IRPH Mortgages: Application of the law of general contracting conditions
In previous articles we have been commenting on the importance of the ruling of the European Court of Justice of March 3, 2020 on the so-called IRPH mortgages. Our intention is to provide all those affected with all the information they may need, using our experience in these matters.
In this article we will comment on the relevance that the regulations on general contracting conditions have had on said ruling, on the contrary, if you want general information you can find it in our article Everything you need to know about the IRPH.
The general contracting conditions are those clauses of contractual content that are established by one of the contracting parties and imposed on the other party. The general contracting conditions are usually present in the contracting of services (telephone, light, gas, electricity, etc.) and also in banking contracts (loans, deposits of any kind, checking accounts, etc.). Said clauses contained in contracts have commonly been known by the vulgar term of “small print”.
Contracts that include this type of clause are known as adhesion contracts, as they consider that the consumer adheres to the conditions imposed by the professional entity without the possibility of negotiation. Mortgage loan contracts are adherence contracts to the extent that their clauses are not subject to variation by the consumer. Sometimes the consumer can negotiate the specific economic conditions of the loan and slightly vary the requirements of the bank, but equally the drafting of the loan contract is carried out exclusively by the bank without the participation of the consumer.
The classification of mortgage loan contracts as adhesion contracts, and the consideration of their clauses as general contracting conditions, has been a relevant issue in the decision adopted by the Judgment of the European Court of Justice of March 2, 2020. As we already know, this ruling now allows the Spanish consumer affected by the IRPH to claim the extra cost of interest that they have been bearing for years.
In the opinion of the European Court of Justice, the consumer affected by the IRPH was in an inferior situation with respect to the bank, both due to his negotiation capacity and the level of information:
“For this purpose, it is appropriate to recall that, according to settled case law, the protection system established by Directive 93/13 is based on the idea that the consumer is in a situation of inferiority compared to the professional, both in terms of bargaining power and the level of information, a situation that leads him to adhere to the conditions drawn up in advance by the professional without power influence their content (see, in particular, the judgments of June 3, 2010, Caja de Ahorros y Monte de Piedad de Madrid, C‑484/08, EU:C:2010:309, section 27 and cited case law, and of March 26, 2019, Abanca Corporación Bancaria and Bankia, C‑70/17 and C‑179/17, EU:C:2019:250, section 49).”< /p>
The Law 7, of April 13, 1998, defines the General Contracting Conditions as those predisposed clauses whose incorporation into the contract is imposed by one of the contracting parties, regardless of who the material author thereof is, whatever their external appearance or length, and they have been drafted with the purpose of incorporating them into a plurality of contracts.
The Law on General Contracting Conditions applies to any contract that contains such conditions and has been entered into between a professional (predisposing) and a natural or legal person (adherent), understanding by professional any natural or legal person who acts within their professional or business activity.
Art. 5 prevents the requirements for the incorporation of the contract of the general conditions. Section 1 says the following:
“1. The general conditions will become part of the contract when its incorporation into it is accepted by the adherent and is signed by all the contracting parties. All contracts must refer to the general conditions incorporated.
It cannot be understood that there has been acceptance of the incorporation of the general conditions to the contract when the predisposing party has not expressly informed the adherent about its existence and has not provided you with a copy thereof.”
In claims against banks for mortgage loans with IRPH clause, the bank must prove that it has met these requirements. Specifically, it must prove that the consumer was informed that the interest on the loan would be linked to the IRPH index, with an explanation of its concept and consequences.
Section 5 of the same article, for its part, determines the following:
“5. The wording of the general clauses must comply with the criteria of transparency, clarity, specificity and simplicity. The conditions incorporated in a non-transparent way in the contracts to the detriment of consumers will be null and void.”
The law prevents clauses that violate these precepts and do not pass the transparency control from being incorporated into the contract and, therefore, cannot bind the adherent. The law expressly refers to:
- to those that could not have been known by the adherent at the time of entering into the contract (art. 7 section a).
- those that are illegible, ambiguous, obscure or incomprehensible (art. 7 section b).
On the other hand, this Law prevents the nullity of the general conditions that:
- contradict what the Law establishes to the detriment of the adherent (art. 8.1).
- are unfair to the consumer (art. 8.2).
In our opinion, now supported by the criteria of the European Court of Justice, all the requirements that this Law establishes to decree the nullity of the general conditions of the contract are met, and therefore its art is applicable. 9 on the judicial declaration of nullity of the clauses of general conditions.
The first sentences of Spanish courts after the publication of the European Court sentence are declaring the invalidity of the IRPH clause and its substitution by the EURIBOR, which will mean the return by the bank of amounts paid in excess. More information about these sentences can be found in our article Nulment of the IRPH clause in mortgages.
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If you are affected, please contact us. We are a firm with more than 40 years of history, which studies each case individually. We are not a massive claim platform, our lawyers have extensive experience and we offer you the chance to get to know us personally if you wish.
It may interest you:”CJEU ruling on IRPH mortgages”
