Abusive clauses in consumer contracts.

On July 23, 2003 the Undersecretary of Antitrust and Consumer Protection issued Provision No 3/2003 (the “Provision”). This Provision amends the provisions of Resolution No 53/2003 of the former Secretary of Antitrust, Deregulation and Consumer Protection relating to abusive clauses in consumer contracts (see article “Abusive clauses in consumer contracts”, published in Marval News # 17 of May 30, 2003).

The Provision extends to sixty calendar days, as from the date of its publication in the Official Gazette, the term set forth in Resolution No 53/2003 to remove abusive clauses from contracts, and to notify such removal to the consumers with contracts in force.

The Provision adds a paragraph to the text of Resolution No 53/2003, which clarifies that in those cases where there are other general and/or special rules setting forth contractual conditions more favorable to the consumer, such more favorable conditions will prevail.

Furthermore, the Provision amends sub-sections b); c); d); e), paragraph (ii); f); g) y h) of the Schedule to Resolution No 53/2003, the amended text of which sets forth that abusive clauses are those clauses that:

a)   grant to the supplier the exclusive right of interpreting the meaning, extent and performance of contractual clauses and the corresponding obligations;

b)   grant to the supplier the power to unilaterally amend the contract;

c)   authorize the supplier to terminate the contract without cause, without a breach of the contract by the consumer;

d)   condition the coming into effect of the contract to a unilateral act by the supplier, when consumers have already expressed that they would accept the offer provided;

e)   impose any limitation on consumers to file legal actions or defenses, or in any way condition the exercise of their rights, in particular when:

(i)   they provide that legal actions may be filed in a jurisdiction other than that corresponding to the consumer’s address upon executing the agreement, except when they provide that actions shall be filed in the jurisdiction of the consumer’s place of residence at the moment same is brought;

(ii) they limit the means of proof, or impose the burden of the proof on the consumer;

(iii) they limit the power to raise defenses, recusations and other petitions;

f)   set forth that when the consumer is in arrears under the obligations provided for in the contract, the supplier may set off the amount owed against any other amount the consumer may have paid to the supplier under any other agreement or in connection with the provision of any other product or service, except when the set off is provided by law, in which case the supplier shall inform that to the consumer in the contract;

g)   exclude or limit the supplier’s liability for any damages caused to the consumer by the product acquired or the service rendered and/or in connection with any other legally enforceable recovery or reimbursement;

h)   condition the exercise of the consumer’s power to terminate the contract upon the prior cancellation of the sums owed to the supplier;

i) empower the supplier to provide other products and services not included in the contract, without the consumer’s prior express acceptance and/or imposing on the consumer the obligation to express non acceptance thereof within a certain period of time;

j)   impose on the consumer a representative or attorney in fact to represent the consumer in the exercise of the rights arising from the contract, the accessory agreements thereof and other legal transactions;

k) infringe environmental protection regulations or allow the violation thereof.

The amendments introduced by the Provision eliminate certain exceptions set forth by Resolution No 53/2003 for a certain type of clauses considered abusive. Therefore, the criteria to determine whether or not a clause is abusive are now broader and cover a larger number of clauses.

On the other hand, this amendment implies, in some cases, that those suppliers that have removed from their contracts the clauses considered abusive by Resolution No 53/2003 and notified such removal to the corresponding consumers must now introduce new amendments to their contracts and once again give notice thereof to their clients, or else they will be subject to the penalties set forth in Section 47 of the Consumer Protection Law No 24,240.