Withdrawal

Withdrawal / Rücktritt

September 22, 2023

If the debtor does not perform the agreed service or does not perform it in accordance with the contract, he/she may withdraw from the contract pursuant to section 323 (1) of the German Civil Code (BGB). Before doing so, he/she must have set the debtor a reasonable deadline for performance or subsequent performance. Pursuant to section 323 (2) BGB, this may be dispensable if the debtor seriously and finally refuses performance, if performance on a certain date is so important for the creditor that the transaction stands or falls for him/her with the timely performance (so-called fixed transaction, for example the delivery of a wedding dress after the wedding) or if there are other special circumstances that justify immediate withdrawal after weighing the mutual interests.

Withdrawal is excluded if the creditor is solely or predominantly responsible for the circumstance giving rise to the withdrawal or if the creditor is in default of acceptance and the debtor is not responsible for the circumstance. Section 323 (4) BGB. If there is only an insignificant breach of duty, withdrawal is also excluded.

A right of withdrawal can also result from the impossibility of performance, section 326 (5) BGB. A contractual agreement of a right of withdrawal or an exclusion of the right of withdrawal is also possible in principle.

Declaration of withdrawal

If the deadline set in accordance with section 323 (1) BGB expires unsuccessfully, is dispensable or if there is another right of withdrawal, the creditor must first declare his/her withdrawal to the debtor, section 349 BGB, as this is a so-called right of formation which must be actively exercised. The declaration of withdrawal can be made informally, i.e. it does not have to be made in writing, but can also be made orally, for example. The declaration does not have to contain the word "withdrawal" explicitly, it only has to be clear that the creditor wishes to withdraw from the contract. In principle, the declaration cannot be bound to certain conditions or deadlines. Once a withdrawal has been declared, it cannot be revoked.

Legal consequences of the withdrawal

The legal consequences of an effective withdrawal are regulated in section 346 BGB. Accordingly, the exchanged services must be returned, for example, the purchased item must be returned and the purchase price paid must be refunded. This gives rise to a so-called obligation to grant restitution. If it is not possible to return the item, for example, if it is a matter of incorporeal performance such as services or work or if it is a consumable item that has already been used, compensation for lost value must be paid instead. This shall also apply if the item has deteriorated or has perished completely, unless this is due to proper use. By way of exception, the obligation to pay compensation may be waived if the defect entitling the debtor to rescind the contract only became apparent during the processing or transformation of the item or if the debtor is not responsible for the deterioration or destruction of the item or if this could also have occurred in the same way for the creditor. This is the case if, within the framework of a statutory right of withdrawal, i.e. for example section 323 (1) or 326 (5) BGB, a deterioration or destruction of the object has occurred although the entitled party has exercised the same care in the use of the object as he/she would have exercised in his/her own affairs. If a purchased item has been broken or damaged only by accident or through slight negligence, no compensation for lost value is payable if the person entitled to rescind the contract has handled the item with the same care as he/she is accustomed to using in his/her own affairs. This is regularly the case, as the buyer usually treats the goods, he/she has acquired as his/her own, as one does not usually think of a possible restitution relationship arising later. Furthermore, in the case of a withdrawal, benefits of the use of the thing or corresponding compensation for the value according to section 346 I BGB are to be surrendered. A "classic" in practice is the compensation for the value of the use of a car for the kilometres driven or for the reduction in value of the car associated with increased mileage. Here, however, the formula for calculating the amount of compensation for use is disputed.

In return, the restitution creditor must reimburse the debtor for necessary expenditures in accordance with section 347 (2) BGB if the debtor pays compensation for the value or if the obligation to pay compensation for the value is excluded. Uses are financial expenditures which benefit the object. Necessary expenses are maintenance costs for the proper use or preservation of the thing, e.g. repair costs for a car, feeding costs for an animal, etc. Other expenses are only to be reimbursed if they are necessary for the proper use or preservation of the thing. Other expenses are only to be reimbursed if they are useful for the creditor from his/her point of view and he/she is thus enriched by them.