Contracts in Germany: I am writing on the topic of contracts in Germany . I want to highlight their importance and potential pitfalls for expats. I emphasize the need for awareness and understanding of German contract law. The information presented is generally applicable, with exceptions possible.
Standard Contract Length and Cancellation: Many standard contracts in Germany (telecommunications, gas, electricity) typically last two years. While cancellation before the two-year period is sometimes possible (eg, when moving or leaving the country), it's crucial to be aware of this standard length.
Automatic Direct Debit (“Direct Debit”): Most German contracts utilize automatic direct debit from the bank account. This is convenient but highlights the risk of unintentionally continuing payments if the contract is forgotten. This system differs from other countries' payment methods.
Cancellation Notice Period and Automatic Renewal: Generally, a three-month notice period is required to cancel a contract. Missing this deadline by even a day can lead to an automatic one-year renewal, resulting in significantly extended payment obligations. This emphasizes the importance of careful planning and timely cancellation.
Written Cancellation Required: Contract cancellations must usually be submitted via postal mail, with emailed cancellations rarely accepted.
Phone Contracts and Potential Misunderstandings: Do not enter into contracts over the phone, especially if German language proficiency is limited. Even with English-speaking agents, potential translation discrepancies in the contract details can lead to unintended obligations.
Right of Withdrawal: German consumer law grants a 14-day right of withdrawal for contracts signed online, by phone, or outside an office building. This applies to various service contracts beyond online shopping. However, exceptions exist, such as contracts signed in person at a store, contracts for certain services (construction, land purchase, travel packages, transportation, medical treatment), and contracts where services are rendered immediately for under €40.
Consumer Protection Association: For contract disputes, the hosts recommend seeking assistance from the Consumer Protection Agency, a consumer protection agency, for guidance and support in navigating legal issues.
New Consumer Protection Law (2022): A new law passed in June 2021 and effective in 2022, introduces significant changes to contract terms for new contracts. This includes a reduction of the cancellation notice period to one month, elimination of automatic one-year renewals (replaced with a one-month extension requiring notification), a mandatory visible cancellation button on websites offering online contracts, and a ban on phone sales of electricity and gas contracts.
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