THE BOTTOM LINE
- Termination Clauses Under Scrutiny: Standard contract clauses that give businesses an automatic right to terminate for any consumer non-payment, regardless of severity, are at high risk of being deemed unfair and void by Dutch courts.
- No Legal Safety Net: If a contract’s termination clause is found to be unfair, the company cannot fall back on general statutory law to justify its actions. The unfair clause is simply removed, leaving the business without that contractual remedy.
- Risk of Reversal: A company that acts on an unfair termination clause (e.g., by repossessing goods) may itself be found in default, forfeiting its right to claim future payments, termination fees, or related costs from the consumer.
THE DETAILS
In a stark reminder of the power of consumer protection laws, the Amsterdam District Court has issued an interim ruling against a major financial services company, Stellantis Financial Services. The case involved a consumer who had defaulted on car lease payments. Acting on its general terms, the company terminated the lease, repossessed the vehicle, and sued the consumer for the outstanding debt, including a termination fee. Although the consumer did not appear in court, the judge was required by EU law to proactively assess the fairness of the contract terms.
The court’s analysis focused on the termination clause (Article 22 of the Keurmerk Private Lease conditions). This provision granted the leasing company the right to terminate the agreement if the consumer failed to pay one or more installments. The judge found this clause created a significant imbalance against the consumer. It deviated from the standard legal principle that termination is only justified if the breach is sufficiently serious. By allowing termination for potentially minor payment delays, the clause gave the company a disproportionately powerful tool, making it unfair under the EU Unfair Contract Terms Directive.
Crucially, the court confirmed that an unfair clause cannot be corrected or replaced by the general provisions of the law. Citing key European case law, the judge ruled that the clause must be set aside entirely. As a result, the leasing company had no valid contractual basis to terminate the agreement. Its act of repossessing the car was therefore not a remedy but a breach of its own obligation to provide the vehicle to the consumer. This “creditor’s default” means the company lost its right to claim any further lease payments or termination fees from the date the car was taken back. While the consumer remains liable for payments due before the repossession, the bulk of the company’s financial claim was denied.
SOURCE
Source: Rechtbank Amsterdam
