On May 17th, the CJEU issued a judgment in the German case DC (Rétractation après l’exécution du contrat) (C-97/22) interpreting Article 14 of the Consumer Rights Directive. Article 14 CRD determines consumers' obligations when they withdraw from a contract. This includes releasing consumers from their obligation to pay for the performance of services provided during the withdrawal period, if consumers were not pre-contractually, transparently informed about their obligation to pay in such circumstances, as well as about conditions for using their right of withdrawal (pursuant to Article 6(1)(h) and (j) CRD).
 |
| By Jimmy Nilsson Masth on Unsplash |
The consumer in the given case concluded an oral, off-premises contract for the renovation of the electrical installations in their house. There was no information provided on the right to withdrawal at that time. This became an issue when the contract was fully performed and the consumer did not pay the invoice for the provided services. The consumer claimed they did not have to pay, as they subsequently withdrew from the contract and Article 14(4)(a)(i) and (5) CRD released them from their obligation to pay due to the consumer not having received relevant pre-contractual information on their right of withdrawal. German courts posed a question whether CRD's rule that consumers should no bear any costs in such circumstances extends as far as to prevent traders and service providers from asking for any compensation for enhancing consumers' assets, 'in breach of the prohibition of unjust enrichment' (para 19).
The CJEU very summarily confirms that indeed, in order to provide high level of consumer protection aimed at by the CRD, and considering the full harmonisation character of its provisions, the consumer may not be obliged to 'incur costs that are not expressly provided for by that directive.' (para 31). This conclusion also supports the 'fundamental importance which Directive 2011/83 ascribes to the pre-contractual information' (para 32).
The consequence of this judgment is that if service providers breach their pre-contractual information obligations, consumers benefit from this breach regardless whether consumers themselves act in good or bad faith. The CJEU is clear that service providers may not rely in such a case on the principle that any penalties should be proportionate (para 32). This judgment assigns then quite a far-reaching sanction to the breach of pre-contractual information duties. Of course, traders and service providers may easily protect themselves against these sanctions by fulfilling their information obligations. Still, it is curious to have the 'fundamental importance' of pre-contractual information obligations recognised at a time when the critique of their effectiveness as consumer protection measures is at its highest. Is it the Court's intention to try to revive them somewhat?
