§3.4.5 Circumstances at the time of the conclusion of the contract

According to Article 4(1), the unfairness of a contract term, i.e. the significant imbalance against the requirements of good faith, has to be assessed taking into account the nature of the contract, other contract terms and other related contracts, as well as ‘all the circumstances attending the conclusion of the contract’. The latter aspect does not include circumstances manifesting themselves during the performance of the contract. However, the circumstances attending the conclusion of the contract must include all the circumstances which were known, or could reasonably have been known, to the seller or supplier and which could affect the future performance of the contract (245). One example for such circumstances is the risk of variations in the exchange rate inherent to contracting a loan in a foreign currency, which may materialise only during the performance of the contract. In such cases it will be for national courts to assess, in light of the knowledge and expertise of the lender, whether the consumer's exposure to the exchange rate risk is in line with the requirements of good faith, i.e. constitutes a fair and equitable practice and, gives rise to a significant imbalance within the meaning of Article 3(1) (246). Where contract terms are amended or replaced, it makes sense to take into account the circumstances prevailing at the time of the amendment or replacement when assessing the new contact terms (247). The significant imbalance has to be considered with regard to the content of a contract term and regardless of how it has been applied in practice (248). For instance, where a contract term allows a seller or supplier to demand immediate full repayment of the loan if the consumer fails to pay a certain number of monthly instalments, the unfairness has to be assessed based on the number of unpaid monthly instalments required in the contract. It cannot be based on the number of monthly instalments which the consumer had actually failed to pay before the seller or supplier invoked the relevant term (249).

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Source: EUR-Lex (Cellar) · retrieved 2026-09-07