Those who disregard the requirements for information regarding the right of withdrawal sometimes incur significant financial losses! In such cases, the withdrawal period does not commence, the right of withdrawal does not expire, and no compensation for value is due.
Can incorrect instructions on the right of withdrawal lead to financial penalties?
The dispute between the parties arose from specific details concerning the right of withdrawal within a brokerage contract concluded off-premises. The brokerage contract contained the following pre-formulated declarations:
I request that you commence the provision of the service before the expiration of the withdrawal period (Section 357 para. 8 BGB).
I am aware that I lose my right of withdrawal (§ 356 para. 4 BGB) upon complete performance of the contract by you, if you have fully rendered the service before the expiration of the withdrawal period.
A sample withdrawal form was not attached to the brokerage agreement. The broker's contractual partners received a copy of the brokerage agreement, the cancellation policy, and the sample withdrawal form significantly after the contract was concluded. The broker's contractual partners revoked the brokerage agreement months after its conclusion. Due to a successful mediation of potential buyers in the interim, the broker demanded his commission.
Ultimately, the broker's claim failed before the Federal Court of Justice (BGH).
When does a broker not receive commission?
The BGH determined that the broker's claim failed on three counts:
Were the cancellation policy AND sample withdrawal form provided?
The withdrawal period had not yet expired at the time of the declaration of withdrawal; more precisely, the withdrawal period had not even commenced! According to § 312 para. 1 sentence 1 BGB in conjunction with Art. 246a § 4 para. 2 sentence 1 EGBGB, the entrepreneur must provide the consumer with the information pursuant to Art. 246a §§ 1 to 3 EGBGB on paper or another durable medium. This information includes the cancellation policy and the sample withdrawal form according to Art. 246a § 1 para. 2 sentence 1 no. 1 EGBGB.
The broker failed to fulfill this information obligation. The broker did not provide the customers with the cancellation policy and the sample withdrawal form. It is also insufficient if the customer can merely inspect the required information on site.
Were all information obligations fulfilled?
The BGH determined that the right of withdrawal had not expired according to § 356 para. 4 sentence 1 BGB.
According to § 356 para. 4 sentence 1 BGB, the right of withdrawal expires if the entrepreneur has fully rendered the service and only began performing the service after the consumer gave their express consent and simultaneously confirmed their awareness that they would lose their right of withdrawal upon complete performance of the contract by the entrepreneur.
However, the expiration of the right of withdrawal according to § 356 para. 4 sentence 1 BGB at least requires that the entrepreneur has fulfilled their information obligations according to § 312d para. 1 BGB in conjunction with Art. 246a § 4 para. 2 sentence 1 EGBGB and has provided the consumer with the necessary information. This was not the case. The broker did not provide the customers with the cancellation policy and the sample withdrawal form.
When can a broker demand compensation for value?
The BGH also rejected the broker's claim for compensation for value under § 357 para. 8 BGB. The claim for compensation for value under § 357 para. 8 BGB requires that the entrepreneur has provided the consumer with the necessary information according to Art. 246a § 1 para. 2 sentence 1 no. 1 EGBGB on paper or a durable medium. This was (once again) not the case. The broker did not provide the customers with the cancellation policy and the sample withdrawal form.
What lessons should be drawn from the BGH's decision?
The BGH's decision directly concerned only a claim for broker's commission. However, the relevant provisions also, and primarily, apply to contracts in online shops. Consequently, virtually all online retailers are affected.
It is once again evident that online retailers must not underestimate the stringent formal requirements of the information obligations under the BGB and EGBGB. 'Homemade' solutions almost invariably lead to problems.
Should you have a 'creative' design proposal regarding the information obligations under the BGB and EGBGB, please have this proposal reviewed by a lawyer before implementation. We are happy to assist you.
Source: BGH, Judgment of 26.11.2020, Ref. I ZR 169/19
Lower courts: OLG Hamm, Judgment of 12.08.2019, Ref. 18 U 119/18
We are readily available to advise you on all aspects of IT/IP and data protection law.
GoldbergUllrich Attorneys at Law 2021
Julius Oberste-Dommes LL.M. (Information Law)
Lawyer and Specialist Lawyer for Information Technology Law
