Consumers’ right of withdrawal from the perspective of the European Court of Justice.
A recent case before the European Court of Justice reveals the perspective on the right of withdrawal that consumers concluding a distance contract with professionals can exercise in certain situations.
It should be noted at the outset that the right of withdrawal is a right established in favour of consumers when concluding distance contracts. Specifically, consumers may withdraw from distance and off-premises contracts within 14 days of delivery of the goods or conclusion of the contract for the provision of services, without any explanation or cost. Of course, there are exceptions to the regulation, as the variety of contracts concluded means that each contract is analysed on a case-by-case basis. In addition, if the consumer is not informed of his or her rights, the withdrawal period is extended by 12 months, and the way in which this right is exercised must be easy, such as making a standard withdrawal form available. In Case C-97/22, it was held that the consequence of failure to comply with that right is that the consumer is exonerated from the obligation to pay if the trader fails to inform the consumer properly and, moreover, takes the steps in respect of which he has contracted without complying with the period within which the consumer may withdraw unilaterally.
In fact, the dispute started following a referral to a German court by a consumer who had concluded a contract with a service provider and the latter had failed to inform him of his right to withdraw from the contract. Moreover, the professional had begun work before the expiry of the time-limit conferred for consumer protection purposes in the context of the conclusion of distance contracts, thereby rendering the consumer’s action to withdraw from the contract practically ineffective. Subsequently, the trader turned against the other party to the contract for payment. He argued that his co-contractor could not claim payment for services rendered, since he had not fulfilled his obligations arising from his capacity as a professional, and the CJEU gave reasons for this in its judgment.
Normally, the consumer is required to pay for the services already rendered up to the time when the right of withdrawal is exercised, but an exceptional situation is invoked in this case to protect his rights.
Article 6 of Directive 2011/83/EU on consumer rights requires the trader to inform the consumer of the conditions, time limits and procedures for exercising the right of withdrawal, if any. At the same time, Article 14 provides for an exception to the consumer’s obligation to pay the trader an amount proportionate to the services provided/work carried out when he exercises his right of withdrawal after the services have begun, namely the very situation where the trader himself does not properly inform the other party. The Court has held that if the trader fails to fulfil this obligation, the costs incurred in the performance of the distance contract will be borne by him.
It is important to note that this right of withdrawal arises from the nature of distance contracts, which require additional safeguards to protect the parties as they are not negotiated at the premises of the trader himself.
The Court also stated that the right of withdrawal is of particular importance for the consumer, enabling him to take an informed decision, an essential element in the conduct of any contractual relationship.
In conclusion, the Court clarified the interpretation of Article 14 para. (4) of Directive 2011/83/EU on consumer rights as exempting consumers from any obligation to pay for services/work performed when they exercise their right of withdrawal in the absence of adequate prior information from the trader.