Unfair terms governing default interest and accelerated termination in recent European and national caselaw. The modification of acceleratedtermination clauses in favour of the consumer

Abstract

In this article the author examines the recent European and national caselaw concerning unfair terms governing default interest and accelerated termination. With regard to default interest and on the basis of European caselaw, the author argues that, once it has been established that the terms are unfair, they should be directly eliminated from the contract given that any attempt at modifying or redrafting the contract in this situation would constitute modification in favour of the party dictating the terms, to the prejudice of consumers, which is outlawed in particular by the Judgments of the ECJ of 14 June 2012 and 21 January 2015 and the Order of the ECJ of 11 June 2015, and by artículos 65 and 83 of the Revised Text of the General Consumer and User Protection Law. However, with regard to clauses governing accelerated termination, the author, in agreement on this point with the principle established by the Judgment of the Supreme Court in plenary session of 23 December 2015, favours modification in favour of consumers in accordance with artículos 65 and 83 of the Revised Text of the General Consumer and User Protection Law and European caselaw, given that continuing with the foreclosure procedure protects debtors from the adverse effects of the application of artículo 693.1 of the Civil Procedure Act in relation to artículo 670.4.3 of the said Act, and allows them to benefit from the provisions of artículos 579, 682, and 693.3 of the Civil Procedure Act, i.e. the partial writeoff of the residual debt, the reserve pnce for the auction and rehabilitation of the contract, with cancellation of the mortgage foreclosure procedure (by settling all arrears).