In this legal circular, we present two decisions concerning the consumer’s right to withdraw from a contract, which have recently been addressed by the Court of Justice of the European Union.

Judgment in Case C-529/19 - Möbel Kraft GmbH & Co. KG v ML

In the May circular, we informed you of ongoing preliminary ruling proceedings concerning the interpretation of a provision regulating the exception to the consumer’s right to withdraw from a contract of sale for the supply of goods which have been made to the consumer’s specifications or clearly personalised. In this case, the CJEU was asked whether the right to withdraw from a contract of sale is available to the consumer even where the seller has not yet started manufacturing the goods, where the subsequent customisation of the goods would be carried out by the trader independently (without requiring further suppliers), and whether this question is not affected by the circumstance that restoring the goods to their original state could be done with minimal costs (approximately 5% of the value of the goods).

In this specific case, the dispute was between a German consumer and a furniture seller who had concluded a contract of sale for a fitted kitchen, from which the consumer subsequently withdrew. In its judgment of 21 October 2020, the CJEU held that the exception to the impossibility of withdrawing from the contract applies even where the goods to be manufactured according to the consumer’s requirements or customised to his personal needs have not yet been manufactured. The CJEU emphasises that the trader is, inter alia, obliged to inform the consumer about the possibility or impossibility of withdrawing from the contract before its conclusion, and therefore this cannot be made dependent on a future event. If withdrawal from the contract depended on whether the trader had already started manufacturing the goods or not, his pre-contractual information obligation would not make sense. The nature of the contract from which the consumer cannot withdraw (i.e. whether it is a contract of sale concerning goods which have been made to the consumer’s specifications or clearly personalised or not) must therefore be clear before the conclusion of such contract. If this is the case, even if the goods have not yet been customised, the consumer cannot withdraw from the contract. In view of this conclusion, the CJEU did not address the question of minimal costs for restoring the goods to their original state further.

Judgment in Case C-641/19 - EU v PE Digital GmbH

In these proceedings, the CJEU addressed the consumer’s withdrawal from a contract in a situation where the consumer expressly requested the service provider to commence performance before the expiry of the so-called cooling-off period. In this connection, it also addressed the question of calculating the proportionate amount for services provided. Specifically, this concerned a dispute between a consumer and the German company PE Digital, which operates a dating website. This website allows consumers to conclude with the trader either a free contract with limited contact possibilities or a paid premium contract for a period of 6, 12, or 24 months. In this case, the consumer concluded a premium contract for 12 months, for which PE Digital paid EUR 500 and from which he subsequently withdrew after 4 days. PE Digital charged him almost EUR 400 for the services provided.

In its judgment of 8 October 2020, the CJEU held that the proportionate part of the price to be returned to the consumer should generally be calculated in proportion to the elapsed time of service. Only where the contract expressly provides that one or more services will be provided to the consumer in full separately at the beginning of the performance of the contract can the consumer be charged the price for this partial service separately from the total price. The consumer must therefore have information that a specific partial service will be provided in full at the beginning of the performance of the contract and must know its price. Only in such a case can he make an informed decision whether to request the trader to commence the provision of services before the expiry of the cooling-off period.

As regards the calculation of the proportionate amount for services provided, the provision of Article 14(3) of the Consumer Rights Directive provides that where the total price is disproportionately high, the ‘proportionate amount shall be calculated on the basis of the market value of the goods delivered or the service provided’. The CJEU adds in general terms that the market price should be identified by comparing the price of an equivalent service provided by other traders at the time of conclusion of the contract. In addition, the price charged by the given trader for the same services to other consumers should also be taken into account.

Hana Průchová

This text was originally prepared by the law firm Mašek, Kočí, Aujezdský in cooperation with the Association for Electronic Commerce (APEK) as legal circular No. 10/2020 intended for members of this association.

This text was translated from Czech to English using an AI translator.