The Europäische Gerichtshof (EuGH, Court of Justice of the European Union) has clarified the limits imposed by EU law on the supplementary interpretation of contracts in cases involving invalid price adjustment clauses in long-term energy supply agreements (EuGH, judgment of 24 September 2026 – C-900/24). Accordingly, Art. 6(1) and Art. 7(1) of Directive 93/13/EEC preclude a national rule or judicial practice that partially preserves the effects of an unfair price adjustment clause on the basis of a three-year period for raising objections. It is likewise impermissible to allow or require the energy supplier to unilaterally amend such a clause for the future.
District heating contract with long-term price commitment
Annual adjustment of the consumption charge
The proceedings concern a district heating supply agreement that an energy supplier entered into with a Gesellschaft bürgerlichen Rechts (GbR, civil-law partnership) on 21 November 2012. The agreement was based on a standard-form contract used by the energy supplier and had a minimum term of ten years.
The agreed remuneration consisted of three components:
-
The capacity charge covered the maintenance of district heating supply capacity.
-
The consumption charge related to the quantity of heat supplied.
-
The metering charge covered the services associated with recording consumption.
The agreement contained two separate price adjustment clauses. One related to the capacity and metering charges, while the other related to the consumption charge. The energy supplier billed the district heating supplied from 2015 to 2020 using annually adjusted consumption charges.
Unilateral amendment of the clause in 2019
By letter dated 24 April 2019, the energy supplier unilaterally amended the clause governing the consumption charge with effect from 1 May 2019. The GbR had initially paid the amounts billed under the previous clause without objection.
On 3 July 2019, however, it argued that both the original price adjustment clauses and the unilaterally introduced replacement provision were invalid. Before the Landgericht Berlin (Berlin Regional Court), it sought reimbursement of amounts overpaid for the years 2015 to 2018 and a declaration that the clauses in question were invalid.
Outcome of the proceedings before the Landgericht Berlin
On 6 November 2020, the Landgericht Berlin ruled that the contractual price adjustment clauses were invalid. This also included the provision resulting from the unilateral amendment made in 2019. In the Regional Court’s view, the invoices should therefore have been based on the prices agreed in 2012.
The energy supplier appealed against that decision to the Kammergericht Berlin (Berlin Higher Regional Court). The Kammergericht held that the clause governing adjustments to the consumption charge in § 8 Abs. 4 of the district heating supply agreement was invalid. It did not satisfy the transparency requirement under § 24 Abs. 4 Satz 1 der Verordnung über Allgemeine Bedingungen für die Versorgung mit Fernwärme (German Regulation on General Terms and Conditions for the Supply of District Heating).
The Kammergericht then referred the matter to the EuGH. The issues requiring clarification concerned, in particular, the consequences of the invalid clause for the continued existence of the agreement, the so-called three-year rule and the unilateral introduction of a new price adjustment provision.
Requirements under EU law for unfair terms
Not binding on the consumer
Under Art. 6(1) of Directive 93/13/EEC, unfair terms in contracts between traders and consumers are not binding on the consumer. In principle, the contract continues to exist on the same basis if it can remain in force without the unfair term.
The EuGH emphasised that the purpose is to replace the merely formal balance between the parties’ contractual rights and obligations with a genuine balance. The Directive does not require every contract containing unfair terms to be declared invalid in its entirety. Instead, the term concerned must generally be disapplied, while the remainder of the contract continues in force, provided that this is objectively possible under national law.
The position of only one of the contracting parties must not be the decisive criterion for determining whether the contract can continue in force. In particular, the economic consequences for the energy supplier alone cannot determine whether the agreement remains in force without the contested clause.
Deterrent effect of consumer protection
Art. 7(1) of the Directive requires the Member States to provide adequate and effective means to prevent the continued use of unfair terms. National courts must disapply such a term so that it does not bind the consumer.
As a general rule, they may not revise the substance of an unfair term through judicial interpretation. Otherwise, the trader could assume that a court would subsequently modify an invalid contractual provision in a way that at least partially preserved the trader’s interests. According to the EuGH, this would undermine the intended deterrent effect.
Limits on the supplementary interpretation of contracts
Replacement only subject to strict conditions
If a contract would have to be declared invalid in its entirety following the removal of an unfair term and this would have particularly detrimental consequences for the consumer, the term may, under certain conditions, be replaced by a provision of national law. This may include supplementary statutory provisions or provisions that would apply if the parties had agreed accordingly.
By contrast, it is not permissible to fill the resulting gap solely by applying general rules of national law that the legislature has not specifically assessed with a view to ensuring a balanced relationship between all contractual rights and obligations. This applies in particular to general principles of equity or customary practice, insofar as they are neither supplementary statutory provisions nor rules applicable where the parties have agreed accordingly.
In the main proceedings, the supplementary interpretation of the contract developed by the Bundesgerichtshof (BGH, Federal Court of Justice) was based on §§ 133 and 157 BGB (German Civil Code). These provisions concern the determination of the true intention underlying declarations of intent and the interpretation of contracts in accordance with good faith, taking customary practice into account. Subject to the Kammergericht’s final assessment, the EuGH considered that such general rules of interpretation cannot remedy the consequences arising from the removal of the unfair price adjustment clause.
Significance of the consumer’s wishes
When assessing the consequences of the contract being invalid in its entirety or of a clause being removed without replacement, the wishes expressed by the consumer are decisive. According to the findings in the proceedings, the GbR could neither object to the application of supplementary contractual interpretation nor request that the entire contract be declared invalid.
The Kammergericht must now examine, among other matters, whether the contract being invalid in its entirety would have particularly detrimental consequences for the GbR. In doing so, it must also consider whether restitution claims under §§ 812 Abs. 1 and 818 Abs. 2 BGB could eliminate such disadvantages.
EuGH rejects the three-year rule in consumer contracts
Substance of the previous case law
Under the three-year rule at issue in the proceedings, a customer could not rely on the invalidity of a price increase if the customer had not objected to it within three years of receiving the annual invoice in which the increase had first been taken into account.
Under this case law, the price reached on the basis of the clause subsequently held to be invalid definitively replaced the original contractual price three years before the first objection. In legal terms, it was therefore treated as a price that had already been agreed when the contract was concluded.
Continuing effects to the consumer’s detriment
The EuGH found that this infringed Art. 6(1) and Art. 7(1) of Directive 93/13/EEC. The three-year rule meant that a price increase imposed by the energy supplier became definitive once three years had elapsed since the first invoice reflecting that increase and the consumer had not objected.
The effects of an unfair price adjustment clause would thus remain in force to the consumer’s detriment for the period preceding the three years that could still be contested. This is incompatible with the obligation under EU law to disapply an unfair term in relation to the consumer.
The Directive therefore precludes a rule or judicial practice under which a long-term energy supply agreement remains binding through the application of this supplementary interpretation. A consumer must not lose the right to rely on the invalidity of price increases solely because the consumer did not object within three years of receiving the first annual invoice showing those increases.
Treatment of the GbR as a consumer
Art. 2(b) of Directive 93/13/EEC generally defines a consumer as a natural person acting for purposes outside their trade, business or profession. The EuGH explained that two conditions must be met: the party must be a natural person, and the contract must not serve a trade, business or professional purpose.
The Kammergericht had stated that German law extended the protection afforded by the Directive to Gesellschaften bürgerlichen Rechts where they did not engage in commercial activities. According to the information provided by the Kammergericht, the GbR did not act for a trade, business or professional purpose in the contractual relationship at issue.
The EuGH therefore concluded that the GbR could be treated as equivalent to a consumer within the meaning of Art. 2(b) of the Directive. This classification concerns the particular situation in which national law extends the scope of consumer protection under EU law accordingly.
No unilateral replacement of the price adjustment clause
Requirements for mandatory statutory provisions
The EuGH also considered whether the energy supplier may, or is even required to, unilaterally amend an invalid price adjustment clause for the future during the ongoing contractual relationship.
In this regard, the energy supplier and the German government relied on § 24 Abs. 4 der Verordnung über Allgemeine Bedingungen für die Versorgung mit Fernwärme. Under Art. 1(2) of Directive 93/13/EEC, contractual terms that reflect mandatory statutory or regulatory provisions generally fall outside the Directive’s scope.
According to the judgment, the relevant exclusion must be interpreted strictly. A contractual term reflects a mandatory provision only if it reproduces the substance of that provision and expresses, in material terms, the same rule of law. Although identical wording is not required, the substance of the clause must be equivalent to the statutory provision.
§ 24 Abs. 4 of the district heating regulation is unlikely to suffice
§ 24 Abs. 4 of the Regulation sets out general requirements for price adjustment clauses. Under that provision, such clauses must appropriately take account of both cost developments in the production and provision of district heating and the relevant conditions in the heating market. They must also set out all relevant calculation factors in full and in generally comprehensible terms.
However, the provision does not require an energy supplier to unilaterally adjust the agreed price or the clause after a price adjustment clause has been found to be invalid due to unfairness. Subject to review by the Kammergericht, it therefore cannot be classified as a mandatory statutory provision on which a unilateral right of amendment is based.
Art. 6(1) and Art. 7(1) of the Directive therefore preclude a national rule or judicial practice that permits or requires an energy supplier to unilaterally amend, with effect for the future, a price adjustment clause that is invalid due to unfairness.
Transparency must exist when the contract is concluded
Where a clause grants a trader a unilateral right to adjust prices, the grounds and procedure for any potential adjustment must be set out transparently in the contract. On the basis of clear and intelligible criteria, the consumer must be able to foresee the circumstances in which the price may change.
The required scope of the information may depend on the circumstances of the individual case and on the goods or services concerned. As a general rule, information omitted before the contract was concluded cannot be remedied solely by informing the consumer in good time during the performance of the contract about a price increase and a possible right of termination.
Decision on reimbursement claims remains with the Kammergericht
The EuGH judgment answers the questions concerning the interpretation of EU law but does not finally determine the GbR’s specific reimbursement claim. The proceedings remain pending before the Kammergericht Berlin. It must apply the Court’s guidance to the dispute in the main proceedings and also decide on the costs of the national proceedings.
The decision therefore does not result in the automatic reimbursement of all payments made on the basis of invalid price adjustments. Whether and to what extent a reimbursement claim exists will depend on the further assessment of the specific contract and the applicable national provisions, having regard to the requirements of EU law.
Significance for long-term contractual relationships
The decision clarifies the limits within which national courts may address the consequences of invalid price adjustment clauses. Its central elements are the continued existence of the contract, in principle unchanged, without the unfair term, the protection of consumers against the term’s continuing effects and the prohibition on unilateral subsequent correction by the trader.
Long-term supply relationships can raise complex issues concerning the continued existence of the contract, billing and potential reimbursement claims. MTR Legal advises companies, investors and private individuals on the legal assessment of corresponding contractual arrangements and court decisions. Further information is available under legal advice on contract law.
