Dutch district court upheld Jahani BV's claims. The Regional Court of Appeal referred the question to the
European Court of Justice The European Court of Justice (ECJ), officially the Court of Justice (), is the supreme court of the European Union in matters of European Union law. As a part of the Court of Justice of the European Union, it is tasked with interpreting ...
(ECJ), asking (1) did the tenancy fall within the Directive's scope, (2) was the national court itself obliged to determine if the contract term was unfair and annul the term under art 6, (3) could it mitigate the penalty or disapply the clause as a whole?


European Court of Justice

The ECJ held that the
Unfair Terms in Consumer Contracts Directive Unfair may refer to: * The negative form of the adjective ''fair''; unfairness or injustice Injustice is a quality relating to unfairness or undeserved outcomes. The term may be applied in reference to a particular event or situation, or to a ...
was based on consumers being in a weaker position, both regarding bargaining power and knowledge. Consumers might have no chance to influence terms drawn up in advance. The inequality for the consumer was aggravated where the contract related to an essential need, namely lodging. However, under article 1(2) contractual terms subject to mandatory statutory provisions of national law were not subject to the Directive, as in the '' RWE case''. The national court would determine whether this was true. Imbalances that consumers face can only be corrected by positive action unconnected to the parties to the contract. The national court had to itself assess whether a contract term is unfair, referring to '' Banco Espanol v Camino'' and '' Banif Plus v Csipai''. If a national court can, it must assess the validity of a measure in light of national public policy rules. A contract, under art 6(1) which has unfair terms continues in existence, apart from the unfair terms. It followed that a national court cannot reduce a penalty amount instead of excluding the clause entirely in its operation against the consumer. The Court's judgment included the following:


See also

*
EU law European Union law is a system of Supranational union, supranational Law, laws operating within the 27 member states of the European Union (EU). It has grown over time since the 1952 founding of the European Coal and Steel Community, to promote ...
*
English contract law English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the Industrial Revolution, it shares a heritage with countries ...


References

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External links


Text of judgment on Bailii
Court of Justice of the European Union case law 2013 in case law