Abusive contract terms struck down by French court in AOL Standard Form Contract

November 2005

Internet, general

In a judgment released September 15, a three-judge panel of the Versailles Court of Appeal has unanimously dismissed an appeal by SNC AOL France (AOL) from a lower court decision handed down in 2004 in favour of a French consumer protection body, Union Fédérale des Consommateurs “Que Choisir” (UFC), relating to AOL’s online subscriber contract in France (AOL Contract). In the case, UFC v AOL France, many different clauses in the standard form contract were at issue, including such fundamental provisions, for example, as those relating to AOL disclaimers of liability (including liability for content information originating from third parties and liability for failure to provide the online service contracted for) and AOL’s rights of termination (including the right of AOL to terminate the contract unilaterally). Several of the clauses in the AOL Contract were found to be abusive and unenforceable because they were contrary to French local law or, in some cases, contrary to EU-wide laws such as the Unfair Terms in Consumer Contract Directive of 1993. Under the latter legislation, courts have the power to decline to enforce provisions in consumer contracts that are seen to demonstrate a “significant imbalance” of bargaining power between the parties.

For extracts from the judgment (in French) and a link to the full text of the case, visit:http://www.juriscom.net/jpt/visu.php?ID=741

From a summary by Richard Potter QC, Editor of E-TIPS, a publication of Deeth Williams Wall LLP. To review past issues of the E-TIPS® newsletter, visit: http://www.dww.com/newsletter/archive.html

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