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Unfair Contract Terms and the Rights of Consumers

There are unfair terms in my contract with a business. What are my rights?

In many cases, after a dispute has arisen, a consumer will find out that the contract he had signed contains terms that are profoundly unfair.

Examples

  1. A term limiting liability in case of death or bodily harm to the consumer ie. a term in an agreement for the purchase of a vehicle stating that «The company is not liable for personal injuries resulting from fire to the vehicle»
  2. A term in a loan agreement stating that interest is calculated based on 360 days instead of 365 or 366 days (in case of a leap year).
  3. A term in a loan agreement stating that the bank has a right to unilaterally demand payment of the loan in full without specifying any criteria for doing so.
  4. A term providing for an automatic renewal of an agreement unless the consumer states otherwise when the deadline for the consumer to do so is excessively remote in time, in relation to the date of expiry. ie. A term stating that «this agreement shall be automatically renewed upon completion of 2 years unless the consumer informs the business that he does not wish for the renewal within 2 months from today».

Such terms are invalid if certain conditions are met, as specified under the Consumer Protection Law of 2021 (which substituted L. 93(Ι)/1996 Law on Unfair Terms in Consumer Contracts.)

The first condition is that the complainant must be a consumer and the other party must be a business. A consumer is any natural person acting for purposes not related to his trade, business or profession. A business is the supplier of services or seller of products, acting for purposes related to their trade, business or profession.

The second condition is that the contract term in question does not meet the requirement of good faith and creates significant imbalance against the consumer. In deciding if the requirement of good faith is met, the following factors are taken into consideration: the bargaining power of the parties, whether the consumer was encouraged to agree to the term, if a special order was made for the products or services by the consumer and the degree to which the business treated the consumer fairly.

In case a contract term is deemed unfair, then it is not binding on the consumer. The remainder of the contract is still binding on the parties unless it cannot survive without the unfair term.

This article does not constitute legal advice.

The publication of this article is partly funded by the European Union’s “Consumer Programme (2014-2020)”.

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