Consumer credit law is a field where the contractual balance between the professional lender and the consumer borrower is constantly examined by the courts. A recent decision by the Colmar Court of Appeal (CA Colmar, ch. 3 a, June 16, 2025, No. 24/02617) provides essential clarifications on the unfair nature of the acceleration clause and on the subsidiary recourse to judicial termination of the contract in the event of borrower default.
This article aims to analyze the grounds that led the Court to deem the acceleration clause unwritten, while validating the termination of the contract based on the general law of obligations.
I. The Unfair Nature of the Acceleration Clause
The acceleration of the loan is the contractual mechanism by which, in the event of a payment default, the lender is authorized to demand immediate repayment of the entire outstanding principal, as well as the interest and penalties provided for.
In the case examined (involving S.A. Loisirs Finance and a borrower, Mr. [P]), the acceleration clause provided for the automatic termination of the loan agreement after the sending of a formal notice by registered letter in the event of “non-payment of any amount due” under the contract.
The Legal and Case Law Framework
Article L212-1 of the Consumer Code provides that clauses that have the object or effect of creating, to the detriment of the consumer, a significant imbalance between the rights and obligations of the parties are unfair.
To assess the unfair nature of this clause, the national court must refer to the criteria established by the Court of Justice of the European Union (CJEU). According to these criteria, the examination must focus on several non-cumulative aspects that form part of a set of circumstances surrounding the conclusion of the contract:
- Whether the right granted to the professional depends on the non-performance of an essential obligation.
- Whether this non-performance is sufficiently serious in relation to the duration and amount of the loan.
- Whether the clause derogates from the rules of general law in the absence of specific contractual provisions.
- Whether the consumer has adequate means to remedy the effects of such acceleration.
Criticisms of the Contractual Clause
The Colmar Court of Appeal held the disputed clause to be unfair for several reasons, rejecting the lender’s argument that it was merely a restatement of the statutory provisions of Article L312-39 of the Consumer Code.
In this case, the clause was found to be deficient because:
- It was not a restatement of the statutory provisions but a distinct contractual mechanism from that governing the financial consequences of default.
- It did not inform the borrower of their right to challenge the clause.
- It specified neither the number of missed installments that could justify termination, nor a reasonable notice period allowing the consumer to regularize the debt.
- It left to the lender’s sole discretion both the amount of arrears and the duration of the formal notice.
The Court reiterated a fundamental principle: the assessment of the unfair nature of a clause is made with regard to the clause itself, and not based on the manner in which the creditor implements it. It is therefore irrelevant that the lender may have, a posteriori, sent a formal notice granting a period (in this case, ten days), since the clause, by its initial wording, already created a significant imbalance to the detriment of the consumer.
Legal consequence: The acceleration clause is deemed unwritten. Consequently, the acceleration of the loan declared by the lender (effective November 7, 2022) could not rely on this contractual clause.
II. The Subsidiary Recourse to Judicial Termination of the Contract
Following the annulment of the contractual acceleration, the lender sought, on a subsidiary basis, a finding or declaration of termination of the loan agreement effective as of November 7, 2022.
General Law Basis
When the termination clause is deemed unwritten, the lender may still rely on the general law of contracts to obtain termination.
Termination may result from three sources:
- The application of a termination clause (inapplicable here).
- A notice from the creditor to the debtor (possible if preceded by a formal notice in accordance with Article 1226 of the Civil Code, which was not the case here, as the letter referred to the acceleration of the loan and not statutory termination).
- A court decision.
Article 1227 of the Civil Code allows, in any event, to seek termination through the courts in the event of contractual non-performance. The court is then competent to find or declare the termination.
Sufficiently Serious Non-Performance
For judicial termination to be granted, the debtor’s non-performance of the obligation must be sufficiently serious.
In the present case, the Court found that the borrower had not made any monthly payments after June 2022 and had not taken any steps to propose an amicable repayment plan. The repayment of installments is the essential contractual obligation of the borrower.
The prolonged failure to pay installments (particularly those for June, July, August, and September 2022, justifying the formal notice of October 11, 2022) was deemed sufficiently serious to warrant the termination of the contract.
Consequences of Judicial Termination
The Court of Appeal accordingly declared the termination of the contract effective as of November 7, 2022.
By substitution of grounds, the first instance judgment was upheld as to the amounts due, which correspond, pursuant to Articles 1230 of the Civil Code and L312-39 of the Consumer Code, to the following:
- The unpaid accrued installments.
- The outstanding principal.
- The statutory penalty of 8%.
In essence, while the contractual debt acceleration clause was unlawful, the serious and prolonged non-performance of the borrower’s obligations nevertheless allowed the lender to obtain the termination of the contract through the courts.
FAQ on Unfair Acceleration Clauses and Judicial Termination
| Question | Case Law of CA Colmar (June 16, 2025) |
|---|---|
| What makes an acceleration clause unfair? | A clause is unfair if it creates a significant imbalance to the detriment of the consumer. This is the case when it does not specify the number of missed installments justifying termination, does not provide for a reasonable notice period to regularize the situation, and grants the lender excessive discretion in its application. |
| Why is the fact that the lender sent a formal notice insufficient to validate the clause? | The assessment of unfairness is made with regard to the wording of the clause itself, not the manner in which the lender applied it. If the clause is inherently unfair, it is deemed unwritten, even if the creditor acted in good faith a posteriori. |
| If the acceleration clause is void, does the lender lose all right to demand early repayment? | No. If the clause is deemed unwritten, the lender cannot rely on it, but may still seek judicial termination of the contract based on the general law of obligations (Articles 1224 and 1227 of the Civil Code). |
| What is the key criterion for judicial termination to be granted? | The court must find a sufficiently serious non-performance of the debtor’s obligations. The prolonged and early failure to pay installments is considered a serious non-performance, as repayment is the essential contractual obligation of the borrower. |
| What are the consequences of judicial termination? | The contract is terminated as of the date set by the court (here, November 7, 2022). The borrower is ordered to pay all amounts due: the unpaid accrued installments, the outstanding principal, and the statutory penalty (8%). |
| Was the Court of Appeal’s decision a straightforward confirmation of the initial judgment? | No. The Court upheld the judgment as to the amount of the award, but it effected a substitution of grounds, basing the enforceability of the debt on the judicial termination of the contract rather than on the contractual acceleration (which had been invalidated). |
