When you, as a consumer, enter into a contract for services—such as for electrical work or renovation services—the question often arises as to whether you have a right of withdrawal. There is no one-size-fits-all answer to this question, as it depends crucially on the circumstances under which the contract was concluded. In particular, it is decisive whether the contract was concluded outside of business premises or through distance selling.
A right of withdrawal generally applies if the contract was concluded outside the business premises of the contractor. This is the case, for example, if the contract is signed at your home or a similar location. The same applies to so-called distance contracts—that is, contracts concluded exclusively via means of communication such as telephone, email, or online platforms.
The situation is different if the contract is concluded at the business’s premises. Even if the contract is concluded at a construction site, the right of withdrawal may be excluded, particularly if the conclusion of the contract was initiated by you. In these cases, there is generally no statutory right of withdrawal.
The start of the withdrawal period is of particular importance. This period is generally 14 days. However, this period does not begin until you, as a consumer, have been properly informed of your right of withdrawal. Such information must be clear, understandable, and complete.
In practice, however, it is often the case that proper instructions regarding the right of withdrawal are either entirely absent or contain errors. In such cases, the withdrawal period is significantly extended—up to 12 months and 14 days. This creates considerable uncertainty for business owners, as contracts remain subject to withdrawal for an extended period.
The consequences of a rescission are particularly serious if the business has already begun performing the work. If the contract is validly rescinded, it must generally be rescinded. This means that services already rendered must be returned or economically compensated.
However, the contractor is entitled to compensation for services already rendered only under strict conditions. In particular, this requires that you, as the consumer, have expressly requested that work begin before the expiration of the withdrawal period. Without such an express request, the right to compensation is generally forfeited entirely.
In practice, this means that in the event of a cancellation, the business receives no compensation whatsoever—despite having already provided services—neither for the labor performed nor for the materials used. This legal consequence is extremely far-reaching and can result in significant economic disadvantages.
Case law has recently reaffirmed these consequences once again. In particular, it has been clarified that consumer protection takes precedence here and that businesses must strictly comply with the legal requirements. Errors in the cancellation policy are generally borne by the business.
Against this backdrop, businesses are strongly advised to carefully review their contract terms and, in particular, ensure that the cancellation policy is properly drafted. Likewise, clear provisions regarding the early commencement of work should be established to avoid the risk of a complete loss of compensation.
Conversely, for you as a consumer, this means that you should be aware of your rights and, if necessary, be able to assert them even after the fact. In particular, if the cancellation policy is missing or contains errors, you may still be able to cancel the contract long after it has been concluded.
The statements represent initial information that was current for the law applicable in Germany at the time of initial publication. The legal situation may have changed since then. Furthermore, the information provided cannot replace individual advice on a specific matter. Please contact us for this purpose.