Control of General Conditions and Unfair Terms in Consumer Contracts
Control of General Conditions
1. Actions
The Act provides two types of actions:
- Individual Actions: Initiated by the adherent.
- Collective Actions: Initiated by various institutions representing the collective interests of adherents, such as partnerships, corporations, entrepreneurs, professional and farmer associations, the Chamber of Commerce, Industry and Navigation, consumer and user associations, the National Consumer Institute, professional associations, and the prosecution (Art. 16 LCGC).
Individual Actions
- Action of Non-Implementation: Exercised when a contractual clause is incorporated due to failure to meet the requirements of Art. 7 LCGC. This occurs if the adherent lacked a real opportunity to fully understand the clause at the time of contract conclusion, if it wasn’t signed (as required by Art. 5 LCGC), or if it’s illegible, ambiguous, obscure, or incomprehensible, unless expressly accepted in writing by the adherent and compliant with specific legislation (Art. 7).
- Action of Nullity: Lodged when conditions are detrimental to the adherent and contrary to LCGC provisions or any mandatory rule, unless a different effect is specified for the offense (Art. 8.1 LCGC). In consumer contracts, the Consumer Defense Law’s provisions on unfair terms must be considered (Art. 8.2 LCGC).
- Non-inclusion or invalidity of specific provisions doesn’t necessarily void the entire contract if it can survive without them. In such cases, the affected part is integrated under Art. 1258 CC (Art. 10 LCGC). Total ineffectiveness occurs only if the non-inclusion or nullity affects essential contract elements (Art. 9.2 LCGC).
Collective Actions (Art. 12)
- Declaratory Action: Seeks a ruling recognizing a general clause as a condition of hiring. A necessary step for the other two actions.
- Injunctions: Seeks to order the defendant to remove invalid general conditions and refrain from using them, clarifying contract content if necessary.
- Action of Withdrawal: Seeks to declare and enforce the defendant’s duty to withdraw recommendations for using void general condition clauses and refrain from future recommendations.
2. Registration of General Conditions of Contract
The Register of General Conditions of Contract (RCGC) publicizes general conditions and judgments affecting their efficiency under the LCGC.
Notations are subject to filing ordinary demands for annulment, declarations of non-incorporation, collective injunctions, declaratory actions of withdrawal (Chapter IV), and judgments suspending a general condition’s effectiveness. Valid for four years (extendable until proceedings completion), notations become enforceable upon final judgments admitting the aforementioned actions. Registration can also occur if the Registrar has sufficient evidence of persistent use of judicially declared void clauses.
Registration is generally voluntary, except when mandated in specific sectors (e.g., mortgage loans, auto insurance) (Art. 11 LCGC).
3. Duty of Certain Professional Information
Notaries and Commercial Property Registrars must inform parties about the scope of their powers and the implementation of the LCGCU (Art. 23 LCGCU).
General Conditions and Unfair Terms in Consumer Contracts
Unfair terms include not only non-individually negotiated terms but also expressly consented practices that, due to bad faith, cause significant imbalance in consumer rights and obligations (Art. 82.1 LGDCU).
Unfairness is assessed case-by-case, considering the goods/services, circumstances at contract conclusion, and other contract terms (Art. 82.3 LGDCU).
Clauses binding the contract to the employer’s will, limiting consumer rights, lacking reciprocity, imposing disproportionate guarantees or proof burdens, or contravening jurisdiction/applicable law rules are generally unfair (Art. 82.4 LGDCU). Articles 85-90 LGDCU further specify these.
Unfair terms are void, typically resulting in partial contract nullity. Total ineffectiveness is declared only if remaining clauses create an unremediable imbalance, even with Art. 1258 CC’s application.