Timeshare contracts: Applicable law in the absence of a choice made by the parties (ECJ)

The Court of Justice of the European Union, by judgment, dated 14 September 2023, in Case C-632/21, in proceedings between JF and NS, and Diamond Resorts Europe Limited and others, concerning an application for a declaration that timeshare contracts concluded between the applicants in the main proceedings and Diamond Resorts Europe are void, ruled that:

1. The provisions of Regulation (EC) No 593/2008 on the law applicable to contractual obligations (Rome I) are applicable, in the context of a dispute before a court of a Member State, to contracts the two parties of which are United Kingdom nationals, to the extent that those contracts have a foreign element.

2. Article 6(2) of Regulation No 593/2008 must be interpreted as meaning that:

- Where a consumer contract fulfils the requirements laid down in Article 6(1) of that regulation (the contract has been concluded by the consumer for a purpose which can be regarded as being outside his or her trade or profession, the professional pursues his or her commercial or professional activity in the country in which the consumer has his or her habitual residence or, by any means, he or she directs such activity to that country or to several countries including that country, and the contract falls within the scope of that activity), the parties to that contract may, in accordance with Article 3 of that same regulation, choose the law applicable to that contract, provided, however, that that choice does not result in depriving the consumer concerned of the protection afforded to him or her by provisions that cannot be derogated from by agreement by virtue of the law which, in the absence of choice, would have been applicable on the basis of Article 6(1), which provides that such a contract is to be governed by the law of the country where the consumer has his or her habitual residence;

- In view of the mandatory and exhaustive nature of that same Article 6(2), it is not possible to derogate from that provision for the benefit of legislation allegedly more favourable to the consumer. (curia.europa.eu/ photo: freepik.com)

Full text of judgement is available here

 

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Editorial

Editorial
George Kazoleas, Lawyer

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