Opinion of the Advocate General — ECLI:EU:C:2020:61
Date: 2020-01-30
Language of the case: Spanish
Subject matter: Consumer protection;Approximation of laws
Procedure: Reference for a preliminary ruling
Origin: Spain

Summary C-452/18 — 1 
Case C-452/18 
Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged:  
11 July 2018 
Referring court:  
Juzgado de Primera Instancia e Instrucción de Teruel n.º 3 (Court of 
First Instance and Preliminary Investigation No 3, Teruel, Spain) 
Date of the decision to refer:  
26 June 2018 
Applicant:  
XZ 
Defendant:  
Ibercaja Banco, S.A. 
  
Subject matter of the main proceedings 
1. The referring court is hearing an application in which the claimant (‘XZ’) is 
seeking to have declared void, on grounds of unfairness, a term restricting changes 
in the variable interest rate that is contained in the public deed of sale and 
assumption of a mortgage loan initially granted to a developer, as stipulated in a 
deed dated 23 December 2011. The original loan was concluded between the 
developer and the credit institution Ibercaja Banco, S.A.  
Subject matter and legal basis for the request for a preliminary ruling 
2. On 15 May 20[1]8 the applicant filed a document with the referring court 
proposing that a question be referred to the Court of Justice of the European 
Union (‘the CJEU’) concerning the novation contract amending the loan dated 
4 March 2014, to ask whether the principle that void contractual terms are not 
binding must be extended to apply also to subsequent contracts and legal 
arrangements concerning such terms, such as a novation contract. In its order of 
EN 
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26 June 2018, the national court refers various questions concerning the 
interpretation of Directive 93/13/EEC on unfair terms in consumer contracts to the 
CJEU for a preliminary ruling. 
Questions referred 
(A) Must the principle that void contractual terms are not binding (Article 6 of 
Council Directive 93/13/EEC of 5 April 1993) also extend to subsequent contracts 
and legal arrangements concerning such terms, such as a novation contract? 
And, given that absolute nullity means that the said term is deemed never to have 
existed in the legal/financial life of the contract, can it be concluded that 
subsequent legal transactions and their effect on the term in question — that is, the 
novation contract — also disappear from legal reality and must be deemed non-
existent and without effect? 
(B) Can documents which amend, or make a settlement in respect of, non-
negotiated terms and may not satisfy the fairness and transparency tests be 
considered to be in the nature of general contractual terms for the purposes of 
Article 3 of Council Directive 93/13/EEC of 5 April 1993 and be subject to the 
same grounds for invalidity that apply to the original documents that are the 
subject of the novation or settlement?  
(C) Must the waiver of rights of action contained in a novation contract also be 
void, in so far as the contracts signed by customers did not inform them either of 
the fact that a contractual term was void or of the money or financial sum they 
were entitled to receive in repayment of interest paid as a result of the initial 
imposition of the ‘floor clauses’? 
It is noted that customers thus sign a waiver agreeing not to sue, without having 
been told by the bank what rights they are waiving or how much money they are 
giving up. 
(D) When the amending novation contract is examined in the light of the case-
law of the Court of Justice and Articles 3(1) and 4(2) of Directive [93/13], is the 
new floor clause included vitiated once again by a lack of transparency, as the 
bank has again failed to comply with the transparency criteria laid down in the 
[judgment of the Tribunal Supremo (Supreme Court, Spain)] of 9 May 2013 and 
failed to inform the customer of the true financial cost of the said term in his 
mortgage, which would make him aware of the interest rate (and the resulting 
amount) that he would have to pay if the new floor clause were to be applied, and 
the interest rate (and the resulting amount) that he would have to pay if no floor 
clause were applied and the interest rate agreed in the mortgage were applied with 
no lower limit? 
In other words, when the financial institution imposed the document referred to as 
a novation in respect of ‘floor clauses’, should it have satisfied the transparency 
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tests described in Articles 3(1) and 4(2) of Directive [93/13] and informed the 
consumer of the amount of money lost as a result of applying the ‘floor clauses’, 
and of the interest rate that would be applicable in the absence of those clauses, 
and, given that the bank did not do so, are those documents also vitiated by a 
ground of nullity? 
(E) In view of their content, can the terms concerning legal action included in 
the general terms and conditions of the amending novation contract be considered 
unfair under Article 3(1) [of Directive 93/13] in conjunction with the Annex 
listing unfair terms, and specifically with paragraph (q) of the Annex (terms shall 
be regarded as unfair where they exclude or hinder the consumer’s right to take 
legal action or exercise any other legal remedy), given that they restrict the right 
of consumers to exercise rights that may arise or become evident after the contract 
has been signed, as was the case with the possibility of claiming full repayment of 
the interest paid (in accordance with the judgment of the Court of Justice of 
21 December 2016)? 
Provisions of EU law referred to 
1 First, the referring court cites the power to refer a question to the CJEU for a 
preliminary ruling established in primary law (currently Article 267 TFEU). It 
also notes that the questions referred relate to the interpretation of a rule of EU 
law, specifically Council Directive 93/13/EEC of 5 April 1993 on unfair terms in 
consumer contracts, in the light of the criteria laid down by the CJEU.  
2 The system of protection established by Directive 93/13 is based on the idea that 
the consumer is in a weak position vis-à-vis the seller or supplier, as regards both 
his bargaining power and his level of knowledge. This means that he has to accept 
terms that have been pre-formulated by a seller or supplier, and is unable to 
influence the substance of those terms. 
3 Article 3 of Directive 93/13 stipulates that a contractual term which has not been 
individually negotiated is to be regarded as unfair if, contrary to the requirement 
of good faith, it causes a significant imbalance in the parties’ rights and 
obligations arising under the contract, to the detriment of the consumer. 
4 Article 3(2) of Directive 93/13/EEC goes on to define the concept of unfair term, 
and provides that a term shall always be regarded as not individually negotiated 
where it has been drafted in advance and the consumer has therefore not been able 
to influence the substance of the term, particularly in the context of a pre-
formulated standard contract. The fact that certain aspects of a term or one 
specific term have been individually negotiated shall not exclude the application 
of Article 3 to the rest of a contract if an overall assessment of the contract 
indicates that it is nevertheless a pre-formulated standard contract. Where any 
seller or supplier claims that a standard term has been individually negotiated, the 
burden of proof in this respect shall be incumbent on him. Article 3 of Directive 
93/13, which refers to the concepts of good faith and significant imbalance in the 
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parties’ rights and obligation, defines the elements that render a term unfair in 
purely abstract terms. 
5 The Annex to the Directive, referred to in Article 3(3), gives various specific 
examples of unfair terms. However, according to Article 3(3), the list in the 
Annex provides only an indication of the type of terms which may be regarded as 
unfair, and is not exhaustive. Therefore, the fact that a term is listed in the Annex 
does not of itself automatically mean that it is unfair; however, the fact that a term 
is listed is a key factor that can be used by the courts in assessing whether it is 
unfair. 
6 Article 4(1) of the Directive also provides that the unfairness of a contractual term 
shall be assessed, taking into account the nature of the goods or services for which 
the contract was concluded and by referring, at the time of conclusion of the 
contract, to all the circumstances attending the conclusion of the contract and to 
all the other terms of the contract or of another contract on which it is dependent. 
7 According to settled case-law of the CJEU, cited below, it is for the national court 
to determine whether a contractual term satisfies the criteria in order to be 
regarded as unfair within the meaning of Article 3(1) of Directive 93/13. Only the 
national court can make a full assessment of the consequences which the term in 
question may have in the context of the law applicable to the contract, which 
entails an examination of national law. 
8 Article 6(1) of the Directive imposes on Member States the rule that unfair terms 
used in a contract concluded with a consumer by a seller or supplier shall, as 
provided for under their national law, not be binding on the consumer and that the 
contract shall continue to bind the parties upon those terms if it is capable of 
continuing in existence without the unfair terms. 
9 Article 7(1) and (2) of Directive 93/13 sets out the above obligation in the 
following terms: 
10 ‘1. Member States shall ensure that, in the interests of consumers and of 
competitors, adequate and effective means exist to prevent the continued use of 
unfair terms in contracts concluded with consumers by sellers or suppliers. 
11 2. The means referred to in paragraph 1 shall include provisions whereby 
persons or organizations, having a legitimate interest under national law in 
protecting consumers, may take action according to the national law concerned 
before the courts or before competent administrative bodies for a decision as to 
whether contractual terms drawn up for general use are unfair, so that they can 
apply appropriate and effective means to prevent the continued use of such terms.’ 
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Provisions of national law referred to  
12 In Spanish law, consumer protection is currently enshrined in Royal Legislative 
Decree 1/2007 of 16 November 2007 approving the consolidated text of the Ley 
General para la Defensa de los Consumidores y Usuarios y otras leyes 
complementarias (General Law for the protection of consumers and users and 
other supplementary laws), which retains the rules that had previously been 
adapted to reflect Directive 93/13.  
13 Article 83 of Royal Legislative Decree 1/2007 is as follows: 
14 ‘1. Unfair contractual terms shall automatically be void and deemed not to 
have formed part of the contract. 
15 2. That part of the contract deemed void shall be made good in accordance 
with the provisions of Article 1258 of the Civil Code and the principle of 
objective good faith. 
16 For these purposes, the court which rules that such terms are void shall remedy the 
contract and have moderating powers with regard to the rights and obligations of 
the parties, where the contract continues in existence, and to the consequences of 
its being ruled ineffective in the event of significant loss or damage to the 
consumer or user. 
17 Only where the remaining contract terms result in an imbalance in the respective 
positions of the parties which cannot be remedied may the court rule that the 
contract is ineffective.’ 
18 Article 1258 of the Código Civil (Civil Code) stipulates that: 
19 ‘Contracts are concluded by mere consent and from that point are binding, not 
only as regards what has expressly been agreed therein, but also as regards all the 
consequences which, depending on their nature, are in accordance with good faith, 
usage and the law.’ 
20 Article 1208 of the Civil Code stipulates that: 
21 ‘A novation shall be void if the original obligation was also void, unless the 
ground for nullity may be invoked only by the debtor, or acts that are originally 
void are validated by ratification.’ 
22 Article 1809 of the Civil Code stipulates that: 
23 ‘A settlement is a contract whereby each party gives, promises or withholds 
something, thereby avoiding the commencement of legal action or putting an end 
to an existing action.’ 
24 Article 1816 of the Civil Code stipulates that: 
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25 ‘For the parties, a settlement has the force of res judicata; but enforcement 
proceedings shall not be taken except in the event of enforcement of a court 
settlement.’ 
26 Article 1303 of the Civil Code stipulates that: 
27 ‘When an obligation has been declared void, the contracting parties must restore 
to one another those things that formed the subject matter of the contract, together 
with the profits derived therefrom, and the price together with interest, subject to 
the provision made in the following articles.’ 
Brief summary of the facts and the procedure in the main proceedings 
28 On 23 July 2010, the developer Obras y Excavaciones Collados, S.L. signed a 
deed with the bank Caja de Ahorros de la Inmaculada de Aragón (now Ibercaja 
Banco) for creation of an easement, declaration of a new building under 
construction, novation, increase in loan and division into individual units for 
multiple ownership. The deed included an interest rate clause (Euribor plus one 
percentage point) entitled ‘Maximum and minimum interest rate’, which set the 
maximum annual interest rate at 9.75% and the minimum annual interest rate at 
3.25%. 
29 On 23 December 2011, the aforementioned developer signed a deed of sale and 
assumption of a mortgage loan with the applicant, XZ, under which the property 
described therein was subject to a mortgage with the bank Caja de Ahorros de la 
Inmaculada de Aragón (now Ibercaja Banco). In the contract, it was agreed that 
the applicant in these proceedings, XZ, was to be subrogated to the terms and 
conditions, which she declared herself to be aware of and expressly accepted, and 
XZ assumed the personal obligation secured by the mortgage and acquired the 
legal status of debtor.  
30 On 4 March 2014, the bank Banca Grupo Cajatres (now Ibercaja Banco) 
concluded a novation agreement amending the loan with XZ, under which both 
parties expressly and mutually undertook not to bring any action against the other 
in respect of the formulation and content of the agreement. They also declared that 
the document constituted a novation to which the Ley 2/1994 sobre subrogación y 
modificación de préstamos hipotecarios (Law 2/1994 on the assumption and 
amendment of mortgage loans) of 30 March 1994 applied. Lastly, the borrower 
made and signed a handwritten statement confirming that she was aware and 
understood that the interest rate on her loan would never fall below an annual 
nominal rate of 2.35%. 
Essential arguments of the parties in the main proceedings 
31 The applicant (‘XZ’) is claiming repayment of the amounts overpaid as a result of 
the application of the disputed clause. The defendant, Ibercaja Banco, disputes the 
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claim, arguing that the customer was given sufficient information beforehand to 
enable her to know the details of the contract and the disputed clause. It further 
stated that there was a novation contract dated 4 March 2014 amending the loan. It 
also objects to repayment of the sums received by the bank under the clause in 
question from the date on which the mortgage was entered into. 
Brief summary of the grounds for the request for a preliminary ruling 
32 In order to ensure that Directive 93/13 provides the protection it is intended to 
offer, the CJEU has noted on several occasions that the imbalance between the 
consumer and the seller or supplier can be redressed only by a positive 
intervention by someone other than the parties to the contract. In the light of these 
principles, which are examined below, the Court of Justice has ruled that the 
national court is bound to assess, if necessary of its own motion, whether a 
contractual term falling within the scope of Directive 93/13 is unfair, 
compensating in this way for the imbalance which exists between the consumer 
and the seller or suppler. 
33 With regard to the novation agreement addressed in the main proceedings, the 
referring court’s initial assessment is as follows:  
34 (a) There appear to be two contracts, the original contract and the subsequent 
novation, which may contain terms which, under the case-law of the Spanish 
Supreme Court, become inapplicable once the courts have deemed them to be 
unfair. This means that such terms cannot be rendered valid by the fact that the 
right to take legal action has been waived by means of an exclusion unilaterally 
proposed by the credit institution. 
35 (b) Such a waiver or settlement may be contrary to Royal Legislative Decree 
1/2007, referred to in paragraph [12]. Article 8 of the Decree provides that any 
prior waiver of the rights accorded to consumers and users by the legislation is 
void, and any acts done in fraudulent circumvention of the law are also void under 
Article 6 of the Civil Code.  
36 (c) In the opinion of the referring court, the waiver or settlement cannot be 
used to prevent legal proceedings, because this would be seriously prejudicial to 
the consumer. In its view, it can be seen from the novation agreement amending 
the loan that the customer had no scope to negotiate and was not given a copy of 
the agreement to examine in advance. Moreover, the statement in which the 
customer declares that he is aware of the interest rate on the loan and understands 
that it will never fall below a certain annual percentage rate is to be found in 
virtually all the Ibercaja Banco novation agreements, since it is drafted unilaterally 
by a bank employee and the customer copies it out by hand and then signs it. In 
the view of the referring court, this sort of action is taken because the afore-
mentioned novation is the only way in which the customer is able to obtain lower 
monthly mortgage payments, given that the bank still refuses to contemplate the 
option of removing the ‘floor clause’, in spite of the fact that it is no longer 
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included in, and has been deleted from, new mortgage loan agreements concluded 
with the bank. In short, in this novation agreement the bank fails to acknowledge 
that the floor clause is unfair, and the customer is denied the possibility of 
asserting his rights.  
37 (d) The contract does not provide any information on the economic 
consequences of the application of the ‘floor clause’, nor does it say how much 
the mortgage payments would be if the restriction did not apply: therefore it is not 
possible to talk of duly formed intention or valid consent in accordance with 
Article 1817 of the Civil Code. Bearing in mind that this document was proposed 
and preformulated by the credit institution, and that it was the credit institution 
which contacted the customer, the referring court considers that this is a case of a 
banking practice intended to limit the bank’s pecuniary liability with regard to 
mortgage agreements that include the ‘floor clause’.  
38 (e) Under the ‘floor clause’, the loan rate could only be revised upwards, to 
such an extent that the actual interest rate charged to the customer was always 
higher than the interbank reference rate plus the applicable differential. 
Conversely, the credit institution has not shown that it has ever granted the 
customer any concession, for example, by subsequently relaxing the restriction on 
changes in the interest rate (the floor clause) in order to reimburse sums paid. 
39 (f) In its judgment of 9 May 2013, the Supreme Court held that ‘floor clauses’ 
were void where they failed to satisfy a series of requirements or premisses. Since 
then, Ibercaja Banco has altered its contractual practices to reflect the position in 
this case-law. However, the referring court notes that the novation contract is not 
in the nature of a settlement, because there was no legal dispute between the 
parties: given the circumstances in which it was concluded, its status is rather that 
of a pre-formulated standard contract. 
40 The referring court considers it important to underline that the bank’s failure to 
comply with the principles of transparency and clarity was so great that, in the 
amending novation agreement, it imposed a minimum payment on the customer 
when the Euribor rate (the reference index) plus the differential was less than the 
agreed minimum rate. In other words, in the novation agreement the bank made 
the customer sign up to a minimum interest rate that was higher than the Euribor 
rate plus the differential applicable at the time the agreement was signed, meaning 
that the ‘floor clause’ automatically applied because the loan rate could only vary 
upwards. 
41 Given the Spanish system of sources of law and the fact that it forms part of EU 
law, consumer protection must inform judicial practice, reflecting the fact that the 
case-law of the CJEU is binding on national courts. Therefore, judicial scrutiny, 
undertaken of the courts’ own motion, starts at the point when the application is 
examined, in accordance with the case-law established by the CJEU judgment of 
26 October 2006, Mostaza Claro (C-168/05), as applied in conjunction with the 
principles set out in the judgments of 27 June 2000, Océano Grupo Editorial and 
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Salvat Editores (C-240/98 to C-244/98), and of 21 November 2002, Cofidis 
(C-473/00), and especially in the judgment of 4 June 2009, Pannon (C-243/08). In 
this latter judgment, in a general pronouncement on unfair contract terms that was 
not restricted to questions of jurisdiction, the Court held that ‘the national court is 
required to examine, of its own motion, the unfairness of a contractual term where 
it has available to it the legal and factual elements necessary for that task’. For its 
part, the judgment of 6 October 2009, Asturcom (C-40/08) holds that where the 
court has available to it the legal and factual elements necessary for that task, it 
may examine the issue of its own motion in the absence of the consumer, even 
where the consumer is in default. This position is summarised clearly in the 
judgment of 14 June 2012 in Case C-618/10, Banco Español de Crédito, with 
particular regard to the examination, of a court’s own motion, in limine litis and at 
any stage of proceedings, of the invalidity of terms concerning interest on late 
payments on grounds of unfairness, in the context of an order for payment 
procedure.  
42 According to the case-law of the CJEU, therefore, the court must undertake a 
review of its own motion where it has the legal and factual elements necessary for 
the task, as is the case here; and, if the review is to be performed and to have any 
meaning, it must logically be based on the principle of effectiveness as set out in 
paragraph 28 of the CJEU judgment of 26 October 2006 cited above.  
43 In its judgment of 14 June 2012 in Case C-618/10, Banco Español de Crédito, the 
CJEU establishes case-law which is clear and binding on the national court and 
which applies to any type of proceedings, such as the present case. As it notes in 
paragraph 43 of the judgment, ‘the role attributed to the national court by 
European Union law in this area is not limited to a mere power to rule on the 
possible unfairness of a contractual term, but also consists of the obligation to 
examine that issue of its own motion, where it has available to it the legal and 
factual elements necessary for that task’. Moreover, in its judgment of 4 June 
2009 concerning a reference for a preliminary ruling, (Pannon, C-243/08), the 
CJEU not only permits but requires the court to examine unfairness of its own 
motion. The court hearing the case must therefore ensure the effectiveness of the 
protection intended by the Directive. Such action of its own motion is appropriate 
even at the point when the court is assessing its own territorial jurisdiction. 
44 In the judgment of 27 June 2000 in Joined Cases C-240/98, C-241/98, C-242/98, 
C-243/98 and C-244/98, Océano Grupo Editorial, the CJEU held that a court is 
able to examine the matter of its own motion even where there has been no 
complaint. In that judgment, the CJEU reasons that the aim of Article 6 of the 
Directive, which requires Member States to lay down that unfair terms are not 
binding on the consumer, would not be achieved if the consumer were himself 
obliged to raise the unfair nature of such terms. The court’s power to determine of 
its own motion whether a term is unfair must be regarded as constituting a proper 
means both of achieving the result sought by Article 6 of the Directive, namely, 
preventing an individual consumer from being bound by an unfair term, and of 
contributing to achieving the aim of Article 7, since if the court undertakes such 
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an examination, that may act as a deterrent and contribute to preventing unfair 
terms in contracts concluded between consumers and sellers or suppliers.  
45 In the judgment of 21 February 2013, Banif Plus Bank (C-472/11), the CJEU 
holds that Articles 6(1) and 7(1) of Directive 93/13 must be interpreted as 
meaning that a national court which has found of its own motion that a contractual 
term is unfair is not obliged, in order to be able to act upon that finding, to wait for 
the consumer, who has been informed of his rights, to submit a statement 
requesting that that term be declared invalid. However, the principle of audi 
alteram partem, as a general rule, requires the national court which has found of 
its own motion that a contractual term is unfair to inform the parties to the dispute 
of that fact and to invite each of them to set out its views on that matter, with the 
opportunity to challenge the views of the other party, in accordance with the 
formal requirements laid down in that regard by the national rules of procedure. 
46 The judgment of the CJEU of 14 March 2013 (Aziz, C-415/11) notes that the 
system of protection introduced by Directive 93/13 is based on the idea that the 
consumer is in a weak position vis-à-vis the seller or supplier, as regards both his 
bargaining power and his level of knowledge. As regards that weaker position, 
Article 6(1) of the Directive provides that unfair terms are not binding on the 
consumer. As is apparent from the case-law, that is a mandatory provision which 
aims to replace the formal balance which the contract establishes between the 
rights and obligations of the parties with an effective balance which re-establishes 
equality between them. The judgment also reiterates the case-law of the CJEU 
regarding the assessment by the court of its own motion as to whether a 
contractual term is unfair, in order to compensate for the imbalance which exists 
between the consumer and the seller or supplier. The same judgment rules that the 
concept of ‘significant imbalance’ to the detriment of the consumer must be 
assessed in the light of an analysis of the rules of national law applicable in the 
absence of any agreement between the parties, in order to determine whether, and 
if so to what extent, the contract places the consumer in a less favourable legal 
situation 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. 
47 Turning to more recent case-law, the judgment of 30 May 2013 (Asbeek Brusse 
and de Man Garabito, C-488/11) follows in the line of previous case-law. The 
CJEU has stated that, where the national court considers a contractual term to be 
unfair, it must not apply it, except where the consumer opposes that non-
application. Moreover, the Court has inferred from that wording of Article 6(1) 
that national courts are required to exclude the application of an unfair contractual 
term in order that it does not produce binding effects with regard to the consumer, 
without being authorised to revise the content of that term. That contract must 
continue in existence, in principle, without any amendment other than that 
resulting from the deletion of the unfair terms, in so far as, in accordance with the 
rules of domestic law, such continuity of the contract is legally possible. The 
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CJEU has also observed that that interpretation is, moreover, borne out by the 
objective and overall scheme of the Directive. In this connection, it has pointed 
out that, given the nature and significance of the public interest which constitutes 
the basis of the protection guaranteed to consumers, the Directive requires 
Member States, as is apparent from Article 7(1) thereof, to provide for adequate 
and effective means ‘to prevent the continued use of unfair terms in contracts 
concluded with consumers by sellers or suppliers’. If it were open to the national 
court to revise the content of unfair terms included in such contracts, such a power 
would be liable to compromise attainment of the long-term objective of Article 7 
of the Directive, since it would weaken the dissuasive effect on sellers or suppliers 
of the straightforward non-application of those unfair terms with regard to the 
consumer. It can be inferred from this that Article 6(1) of the Directive cannot be 
interpreted as allowing the national court, where it has established that a penalty 
clause in a contract concluded between a seller or supplier and a consumer is 
unfair, to reduce the amount of the penalty imposed on the consumer instead of 
excluding the application of that clause in its entirety with regard to the consumer. 
Article 6(1) of the Directive must be interpreted as meaning that it does not allow 
the national court, in the case where it has established that a penalty clause in a 
contract concluded between a seller or supplier and a consumer is unfair, merely, 
as it is authorised by national law, to reduce the amount of the penalty imposed on 
the consumer by that clause, but requires it to exclude the application of that 
clause in its entirety with regard to the consumer.