Cancellation free of charge in the event of excessive cancellation fees?

15.11.2021

The agreement of a cancellation fee can (this is often overlooked) also be made to the detriment of consumers. Section 7 of the Consumer Protection Act only regulates that in the case of a "deposit agreement" or "revenue agreement", there is a right to moderation in accordance with Section 1336 Paragraph 2 of the Austrian Civil Code. The Supreme Court has already stated several times that - in order to be appropriate and therefore not to be considered invalid due to a violation of Section 879 of the Austrian Civil Code - a contractual penalty must be based on the average damage that, according to the estimate of the honest observer, would normally occur in the event of the breach of contract sanctioned by it (see 4 Ob 113/06f, 4 Ob 99/09a). In other words: If the contractual penalty corresponds approximately to the amount that the entrepreneur actually usually incurs as a result of the consumer's breach of contract (for example, the refusal to actually pay for the purchased goods), it should be permissible. 

However, the relationship between domestic law and (European) consumer protection law is questionable and must now be decided by the European Court of Justice. In the case 4 Ob 131/21z, the Supreme Court has to decide what should happen if a company invokes a clause in its general terms and conditions which, at the company's discretion, requires the customer to pay a cancellation fee of 20% of the purchase price or the actual damage incurred: The subject of the dispute was the purchase of a fitted kitchen at a price of €10,924.70. The customer had withdrawn without being entitled to do so, and the furniture store would have made a profit of €5,270.00 from the sale of the kitchen. The furniture store relied on the so-called "dispositive provisions of Austrian civil law", i.e. on general tort law, which is open to every man and woman, and sued for this amount. The court of first instance awarded the furniture store only 20% of the gross sales price (€2,184.94) and rejected the additional claim. It was of the opinion that because the amount claimed of €5,270.60 was significantly higher, the consumer could not expect the "actual damages incurred" (i.e. the lost profits) to be almost half of the agreed price, and that the maximum damages due to non-performance would be 20% of the gross sales price. In other words: in principle, the amount of the contractual penalty would be abusive, but because the actual damages (which the furniture store had sued for) were even higher, the furniture store's claim was limited to the lower contractual penalty. 

The appeal court changed the ruling - it upheld the claim in its entirety. The fact that the penalty of 20% was excessive and therefore abusive could not lead to the loss of the claim for damages altogether; the general law of damages had to be applied and the furniture store was therefore entitled to the lost profit due to the consumer's unjustified withdrawal from the contract. 

The defendant consumer appealed against this to the national highest court, the Supreme Court ("OGH"). The OGH left the question open in its preliminary decision and referred it to the European Court of Justice ("ECJ") for an answer in the context of a "preliminary ruling procedure". It referred to the ECJ's decisions of January 27, 2021 in cases C - 229/19 and C - 289/19, according to which the dispositive law must remain completely inapplicable if the respective contract contains an abusive clause. However, this legal opinion means that the consumer in breach of contract (who undisputedly ordered the kitchen but then did not take it over) no longer owes any compensation at all, and does not even have to compensate for the damage that he culpably caused. 

The ECJ's decision on this question is explosive, as the result could be that grossly disadvantageous clauses in general terms and conditions achieve the opposite of what the entrepreneur wants: not only the ineffectiveness of the clause itself, but also the loss of additional provisions with the same regulatory content. In addition, such clauses, insofar as they fall within the scope of Union law, must also be examined ex officio for their abusive nature, which is why a consumer objection to this effect is not even relevant. The ECJ's decision will also have far-reaching significance, as similar questions arise in tenancy law. Prader/Weber (ImmoZAK 2021/45) point out that in this case “intransparent operating cost clauses, at least in the partial scope of application of the MRG, no operating costs are to be paid due to the dispositive norm of Section 1099 ABGB (which imposes the burden on the landlord)“.

You might also like

Was an email that ends up in the spam folder legitimately received?

An email is – as a rule – for the...

OGH on the novelty of a patent

Patents are (unlike in copyright law)...

Payments to the wrong account: Supreme Court decision on liability

Who is liable if payments go to the wrong account? In...