Abstract
The Swiss legal and judicial control of price (related) terms in standard form contracts is fairly complex. For historical reasons and partially by coincidence, the legislator relies on a hybrid approach that combines elements of the law of obligations and the law against unfair competition. As a result, the control of standard contract terms lacks legislative coherence and raises challenging questions of interpretation for legal scholars and courts.
With regard to the law of obligations, standard contract terms are subject to control under three aspects: First, standard terms must be included in the contract by the parties’ mutual consent. Secondly, judicial guidelines have emerged as to the proper interpretation of standard contract terms and, thirdly, standard contract terms must comply with Swiss mandatory law, i.e. their content must neither be unlawful nor immoral.
As for the judicial review of standard contract terms pursuant to the law against unfair competition, Art 8 UCA (2011) states that the “use of general terms and conditions which, in contradiction to the principle of good faith, provide for a substantial and unjustified disproportion between the contractual rights and obligations to the detriment of the consumer” are deemed unfair. The practical bearing of this provision, which aims at the protection of consumers, remains unclear as it combines elements that are hard to reconcile. How and when can the use of “bad faith” standard contract terms be justified? The answer is far from clear and case law has not given any answer to date. Recent legal doctrine suggests that if a substantial disproportion of contractual rights and obligations is established, the court has to assess whether such disproportion violates the principle of good faith, i.e. whether the contracting party having supplied the standard terms could assume in good faith that the other party (consumer) would have accepted those terms without objection even if they had been subject to individual negotiation. In case a substantial disproportion of contractual rights and obligations turns out to be contrary to good faith, the presumption arises that it is also unjustified. The burden of proof falls then on the party having supplied the (unfair) standard terms to provide conclusive evidence that the disproportion of contractual rights and obligations is adequately counterbalanced by concrete and material advantages granted by other contract terms. Although Art 8 UCA (2011) does not say so, the dominant opinion considers that unfair contract terms are null and void.
As regards the judicial control of contractual price terms, two aspects should be kept apart: on the one hand, the question whether and, if so, to what extent price (related) terms in standard form contracts are subject to judicial review and, on the other hand, whether price adjustment clauses in standard form contracts are valid.
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Notes
- 1.
See Art 27 Swiss Constitution; Arts 1, 19(1) Swiss CO; BGE 15 March 2010, 136/2010 I 203 cons 4.4.1.
- 2.
Such persons may be natural persons (cf. Arts 11–16 Swiss CC) or legal entities (cf. Arts 52–56 Swiss CC).
- 3.
Arts 1, 18 Swiss CO.
- 4.
Arts 1, 68, 97 Swiss CO.
- 5.
By mutual agreement, the parties may modify their contract terms any time. Cf. Art 115 Swiss CO.
- 6.
Such statutory rules are usually mandatory law.
- 7.
Instances where a contracting party can claim a price reduction under the rules of warranty (for instance, reduction of sale price [Art 205 Swiss CO], reduction of rent [Art 259d Swiss CO], reduction of price for work [Art 368 Swiss CO]) are not considered here as in those cases the price reduction is a legal remedy for the obligor’s failure to properly perform his contractual obligations.
- 8.
Arts 269-269a Swiss CO.
- 9.
Art 270b Swiss CO.
- 10.
BGE 24 April 2001, 127/2001 III 302 cons 5–6. – See also Art 19 OR2020.
- 11.
Art 2 Swiss CC.
- 12.
Kramer and Probst (2018), paras 293–295.
- 13.
BGE 26 June 1997, 123/1997 III 292, cons 2–6.
- 14.
Cf. for instance BGE 1 February 2016, 4A_428/2015 (para A).
- 15.
Cf. for instance BGE 8 September 2014, 4A_234/2014, cons 3. Often times, one of the parties is a small or medium-sized enterprise that does not have the necessary bargaining power to negotiate a unilateral option for adapting contract terms.
- 16.
Swiss Federal Act Against Unfair Competition 1986, Art 8.
- 17.
Council Directive 93/13/EC of 5 April 1993 on unfair terms in consumer contracts, OJ 1993, L 95/29.
- 18.
For further details: Probst (2016), Art 8 paras 1–4.
- 19.
Cf. the German AGBG (Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen) of 2 December 1976, which was later incorporated into the German BGB (§§ 305–310 BGB). For further details: Kramer et al. (2016), paras 25 ff.
- 20.
For further details: Probst (2016), Art 8 paras 157–161.
- 21.
For further details: Probst (2016), Art 8 para 156.
- 22.
This instrument of judicial control is generally referred to as the “unusualness rule” (“Ungewöhnlichkeitsregel”, “règle dite de l’inhabituel”) and was adopted by the Swiss Federal Supreme Court in BGE 6 December 1983, 109/1983 II 456 cons 4–5. For more details: Probst (2016), Art 8 paras 167–181.
- 23.
See also Probst (2016), Art 8 para 206.
- 24.
See also Probst (2016), Art 8 para 207.
- 25.
Art 19–20 Swiss CO; for further details and provisions of mandatory law see Probst (2016), Art 8. paras 186–203.
- 26.
Art 20(1) Swiss CO. The argument that a standard contract term is void can be raised by a contracting party at any time because this objection is not subject to the statute of limitations. Moreover, a judge has to consider whether a term is void ex officio, i.e. regardless of whether or not a party has raised this objection.
- 27.
Typically, this is the case when a standard clause, which is abusively disadvantageous to the customer, is couched in clear and intelligible terms. See also Probst (2013), pp. 250–251.
- 28.
For further details: Probst (2013), pp. 252–253.
- 29.
See Probst (2013), pp. 253–255.
- 30.
Council Directive 93/13/EC of 5 April 1993 on unfair terms in consumer contracts, OJ 1993, L 95/29.
- 31.
See Probst Wettbewerbsrecht und Konsumentenschutz – Ein (dis-)harmonisches Konkubinat? (2017a), paras 61–73.
- 32.
To date, the only decision rendered by the Swiss Federal Supreme Court was BGE of 15 July 2014, 140/2014 III 404 cons 3–4, which dealt with the issue of intertemporal application of Art 8 UCA (2011). The Court held in this case that the legal dispute (regarding the validity of a clause providing for an automatic extension of a fitness studio contract) was governed by the old Art 8 UCA (1986). In an obiter dictum, the Court added that, under the new Art 8 UCA (2011), such clauses would not be considered as per se invalid. – For further details Probst (2016), Art 8 paras 223–228, 324–325.
- 33.
For further explanations: Probst (2016), Art 8 paras 293–297.
- 34.
The following claims are provided by Art 9 UCA: request for prohibition of (imminent) infringement; request for removal of ongoing infringement or request for establishing unlawfulness of infringement.
- 35.
For further details: Probst (2016), Art 8 paras 290–291.
- 36.
Probst (2016), Art 8 para 292.
- 37.
Probst (2016), Art 8 para 301.
- 38.
For further details: Probst (2016), Art 8 para 299.
- 39.
Probst (2016), Art 8 para 299.
- 40.
Probst (2016), Art 8 para 153.
- 41.
Probst (2016), Art 8 para 189.
- 42.
See annex to the Directive 93/13/EC.
- 43.
Probst, Bankgebühren und der Schutz des Kunden vor missbräuchlichen AGB (2017b), paras 20–21.
- 44.
This provision reads as follows: “Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.”
- 45.
See recital 19 Directive 93/13/EC (“… .whereas the main subject matter of the contract and the price/quality ratio may nevertheless be taken into account in assessing the fairness of other terms…”).
- 46.
In BGHZ 13 May 2014 (XI ZR 405/12), the German Bundesgerichtshof held, first, that a standard term charging a onetime processing fee of 1% for a loan granted by a bank to a consumer is subject to judicial control under § 307 BGB and, secondly, that this processing fee is unfair and invalid. – In The Office of Fair Trading v Abbey National plc & Others, [2009] UKSC 6, the English Supreme Court dealt with the question of whether charges levied by banks for unauthorised overdrafts from holders of personal current accounts were subject to judicial control under the Unfair Terms in Consumer Contracts Regulations 1999 SI 1999/2083. The Court held that such overdraft charges were not subject to judicial control under the Regulations 1999 because “there is no possible basis on which the court can decide that some items are more essential to the contract than others” (para 39). In other words, the English Supreme Court rejected the idea of a sufficiently reliable test to distinguish “essential” contract terms (exempt from judicial control) and “ancillary” contract terms (subject to judicial control).
- 47.
Art 8 EU Directive 93/13/EC (“Member States may adopt or retain the most stringent provisions compatible with the Treaty in the area covered by this Directive, to ensure a maximum degree of protection for the consumer.”).
- 48.
CJEU Judgment of 30 April 2014, Kásler and Káslerné Rábai, C-26/13, EU:2014:282, paras 49–50.
- 49.
See recital 19 of Directive 93/13/EC.
- 50.
CJEU Kásler (n 47), paras 54–55. – In the CJEU Judgment of 26 April 2010, Invitel, C-472/10, EU:C:2012:242, para. 23, the Court had previously held that a standard clause providing for a mechanism to amend the prices for the services supplied to the consumer was open to judicial review because the exemption of Art 4(2) was not applicable.
- 51.
CJEU Judgment of 26 February 2015, Matei, C-143/13, EU:C:2015:127, paras 54–60, 64, 78.
- 52.
CJEU Judgment of 23 April 2015, Van Hove, C-96/14, EU:C:2015:262, paras 33–39.
- 53.
CJEU Judgment of 20 September 2017, Andriciuc and others, C-186/16, EU:2017:703, para 40.
- 54.
CJEU Andriciuc and others (n 52), para 41.
- 55.
See Arts 1(1) in conjunction with Art 2(1) Swiss CO. Cf. also Art 1 Swiss CC. – For further details: Probst, Bankgebühren und der Schutz des Kunden vor missbräuchlichen AGB (2017b), paras 20–25.
- 56.
See Art 184(3) Swiss CO, which states that the “price is deemed sufficiently determined where it can be determined from the circumstances“. For example, if traded goods are bought by the buyer without any indication of the purchase price, the goods are presumed to be sold at the current market price at the time and place of performance (Art 212(1) Swiss CO). Likewise, if a loan agreement does not stipulate the interest rate, it is presumed that the customary rate for such loans at the time and place when the loan was received applies (Art 314 (1) Swiss CO). – By analogy, the same rationale may apply to other contracts.
- 57.
Art 184 Swiss CO.
- 58.
Art 313(1) Swiss CO; cf. BGE 3 March 2010, 136/2010 III 308 cons 3.2.1.
- 59.
Art 319 Swiss CO.
- 60.
Art 363 Swiss CO.
- 61.
Art 394(3) Swiss CO (“Remuneration is payable where agreed or customary”) [emphasis added]. See also Probst, Bankgebühren und der Schutz des Kunden vor missbräuchlichen AGB (2017b), paras 16 and 23.
- 62.
Art 313(2) Swiss CO (“In commercial transactions, interest is payable on fixed-term loans even where this has not been […] agreed”) [emphasis added].
- 63.
Art 472(2) Swiss CO (“The bailee may claim remuneration only where this has been expressly stipulated or was to be expected in the circumstances”) [emphasis added]. See also Probst, Bankgebühren und der Schutz des Kunden vor missbräuchlichen AGB (2017b), paras 15 and 24.
- 64.
Art 21 Swiss CO.
- 65.
Art 23–31 Swiss CO (error, fraud and threat).
- 66.
- 67.
See supra, Sect. 3.3.
- 68.
See supra, Sect. 4.1.
- 69.
Cf. Art 1(3) Swiss CC.
- 70.
See supra, Sect. 3.2.
- 71.
See supra, Sect. 3.3.
- 72.
See supra, Sect. 3.2.1.
- 73.
BGE 28 October 2008, 135/2008 III 10 cons 2.5; see also: Probst, Bankgebühren und der Schutz des Kunden vor missbräuchlichen AGB (2017b), paras 48–49.
- 74.
See supra, Sect. 3.3.2.
- 75.
Without the contract adjustment clause, the consumer could reject the seller’s/supplier’s offer for a modification of their contract at his free discretion. See also Probst, Bankgebühren und der Schutz des Kunden vor missbräuchlichen AGB (2017b), para 53.
- 76.
For further details: Probst, Bankgebühren und der Schutz des Kunden vor missbräuchlichen AGB (2017b), para 54.
- 77.
Federal Act on Consumer Credits (2001), SR 221.214.1.
- 78.
Pursuant to Art 14 CCA, the Federal Council is vested with the power to determine the applicable maximum interest rate for consumer credits in light of the current financial market conditions. For the year 2017, the maximum interest rate was fixed at 10% and 12% respectively depending on the type of consumer credit (cf Art 1 of the Ordinance of the Federal Department of Justice and Police 2016, SR 221.214.111).
- 79.
Federal Act on Cartels and Other Restrictions on Competition (1995), SR 251.
- 80.
An “undertaking” is any supplier or buyer of goods or services that is active in commerce regardless of the specific organizational or legal form (cf Art 2 par. 1bis Cartel Act).
- 81.
Art 4(2) Cartel Act.
- 82.
BGE 17 June 2003, 129/2003 II 536 cons 6.3.1.
- 83.
Cf. Art 2(1bis) Cartel Act.
- 84.
BGE 23 May 2013, 139/2013 II 318 cons 5.
- 85.
Art 7(1) Cartel Act.
- 86.
For further details: Kramer et al. (2016), paras 601–608.
References
Kramer EA, Probst T (2018) Obligationenrecht. Allgemeiner Teil, 3nd edn. Verlag, Basel, paras 293–295
Kramer EA, Probst T, Perrig R (2016) Schweizerisches Recht der Allgemeinen Geschäftsbedingungen. Stämpfli, Bern, paras 25 ff, 601–608
Probst T (2013) In: Jung P (ed) Europäisches Privatrecht in Vielfalt geeint. Richterliche Eingriffe in den Vertrag. Sellier European Law Publishers, München, paras 252–255
Probst T (2016) Art. 8. In: Jung P, Spitz P (eds) Handkommentar zum Bundesgesetz gegen den unlauteren Wettbewerb. Stämpfli, Bern
Probst T (2017a) Wettbewerbsrecht und Konsumentenschutz. Ein (dis-)harmonisches Konkubinat ? Jusletter 6 February 2017, paras 61–73
Probst T (2017b) Bankgebühren und der Schutz des Kunden vor missbräuchlichen AGB. Jusletter 24 April 2017, paras 16, 20–25, 48–49 and 54
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Probst, T. (2020). Control of Price Related Terms in Standard Form Contracts in Switzerland—The Control of Standard Contracts Terms: The Swiss Approach. In: Atamer, Y.M., Pichonnaz, P. (eds) Control of Price Related Terms in Standard Form Contracts. Ius Comparatum - Global Studies in Comparative Law, vol 36. Springer, Cham. https://doi.org/10.1007/978-3-030-23057-9_26
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