Where a consumer contract is declared void on the grounds of unfair terms, both the consumer and the trader may seek restitution of everything they have provided to one another under that contract. In a judgment of 2 July 2026, the Court of Justice[1] considered the starting point of the limitation period for such a claim for restitution by the trader. According to the Court, the Unfair Terms Directive[2] does not preclude national legislation under which that period only begins to run on the date on which the consumer first contests being bound by the terms in question.
Background
The dispute originated in Poland, where a number of consumers succeeded in having two mortgage loan agreements declared null and void on the grounds that they contained unfair terms. As a result of that declaration of nullity, the consumers were reimbursed all sums they had paid in performance of the agreement, plus default interest. The banks, in turn, brought a counterclaim several years later (whilst the proceedings were ongoing) for repayment of the capital they had lent. The consumers argued that this counterclaim was time-barred. However, the Polish court had doubts as to the date on which the limitation period for the bank's claim began to run and referred the matter to the Court of Justice for a preliminary ruling. According to the Polish court, there were three possible starting points: (1) the date on which the capital was made available to the consumer, (2) the date on which similar terms were entered in the Polish register of unfair terms, or (3) the date on which the consumer first contested the validity of the contract.
Ruling of the Court of Justice
The Court first confirmed that where a contract is declared void on the grounds of unfair terms, both parties must be restored to the position they would have been in had the unfair term not been included. For the consumer, this means that they must also repay the benefits granted by the seller (the bank) on the basis of that term. The bank may therefore recover the principal amount lent, together with any default interest, but is not entitled to any additional compensation. This mutual obligation to restore the parties to their original position follows from the principle of proportionality and prevents the consumer from being favoured at the bank's expense.
As regards the limitation period, the Court stated that this is not regulated at EU level and is therefore a matter for national law. However, account must be taken of the principle of proportionality, the prohibition of unjust enrichment and the principle of equality of arms. For these reasons, the Court ruled out two of the three starting points mentioned by the Polish court:
- The date on which the capital was made available to the consumer is not appropriate: as long as the consumer does not contest the validity of the contract, the seller has no claim. After all, the consumer may also choose to uphold the contract and not rely on the unfair nature of a term. If the limitation period were to commence before the consumer had made that choice, the bank's claim could become time-barred before it knew it had one.
- Nor is the date of entry in a register of unfair terms suitable: such an entry does not automatically result in the contract being declared void, as this must be ordered by a court on the basis of the consumer's wishes.
The date on which the consumer first challenged the binding effect of the contract – the third approach taken by the Polish court – is, according to the Court, an acceptable starting point. From that moment onwards, the seller is aware that the consumer wishes to invoke the invalidity of the contract and can foresee the possible consequences – which serves the principle of legal certainty. The Court clarified in this regard that a challenge does not necessarily entail legal proceedings: a complaint or formal notice to the seller is sufficient.
Relevance
Although this judgment relates to mortgage loan agreements, the principles set out by the Court may be relevant to all situations in which a contract is declared void on the grounds of unfair terms. Businesses entering into contracts with consumers would therefore be well advised to record the date of any complaint or challenge to the validity of the contract made by the consumer. After all, that date may form the starting point of their own limitation period for any claim for restitution or reimbursement.
[1] Court of Justice, 2 July 2026, Joined cases C-261/25 and C-262/25, provisional edition.
[2] Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.
Authors:
- Nathalie De Weerdt, Senior Associate at Stibbe
- Fien Vandepitte, Junior Associate at Stibbe
