Decision of the Court of Justice of the European Union: Consequences of Missing Right of Withdrawal Instruction
Consumer contracts concluded outside business premises are subject to special information obligations under European consumer law. This includes, in particular, the obligation to properly inform consumers about the existing right of withdrawal. The Court of Justice of the European Union (CJEU) has recently clarified that violations of these information obligations can have significant economic consequences for entrepreneurs.
Initial Situation: Craft Services in the Context of Doorstep Transactions
Contract Conclusion Outside Business Premises
The focus is on a situation that can occur with craft services: The contract is not concluded on the entrepreneur’s premises, but rather at the consumer’s location. Such scenarios are regularly categorized under consumer protection law as contracts concluded outside business premises, with corresponding instructional and informational requirements.
Importance of Right of Withdrawal Instruction
If a consumer is not properly informed about their right of withdrawal at such a contract conclusion, this can result in the withdrawal period not commencing or being extended. Consequently, this may allow the consumer to withdraw from the contract even after the service has been rendered.
Key Statements of the CJEU: No Compensation Without Proper Instruction
Withdrawal Possible Despite Rendered Service
The CJEU addressed the issue of legal consequences when a consumer withdraws from the contract even though the craft service has already been performed, yet the entrepreneur did not provide proper instruction. According to the decision, withdrawal in these scenarios is not excluded from the outset.
Entrepreneurs May Not Receive Compensation
The central point of the decision is the consequence for the entitlement to remuneration: If the entrepreneur did not properly provide consumer information – particularly regarding the exercise of the right of withdrawal – this may result in their inability to claim compensation for services already rendered. The CJEU emphasizes that European consumer law attaches strict consequences to the fulfillment of information obligations.
Sanctioning of Information Obligation Violations
The decision shows that EU consumer protection does not only focus on the possibility of withdrawal but also associates violations of information obligations with noticeable legal disadvantages for entrepreneurs. It is crucial that the consumer should be able to make their decision about concluding the contract with full knowledge of their rights.
Classification for Contractual Practice
Relevance for Work and Service Contracts
The principles addressed by the CJEU do not apply to individual contract types only, but can be relevant wherever consumers conclude contracts for work or services outside business premises and legal information obligations are not met.
Distinction Issues in Individual Cases
The decision also highlights that legal assessment often depends on the specifics of the particular contract conclusion, such as categorization as a contract concluded outside business premises, as well as the content, form, and provability of the information provided.
Consultation on Contract Law Questions
Companies, investors, or wealthy individuals with questions regarding contractual design, information obligations, or legal risks associated with contracts concluded outside business premises can seek tailored support based on the specific situation.Legal Consultation in Contract Law by MTR Legal Rechtsanwälte can be found at the mentioned link.
