Standard Contractual Clauses: Legal Status and Remedies

General Contractual Clauses (CGC)

CGC: "are standard clauses in a contract imposed by one party, regardless of its authorship, external appearance, size or other circumstances, and intended to be incorporated into a plurality of contracts."

Legal Status and Control System

Legal status: These are elements that make it possible to streamline contracting processes but can be negative because they may express the dominance of the offeror over the consumer. The result can be a model contract virtually immune to consumer complaints. Therefore, the law has imposed conditions that constitute a control system established by Law 26/1984 and Directive 93/13/EEC (1993).

The control system under these laws performs two types of control:

• Control of incorporation: This checks whether a general condition may form part of a contract and what degree of communication is required so that the contracting party has the potential to know, understand and accept those conditions. The wording must meet the criteria of transparency, clarity, concreteness and simplicity.
• Control of legality: This determines when a general clause is considered contrary to law. There are two outcomes: first, general conditions can be declared null when contrary to law; second, when a contract is concluded with a consumer, a special procedure applies to declare general conditions abusive and thus invalid when they have not been individually negotiated and, in violation of good faith, cause a significant imbalance in the rights and obligations of the parties to the contract.

Rules of Interpretation and Integration

Rules of interpretation and integration: There are certain rules that apply to the interpretation of general conditions. For example:

• "Where there is a conflict between general conditions and special conditions, the special conditions shall prevail, unless the general conditions are more beneficial to the contracting party who adheres to the contract."
• "Doubts in the interpretation of ambiguous CGC will be resolved in favor of the adhering party (the party that did not draft the clause)."
• "A declaration of invalidity or non-inclusion of a CGC will not necessarily determine the total ineffectiveness of the contract if the contract can survive without such clauses."

Challenging the CGC Regime

Challenging the CGC: When a CGC is declared invalid, it can affect many contracts. Therefore, to challenge a CGC one should combine individual and collective actions.

Individual actions: Each contracting party may individually seek a declaration of nullity of unfair terms that affect them.

Collective actions: Collective litigation can be pursued in three main ways:

• Injunctions: Actions seeking a judicial order requiring the defendant to remove the void clause from its CGC.
• Action of withdrawal: Actions that aim to obtain a declaration of withdrawal from the clause or its effects.
• Declaratory actions: Actions aimed at obtaining a judicial declaration that recognizes a clause as part of the CGC regime and ordering its registration or formal recognition as such.

Right of action: Partnerships, entrepreneurs, professionals, farmers, consumers, and other affected parties may bring proceedings to challenge unfair general conditions.