The legislative framework governing unfair terms in Consumer Contracts in Ireland has been extended by the publication of the European Communities (Unfair Terms in Consumer Contracts) (Amendment) Regulations 2013 (the 2013 Regulations).
The 2013 Regulations extend the civil remedies available under the European Communities (Unfair Terms in Consumer Contracts) Regulations 1995 (the Principal Regulations) which implemented Directive 93/13/EEC on unfair terms in consumer contracts.
These Regulations apply to any term in a contract concluded between a seller of goods or supplier of services and a consumer, which has not been individually negotiated. A contractual term shall be regarded as unfair, and consequently unenforceable, if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer. The nature of the goods or services for which the contract was concluded, all circumstances concerning the conclusion of the contract and all other terms of the contract should be taken into account when considering this.
The 2013 Regulations provide that the National Consumer Agency, the Central Bank or a consumer organisation (collectively defined as "authorised bodies") may apply to the Circuit Court or the High Court for a declaration that a term drawn up for general use in contracts concluded by sellers or suppliers is unfair. At the discretion of the court, an order banning the use of such a term can be subsequently granted. In addition, the 2013 Regulations insert new provisions under which an authorised body can apply for an injunction, including an interim injunction, against a seller or supplier using a term which the authorised body considers to be unfair.
Unfair terms in consumer contracts were the subject of a recent CJEU ruling in which the court clarified that the concept of "significant imbalance" to the detriment of the consumer, requires the national court to consider the extent that the contract places the consumer in a legal situation less favourable than that provided for by the national law in force. To that end, an assessment of the legal situation of that consumer having regard to the means at his disposal, under national law, to prevent continued use of unfair terms, should also be carried out.