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Key facts of the case: 

The plaintiff signed a loan contract with the legal predecessor of the respondent (a financial institution) to purchase a car. In the individual loan contract, they first agreed on the basic terms (currency, full credit charge ratio, the amount of the monthly payments, their number and spreading). The fluctuation of the interest rate and the currency was to be accounted for on the basis of fixed foreign currency. Second, it was agreed that in questions not regulated in the loan contract, the general terms and conditions are to be consulted. Both parties consented to the contract. When signing the contract to guarantee the repayment of the loan a purchase option for the car purchased from the loan was attached to the contract. Due to the disagreement on the exchange rate applied by the respondent, the plaintiff requested the first instance court to declare the loan contract null and void: he argued that they failed to agree on its substantial elements, e. the payable amount in foreign and Hungarian currency. He argued that the contract did not comply with the requirements set in Act no. CXII of 1996 on credit institutions and financial enterprises (1996. évi CXII. törvény a hitelintézetekről és a pénzügyi vállalkozásokról) in force at the time and for this reason the provisions of Act no. IV of 1959 on the Civil Code (1959. évi IV. törvény a Polgári Törvénykönyvről) had to be relied on when assessing the contract’s validity and its consequences.

Outcome of the case: 

The first instance court did not find the contract null and void and rejected the claim. The plaintiff in his appeal added further claims that were – to some extent at least – addressed by the Szeged Regional Court of Appeal. The court found that the contract was valid, the parties did agree on the most essential and substantive elements of the contract and in the present case the full amount payable and the periodic repayments did not have to be set in both currencies and it was not considered to be the contract’s essential element. On the plaintiff’s initiative the court examined whether Directive 2008/48/EC of the European Parliament and of the Council of 23 April 2008 on credit agreements for consumers and repealing Council Directive 87/102/EEC and Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts, prescribes the court to ex officio assess the validity of a contractual term if that is not objected to by any of the parties in the procedure. The court emphasised that on the basis of EU law, courts have to exceptionally address the contractual terms not challenged by the parties only when it is necessary to take a decision on the claims raised during the trial, and the uniformity decisions in the field do not deal with the primary issue raised by the plaintiff and do not change the conclusion of the court. The contract was not found to be null and void, but the court defined the interest rate on the basis of which the overall amount of the loan was to be calculated and found that the call option had to be considered no longer applicable (it is unclear from the facts of the case, but it may be reasonably assumed, that the plaintiff fulfilled his payment obligation on the basis of the interest rate set by the court).