Key facts of the case:
The Complainant’s predecessor and the defendant had concluded a contract on connection in compliance with Article 43 of the Law No. 610/2003 on electronic communications, which bound the Defendant to pay for the activation and provision of services (i.e. telephone charges and fixed monthly fees). When the Defendant was in arrears with payments, the Complainant asked the district court to order the Defendant to pay due payments along with a stipulated damage. The district court found that the stipulated damage clause in the consumer contract concluded between the Complainant’s predecessor and the Defendant was objectively capable of harming the latter, which is why it refused to award it to the former. The court decided on unacceptability of the contractual clause on grounds that the Complainant’s predecessor offered its services to consumers in the form of standardized contracts that had been drafted in advance and therefore did not give consumers any chance to influence their terms; the same applied to the stipulated damage clause, which bound the consumers to pay the stipulated damage in the full amount regardless of what time period of the contract had elapsed.
According to Art. 98 [This is a formal mistake as the court cites Article 98 of the Charter whereas in fact it refers to Article 38 thereof] of the EU Charter of Fundamental Rights, all EU member states have to ensure a high level of consumer protection. Therefore, it is important to use all effective means of consumer protection in order to increase consumer confidence in the market and not to burden consumers by inadequate arrangements. The disputed liquidated damages causes not only obvious imbalance in the rights and obligations to the detriment of the weaker contracting party, but has also a tendency to affect consumer confidence towards a standardized product.