1. The facts in a nutshell
A consumer had a securities account with a Belgian bank. A few years later, he decided to change banks and transfer his portfolio. The bank charged a cost of 150 euros per line of securities.
The consumer refused to pay this cost. According to him, the contract conditions were not clear. According to the consumer, the general terms and conditions stated that he could end his relationship with the bank free of charge provided that one month’s notice was given. However, other contract documents, such as the tariff list, indicated that the transfer of each line of securities entailed a cost of 150 euros.
Because that information was spread across different documents, the client was of the opinion that an average consumer could not understand the whole. The Antwerp Court of Appeal followed this reasoning and declared the provisions in question null and void due to a lack of transparency.
2. The judgement of the Court of Cassation
The Court of Cassation confirmed that the transparency of a contractual provision is an important element in the assessment of whether it is lawful. At the same time, it emphasises that this is only one factor within a broader assessment.
According to the Court, the judge must always determine whether the provision, in light of all circumstances, creates an apparent imbalance between the rights and obligations of the parties. Hence, a lack of transparency in itself does not suffice.
‘An apparent imbalance’ means that the contractual provision creates a clear and considerable disadvantage for the consumer. Only when that difference is noticeable and unacceptable can a provision be considered unlawful. Therefore, the judge should be careful when testing this open rule.
The Court expressly states that the judgement should be based on a global analysis, taking into account, among other things:
- The nature of the services;
- The other contract conditions;
- And the circumstances in which the contract was concluded.
In this case, the Court of Appeal had concluded that the provision was unlawful only on the basis of the lack of clarity found, without explicitly studying whether there was an apparent imbalance. The Court of Cassation considered that reasoning void, which is why the contested judgement was annulled.
3. What does this mean for your contracts?
The judgement confirms that an unclear provision is not automatically void. Transparency remains important, but a lack of it in itself does not constitute grounds to declare it null and void. The judge always looks at the whole. He/she takes into account all circumstances of the agreement. As a result, a provision may remain valid, despite some lack of clarity, if there is no apparent imbalance.
However, this judgement reminds us of how fast discussions can arise when essential information, such as costs, is not communicated clearly.
The fact that the price information was spread across several documents gave the consumer arguments to state that he could not assess the financial consequences of changing banks, and led to court proceedings.
Therefore, the practical lesson is not only to make provisions ‘readable’, but also to bundle and proactively provide key information – especially regarding costs – both before and during the conclusion of the contract, as well as during its performance (in case of new or updated costs).
Do you have doubts about the lawfulness of your contracts or general terms and conditions? As lawyers specialised in commercial and bank law, we are happy to think strategically with you. Feel free to contact us for an analysis of your contracts.
