As a result of the 2022 reform of the law of obligations, there will be an important change for e-commerce retailers as early as July 1, 2022: with the revised Section 312k of the German Civil Code (BGB), entrepreneurs who conclude long-term contracts with consumers online for a fee must provide a termination button on the website if consumers can or could conclude contracts via the website. It should be just as easy for customers to cancel a contract online as it is to conclude it online!
1 Who is subject to the button obligation and when does it apply?
All online or e-commerce merchants whose customers – consumers – conclude a contract online that provides for recurring payments for goods and/or services of the merchant are affected. The only exceptions are:
- Contracts for financial services;
- Contracts that provide for a stricter form of termination than text form.
A cancel button must be offered for all online contracts, including those in smartphone apps.
Whether the contract to be terminated was originally concluded electronically on a website or app is irrelevant. The decisive factor is that consumers could also have concluded the contract on the website and – therefore also in this case – must be able to terminate it in the same way.
It also does not matter whether the trader operates the website itself or – as is the case with intermediary platforms, for example – a third party. In both cases, the trader must ensure that the termination button complies with the requirements of the law. If a third party operates the website, the trader must therefore contractually oblige them to do so.
Please note: pure B2B websites may also be affected by the new regulation if it can at least be expected that consumers will also place orders via these sites. However, entrepreneurs can exclude this by
- restrict potential customers to entrepreneurs through a formalized procedure, such as registration, or
- include a transparent and unambiguous statement that they only conclude contracts with companies.
2 Specifically – what termination process must online retailers implement?
The law provides for a two-stage procedure for online termination, consisting of a termination button and a confirmation page.
- A clearly legible termination button must be set up, which may only be labeled “Terminate contracts here” / “Terminate contracts here” or similarly clear wording. The button must always be available without consumers having to log into their account first;
- The button must take the consumer directly to a (termination) confirmation page where they can enter the following information:
- Type of termination, i.e. ordinary or extraordinary;
- Reason for termination, in the event of extraordinary termination;
- Information to identify the consumer;
- Clear designation of the contract, e.g. by customer, order or contract numbers;
- The date on which the termination is to take effect, whereby this information must not be mandatory and, in addition to a specific date, must also allow the entry of “as soon as possible” or similar;
- E-mail address or other address to which the confirmation of termination can be sent electronically.
- There must be a confirmation button on the confirmation page that the consumer can use to send the termination. It may only be labeled with “cancel now” or similar wording;
- The declaration of termination must be downloadable and permanently storable for the consumer;
- The consumer must be able to recognize that the termination was declared via the button and must immediately receive a confirmation of termination by electronic means, stating this:
- Content of the notice of termination;
- Date and time of receipt of the notice of termination;
- Date on which the contractual relationship is to be terminated.
- Cancellation button, confirmation page and confirmation button must be permanently and immediately available; however, temporary unavailability for technical reasons due to maintenance work is harmless.
3. what are the legal consequences of non-compliance?
If the above requirements are not implemented by July 1, 2022, a consumer may terminate such contracts at any time and without observing a notice period. This also applies to contracts that were not concluded online.
Tip: A GTC clause according to which the consumer can only cancel using the cancel button is invalid; other cancellation options should not be expressly excluded.
The author and your usual contacts will be happy to answer any questions you may have!
Patrick J. Kaatz
kaatz@tigges.legal
+49 211 8687 165