Faulty cancellation policy: 5 important tips from a specialist lawyer

A faulty cancellation policy is not uncommon. Errors frequently occur in the presentation of the revocation instruction, and for the consumer, they are generally not clearly recognizable.

For certain consumer contracts, a revocation instruction is legally required. The EU Consumer Directive, which came into force on June 13, 2014, standardizes the formal requirements.

In this article, you will learn firsthand what to watch out for.

Contents

1. What exactly is a faulty cancellation policy?
2. Formulation nuances can be crucial
3. Faulty revocation instruction: Example of a loan agreement
4. Faulty revocation instruction - additional examples
5. The revocation instruction as a complex field within jurisprudence

1. What exactly is a faulty cancellation policy?

Not only lawmakers but also German courts regularly deal extensively with revocation instructions and their legal effectiveness. According to generally applicable case law and supporting judgments, the following revocation instructions are therefore ineffective:

• Incorrect deadline notification: The start of the deadline is not clearly formulated.
• The consequences of revocation are only partially listed or completely missing.
• No distance selling instruction is provided.
• The revocation instruction violates the clarity requirement.
• The mandatory information according to the German Civil Code (BGB) and Introductory Act to the German Civil Code (EGBGB) is missing (in this case: § 492 para. 2 BGB in conjunction with Art. 247 and §§ 6 to 13 EGBGB).

2. Formulation nuances can be crucial

As a consumer, you often cannot recognize the faulty nature of a revocation instruction. Even a single incorrectly used word can render a revocation instruction ineffective. In a corresponding revocation instruction, you often find the word "at the earliest" in the context of the start of the deadline.

The Federal Court of Justice has stated in several judgments that the use of this word leads to an ineffective revocation instruction. According to the court, this word leaves consumers uncertain about the conditions that apply. The word creates ambiguity for consumers.

Rather, it erroneously suggests to the respective consumer that the deadline for revocation could possibly also start later, argued the judges in this regard.

Consequences of a faulty cancellation policy: Judgment allows revocation of a loan

A similar case was heard by the Regional Court of Wuppertal. In this case, it was sufficient that the word "clarify" was used in the contract for a related transaction (combination of loan and residual debt agreement) instead of the bank's use of the word "declare" in the sample text.

The judges at the Regional Court of Wuppertal ruled that by replacing two terms or words, the instruction became ineffective (Case No. 5 O 377/11; judgment of May 8, 2012).
During the pronouncement of the judgment, they argued that a reversal of meaning had occurred in the text.

The consequences of a faulty revocation instruction in this case: The plaintiff was able to revoke the loan, which the bank had previously denied.

3. faulty cancellation policy: Example of a loan agreement

This becomes particularly evident in relation to the faulty cancellation policy in loan agreements. There have been several changes in 2002, 2010, and also in 2016. This circumstance has, for example, led to the expiration of claims because revocations were not submitted in a timely manner or there were formal errors in the declaration of revocation.

Even with regard to the statute of limitations for faulty revocation instructions, loan agreements or financial services hold a special position. Generally, every consumer has an indefinite right of revocation if they have been improperly or incorrectly informed about the revocation.

If you revoke a loan on your own, you have little chance of success. Therefore, assert your rights with the help of a lawyer!

4. Faulty cancellation policy - additional examples

In contracts of various kinds, there are frequently confusions regarding the revocation instruction. We have listed typical formulations and scenarios for a faulty cancellation policy:

• A font size that is too small and therefore difficult to read is used for the revocation instruction. The instruction is hidden within the text and is not visually highlighted adequately.
• An invalid address is provided.
• Misleading or incorrect content obscures the start of the revocation period.
• Missing or incorrect information does not clearly indicate the consequences of revocation.
• Relevant information regarding distance selling is missing.
• Outdated laws or template passages are used in the revocation instruction.
• The revocation instruction is given before the conclusion of the contract.
• Two contradictory instructions are present in different contract documents.

5. The revocation instruction as a complex field within jurisprudence

Due to the amendments made to template texts and laws since 2002, the situation has become significantly complicated.

Only the law that is valid at the time of contract conclusion applies. The jurisprudence regarding a faulty cancellation policy becomes even more complex due to a large number of rulings by lower courts. These court judgments sometimes modify the respective guidelines set by the Federal Court of Justice.

At our law firm, every revocation instruction is carefully reviewed for errors upon request. As a consumer, you should take advantage of this opportunity.

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