CJEU overturns Federal Court of Justice case law on price adjustment clauses in heat supply contracts

In the underlying proceedings, the referring court found the price adjustment clause in a heat supply contract to be invalid because it failed to meet the transparency requirement in Section 24(4) of the German Ordinance on General Conditions for the Supply of District Heating (AVBFernwärmeV).

Until now, the BGH filled the gap left by such invalid clauses through supplementary interpretation of the contract under Sections 133 and 157 of the German Civil Code (BGB). Price increases that went unchallenged for three years permanently replaced the original price (the so-called “three-year solution”). The BGH also allowed energy suppliers, under certain conditions, to unilaterally replace an invalid price adjustment clause with a valid one, with effect for the future.

The CJEU has firmly rejected both approaches.

A judgment with serious consequences for energy suppliers

First, the Court made clear that a finding of unfairness must restore the consumer to the factual and legal position they would have been in without the unfair clause. In the Court’s view, the three-year solution preserves the effect of unfair clauses to the consumer’s detriment and removes the deterrent effect required by the Directive.

Moreover, Sections 133 and 157 BGB are general provisions of national law. They cannot be used to fill gaps left once unfair clauses fall away. Second, and at least as significant for the suppliers affected, the Directive also precludes any national rule or practice allowing an energy supplier to unilaterally amend an invalid price adjustment clause with effect for the future.

Repayment exposure, with no unilateral fix

It is the combination of these two findings that makes the practical consequences for the heat supply sector so severe. The price adjustment clause falls away retroactively as unfair. The initial price agreed when the contract was signed therefore applies, and consumers can reclaim all overpayments since the start of the contract under Section 812(1) BGB. The only limit is the general limitation periods under Sections 195 and 199 BGB, not the previous three-year cap.

At the same time, the supplier cannot unilaterally correct the defect going forward. The contracts themselves generally remain capable of performance, and the consumer continues to receive heat at the initial contract price. Since neither supplementary interpretation nor unilateral replacement of the clause is permitted, the only route left to the supplier is to amend the contract by mutual agreement.

Options for energy suppliers

If the consumer refuses to agree to an amendment, the remaining options are limited. The most viable route is likely to be ordinary termination followed by an offer of a new contract, where the contract permits this or the minimum term has expired.

A claim for adjustment under Section 313 BGB is also conceivable. The threshold is high, however, and it is doubtful whether a supplier can rely on it where it created the gap itself through a clause that was unfair from the outset. According to the CJEU, replacing an unfair clause with default rules of national law is only permissible if removing the clause would render the entire contract void. In energy supply contracts, that will rarely be the case.

Conclusion: Suppliers should assess their risks and plan future contract design

Given the far-reaching consequences of this judgment, energy suppliers need to act now. The first step is to establish how price adjustment clauses that are already invalid should be treated under the new CJEU case law, what repayment exposure this creates in practice, and what a legally robust structure looks like going forward.

We can help you analyze your existing contracts and assess your specific repayment exposure, defend against repayment claims already asserted, design new, transparent price adjustment mechanisms that comply with the Directive, and develop a strategy for agreeing contract amendments with your customers. We also advise on structuring future contract models and on communications with consumers and regulators. Get in touch. We will help you implement the necessary price adjustments on a legally sound basis.

Case reference: Judgment of September 24, 2026, Case C-900/24 (SVB v. Glarner Straße 5 GbR)