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Contractual penalties for unreturned modems are unconstitutional says Constitutional Court

23/08/2013

Is your electronic communications provider demanding payment of a contractual penalty from you for not returning a modem? At the end of the year, the Constitutional Court decided that under certain conditions, this approach is unconstitutional.


According to the Constitutional Court, contractual penalty arrangements cannot in principle be part of general business terms and conditions. A service provider can arrange a contractual penalty with you, but only directly in a contract on which you place your signature; otherwise it has to clearly prove that you have been acquainted with this obligation. A reference to general terms and conditions somewhere on a website is not considered such proof. In the opposite case, it is at variance with the principle of consumer protection for the provider to demand payment of a contractual penalty from you. The conclusions of the Constitutional Court naturally have a broader impact and pertain not only to providers of electronic communication services and their general business terms and conditions. For more information, we recommend reading the respective ruling of the Constitution Court, File No. I.ÚS 3512/11 of 11 November 2013.