No payment obligation of a consumer in the event of revocation after fulfillment of the contract

The law grants a consumer a right of withdrawal for various types of contract, about which a company must provide proper information. For example, a consumer has a right of withdrawal in the case of an off-premises contract concluded between a consumer and a business. If the consumer was not properly informed of the right of withdrawal by a business before the conclusion of such a contract, they do not have to pay even after the contract has been fulfilled if they withdraw from the contract within the deadline. This was recently ruled by the European Court of Justice (ECJ) in a judgment of practical relevance (judgment of 17.05.2023, ref. C-97/22).

The case in question involved a consumer who concluded an off-premises contract with a company for the replacement of electronics in his home. After the company had provided its service in full, the company asked the consumer to make the agreed payment. However, the consumer unexpectedly withdrew from the contract and refused to pay, arguing that the company had not properly informed him of his right of withdrawal.

The ECJ ruled that the consumer did not have to make any payment to the company despite the contract having been fulfilled, as the company had failed to provide proper information about the right of withdrawal. The ECJ based its decision in favor of the consumer on the fact that a high level of consumer protection must always be ensured under the Consumer Rights Directive (Directive 2011/83/EU).

The consumer must therefore be protected in particular outside of business premises and must be able to make an informed decision to conclude a contract.

However, outside of business premises, the consumer may be under greater psychological pressure than inside, or be exposed to an element of surprise, which means that information about the right of withdrawal is of central importance to him.

Accordingly, the consumer is exempt from paying for the services under a contract concluded with a trader if he exercises his right of withdrawal in due time and has not previously been duly informed of this right by the trader.

The contractor must therefore bear the costs incurred by the fulfillment of the contract.

The ECJ's ruling once again makes it clear that, in particular, entrepreneurs who offer their services in doorstep selling outside traditional business premises or by distance selling, for example online or by telephone, should be aware of the role of the framework conditions of their contracts and, in particular, their duty to inform consumers about the right of withdrawal.

PBC legal takeaways: The ECJ ruling illustrates the high level of consumer protection afforded by the right of withdrawal. The right of withdrawal exists for consumers even after the contract has been fulfilled. On the other hand, traders who do not properly comply with their obligation to provide information on withdrawal must expect that consumers will not have to pay for services already provided - even if these have already been provided in full.

It should also be borne in mind that the consumer's withdrawal period is extended to one year and 14 days if he has not previously been informed of his right of withdrawal.

Contracts and business practices should therefore be carefully reviewed and, if necessary, adjusted accordingly in order to avoid major financial losses, even after the 14-day period has expired.

We will be happy to help you review your contracts and provide you with timely revocation instructions for consumers.