Signing a consumer contract, whether it's a general terms and conditions of sale on the internet, a service contract or a loan, involves the parties in a legal relationship where the balance of power is not always in place. Because of their position and experience, professionals often have the leeway to draft clauses that may be particularly unfavourable to their customers. To counter this asymmetry, French law, under European impetus, has introduced a powerful protection mechanism: the fight against unfair terms. At the heart of this system is what is known as the significant imbalanceThis is a central concept in contract law. The aim of this article is to set out the rules governing this fundamental protection for consumers and non-professionals.
Scope of protection against unfair terms
For a contract to be subject to control of unfair terms, it must bring together parties of different qualities. The system is based on the professional-consumer duo, to which French law adds the figure of the non-professional.
A professional is defined in functional terms. Regardless of their legal status, public or private, they are any natural or legal person acting in the course of their commercial, industrial, craft, liberal or even agricultural activity. Jurisprudence takes a broad view of this concept: a public institution carrying out a mission of general interest, such as a university, may be considered a professional if it offers services which, even if incidental, are similar to an economic activity, such as a student loan.
Opposite him is the consumer, who must be a natural person acting for purposes outside his trade, business or profession. The purpose of the act is decisive. A lawyer who takes out a loan for his personal needs is a consumer, but he will not be a consumer if he takes out the loan for the needs of his law firm. French law extends this protection to non-professionals, defined as any legal entity that is not acting for professional purposes. This category typically includes associations, social and economic committees (CSE) or co-owners' associations. Although structured, these entities are in a situation of contractual vulnerability similar to that of a private individual.
The protection applies to a wide range of contracts, whatever the economic sector, with the notable exception of employment contracts or those relating to family law. Furthermore, the fact that a clause stems from a regulatory text or has been the subject of individual negotiation is irrelevant in French law for the application of the consumer regime, which distinguishes it from the strict European framework that focuses on non-negotiated clauses.
Criteria for classifying unfair terms
Identifying an unfair term is based on a central criterion, the "significant imbalance", the contours of which have been defined by the Court of Justice of the European Union (CJEU). The assessment is not limited to a simple economic disadvantage. It is assessed on the basis of a set of indicators based on good faith, transparency and the overall balance of the contract.
One of the main tests consists of comparing the consumer's legal situation with that which would result from the application of ordinary law. In concrete terms, the judge examines whether the clause places the consumer in a less favourable position than the law would provide by default, in the absence of a specific clause. A clause that reverses the burden of proof or unduly limits the consumer's right to compensation in relation to the suppletive rules of the Civil Code would be a clear example of imbalance.
This analysis must be contextualised. The judge must take into account the nature of the goods or services concerned, the circumstances surrounding the conclusion of the contract and all the other clauses. An obligation that might appear unbalanced taken in isolation may find a counterpart or justification in another part of the contract. The assessment is therefore global and not piecemeal.
In principle, the court's review does not concern the main purpose of the contract or whether the price is appropriate for the service provided. It does not have to rule on whether the price is "fair". However, this exclusion does not apply if the clause defining the subject matter or the price is not drafted in a clear and comprehensible manner. This enhanced transparency control is a formidable weapon. The professional must provide full information enabling the consumer to assess the economic consequences of his commitment, including the risks. A loan clause in a foreign currency, for example, even if it defines an essential service, may be deemed unfair if the exchange rate risk has not been transparently explained to the consumer.
Binding categorisations: the black and grey lists of unfair terms
To make it easier to detect unfair terms and enhance legal certainty, the regulatory authority has drawn up two lists of terms in the Consumer Code. These lists create presumptions of unfairness, considerably lightening the burden of proof for consumers.
The "black list", defined in article R. 212-1 of the Consumer Code, lists terms that are irrevocably presumed to be unfair. This means that the professional cannot provide any evidence to the contrary: if a clause in his contract corresponds to one of those listed, it is automatically considered unfair and deemed unwritten. Examples include a clause that has the effect of eliminating or reducing the consumer's right to compensation in the event of a breach by the trader, or one that grants the trader the right to unilaterally modify the essential characteristics of the product to be delivered or the service to be provided.
The "grey list", set out in article R. 212-2, groups together terms that are presumed to be unfair in a simple way. Here, the presumption can be rebutted. The professional can demonstrate that the clause, despite its wording, does not create a significant imbalance in the particular context of the contract. This list includes, for example, a clause that imposes a manifestly disproportionate amount of compensation on the consumer in the event of non-performance of his obligations, or a clause that hinders the consumer from taking legal action. The presence of a clause in this list constitutes a serious warning for the professional, who will have to be able to justify its retention.
Non-binding categorisations: recommendations from the Commission des clauses abusives (CCA)
In addition to the regulatory lists, another player plays an important role in the fight against unfair terms: the Commission des clauses abusives (CCA). This body, made up of judges, legal experts, consumer representatives and professionals, is tasked with examining the contract models usually offered and making recommendations.
The legal value of these recommendations is purely consultative. They are not binding on either professionals or judges. A court is not obliged to follow the CCA's advice. However, in practice, their influence is considerable. They are a valuable source of interpretation and a guide for professionals concerned about the compliance of their contracts. Judges frequently refer to them to justify their decisions, recognising the expertise and legitimacy of the Commission.
The CCA's work enables it to analyse specific sectors not covered by the decrees (removal contracts, self-service scooter hire, social networks, etc.). It offers a detailed and up-to-date analysis of new contractual practices. The Commission has also developed an approach that considers that the inclusion of an unlawful clause, i.e. one that contravenes a mandatory legal provision, in itself creates a significant imbalance to the detriment of the consumer, placing him or her in an unfavourable legal situation.
Civil and administrative penalties for significant imbalance
When a clause is recognised as unfair, the law provides for an arsenal of sanctions to paralyse its effects and dissuade professionals from using it.
The main civil penalty is "deemed unwritten". The clause is simply deleted from the contract, as if it had never existed. The rest of the contract remains in force, provided it can survive without the clause in question. This sanction has two major advantages for the consumer: it can be raised at any time, as the action is not subject to any statute of limitations, and the judge is obliged to raise it of his own motion if he has the necessary evidence, even if the consumer has not raised it.
Approved consumer associations and the Directorate-General for Competition, Consumer Affairs and Fraud Control (DGCCRF) can take action for injunctions. The aim of these collective actions is to have a judge order the removal of an unfair term from all of a professional's model contracts, including those already concluded and in the process of being performed. This decision has an "erga omnes" effect, meaning that it benefits all the customers concerned. The judge may also award damages to compensate for the harm caused to the collective interest of consumers.
Finally, the system is supplemented by financial penalties. A civil fine may be imposed on a professional who persists in using a clause that has already been deemed unfair by a final court ruling. On an administrative level, the DGCCRF can impose an administrative fine on a professional who includes a "black list" clause in his contracts.
Legal intelligence and compliance: the importance of anticipation
Consumer law is a living field, constantly shaped by national and European case law. The criteria for assessing significant imbalance are evolving, and a clause deemed valid yesterday could be considered unfair tomorrow. It is therefore essential for all professionals, whether they are VSEs, SMEs or large groups, not to regard their general terms and conditions and standard contracts as fixed documents.
A regular audit of contractual documents is the best way to prevent disputes. This proactive approach enables risky clauses to be identified, reworded or deleted before they cause litigation. Working with a lawyer not only ensures that your contracts comply with the latest developments, but also helps you strike the right balance between protecting your interests and respecting your customers' rights. This vigilance is all the more necessary given that the concept of significant imbalance permeates other areas of law, in particular the commercial relations between companies or the common law on membership contractseach with its own rules.
To secure your contractual documents and defend yourself in the event of a dispute, the assistance of a law firm specialising in commercial law is a major asset. Our team can analyse your contracts, advise you on the necessary adjustments and represent you effectively.
Sources
- French Consumer Code, in particular articles L. 212-1 et seq. and R. 212-1 et seq.
- Civil Code, in particular article 1171.
- Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.
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