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Contracts

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  1. International Contracts
  2. Types of Contracts
  3. International Sales Contracts
  4. Warranty Terms
  5. Consumer Protection
  6. Commercial Law
  7. Incoterms

Consumer Protection

Freedom of choice and transparency in business relations are the basic requirements for a functioning market. Consumer protection laws make sure that the private consumer has sufficient scope for making buying decisions. Aside from having an administrative obligation to supervise and provide information, consumer protection laws also directly affect contractual agreements in that they assure contractual freedom in cases where business practices tend to restrict the consumer's freedom of choice.

Many of the relevant national regulations are the results of European harmonization measures. Most of the pertinent EU directives on consumer contracts have been integrated into the German Civil Code (Bürgerliches Gesetzbuch - BGB). These include:

  • Minimum requirements for standard terms and conditions in contracts (Allgemeine Geschäftsbedingungen - AGB) to ensure the transparency of the so-called "small print". Sections 305 et seq. BGB served as the blueprint for the EU Directive on Unfair Terms in Consumer Contracts. Standardized provisions that do not comply with these requirements are not binding.
  • Measures to reduce the surprise effects of some kinds of selling strategies, such as distance and door-to-door selling. Sections 312 et seq. BGB grant consumers two-weeks time within which they are entitled to withdraw from such contracts.
  • The same legal relief is afforded in the case of loan contracts coupled to consumer sales.
  • Consumer sales contracts are subject to stricter warranty regulations (Sections 474 et seq. BGB), e.g. the onus is on the seller in the first six months to prove that he/she is not responsible for hidden defects.

A black list, which was endorsed by the EU Unfair Commercial Practices Directive, is currently being discussed as a possible amendment to the German Unfair Competition Act. In addition, the local Commercial Trades Supervisory Offices also monitors some areas affecting consumer health and safety. For further information, please refer to our site on trades supervision.

There are also many non-governmental and private organizations in Germany that watch over consumer protection rights: a nationwide network of public consumer-advice centers (Verbraucherzentralen) provide consumers with advice and legal support. Consumer safety groups such as the public foundation "Stiftung Warentest" also publish the results of product testing carried out on a regular basis.