The Hungarian Supreme Court, Curia, issued a final and binding decision (Gfv.VII.30.122/2015) on July 7, 2015 in a class action initiated by the Consumer Protection Association for Financial Services against Lombard Lízing Zrt., which is one of the major Hungarian car leasing companies, in which the court found certain clauses of the general terms of business of Lombard Lízing Zrt. (“GTB”) included in contracts concluded with customers (private individuals and SMEs) to be unfair contract terms and therefore invalid.
Since only certain clauses of the GTB were declared invalid, it did not automatically trigger the invalidity of the entire GTB. Notwithstanding that, partial invalidity may also lead to the invalidity of the entire GTB if the transaction would have not been entered into by the parties in the absence of the invalid clause(s). An invalid clause cannot be referred to by the parties and they cannot exercise any rights originating from such clauses.
Although this decision is binding on Lombard Lízing Zrt the principle of the decision may serve as a guideline for future decisions. Therefore, financial institutions providing lending and/or financial leasing services in the retail market should be aware of the most important statements of the Curia listed below.
In an announcement published on its website, the National Bank of Hungary has declared that it will closely monitor the entire Hungarian leasing sector and will take the necessary actions to terminate, on the basis of the recent Curia decision, the invalid clauses of the general terms of business used by the leasing companies.
This summary aims to demonstrate a number of the uncertainties arising in relation to the requirements that have to be met in leasing and/or lending transactions according to the Curia’s reasoning.
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