The object of analysis in this article is Decision ruled by the Supreme Court, first Civil Division, dated November 21st, 2012, that overturns the appeal lodged by the Spanish Bank of Credit (Banco Español de Credito S.A.) against a decision dated January 27th, 2010 issued by the Appeal Court of Oviedo which declared the annulment of two swap contracts signed with the plaintiffs based on the existence of vitiated consent, ordering the restitution of what had been perceived under the same.
The basis of the Appeal Court ruling lays in the insufficient information that was provided by the Bank regarding the economic consequences of the contract signed, meaning that it had determined an error in the Contracting Parties that had vitiated their consent.
More specifically, this error referred to the change of circumstances occurred in the year 2006, in which there was an extraordinary rise in the interest rates which resulted in negative findings out of proportion and considers that such information might have changed the clients’ will.
While the Appeal Court recognized that there was information, it further considers that it was insufficient, specifying which information would have been considered relevant, that is "a reasoned and reasonable prediction of the future behavior of the interests’ rates ". Against such judgment it was filed an appeal by the Bank, which was resolved by the Judgment of the Supreme Court object of this article. The bank´s appeal grounded in two fundamental reasons, an incorrect matching between lack of information in the contract and the error in consent, and violation of Sections 1255 and 1256 of the Civil Code by giving a crippling effect to an error which does not fulfill the legal requirements.
As for the first reason, the Supreme Court agrees with the reproach made given that, although in many cases a lack of information directly implies an error, such equality in absolute terms would not be correct. Noting that, in this case, the Appeal Court had not stated specifically how the anomalous will of the claimant had developed at the time of the agreement.
Moreover, the Supreme Court argues that what was intended by the applicant was a cancellation of the contract due to a lack of consent, and not the annulment for breach of peremptory rules concerning information, which would lead to a review of the legal assessment of the fact.
As for the second reason, it is also agreed by the Supreme Court that considers that the Appeal Court had not taken into account that an error is only considered essential in the development of the contractual will, if had occurred at the time of the completion of the contract, and not, as occurred in this case, on the variation of events after the signing of consent.
In addition, the Supreme Court analyses the legal requirements to estimate that there is a lack of consent, reaching the conclusion that it was not an essential and inexcusable error.
Thus, the High Court consider that, in this case, the Contracting Parties have had perfect knowledge of the speculative nature of the contracts signed, and that had not proven the omissible fraud with regard to the existence of an error by lack of information.
In addition, the Supreme Court considers that the Appeal Court did not argue sufficiently the importance of the information that has been missed at a speculative contract, in which uncertainty is compensated in the hope of profit.
According to the above, it is considered by the Court that the error could not be considered as basis for declaring null and void contracts, and upholds the Appeal lodged by the Bank, that experiences how the judgment of the Appeal Court is overturned.