By judgment of 26.03.2020 (Az. C-66/19), the ECJ ruled that a formulation used by numerous banks and savings banks regarding revocation information in loan and credit agreements is not proper because it is not "clear and concise". Therefore, these formulations do not comply with the European Directive 2008/48.
The background to this was a submission by the Saarlouis Regional Court, which initially raised the question of whether this wording was in conformity with European law. The BGH had already ruled in 2016 (judgment of 22.11.2016, Az. XI ZR 434/15) ruled that the wording was legal, so that this approach of the regional court can be described as quite unusual.
What formulation is at issue?
It concerns the following formulation, which is present in millions of credit contracts, since the sample revocation information specified by the Ministry of Justice contained evenly this:
"The period begins after the conclusion of the contract, but only after the borrower has provided all mandatory information pursuant to sec. 492 para. 2 BGB (z. B. Information about the type of loan, (. ) to the net loan amount, (. ) on the term of the contract (. ) has received".
This so-called cascade reference, i.e. the reference to the standard § 492 para. 2 BGB, which in turn refers to the standards Art. 247 §§ 6 to 13 of the Introductory Act to the German Civil Code (EGBGB) is not clear and concise in the opinion of the judges at the ECJ. The ECJ sees it as problematic that the consumer is precisely unaware of these standards and therefore cannot check everything on the basis of the contract he has at hand. However, he must be instructed about all modalities that are necessary for the calculation of the withdrawal period.
Thus, the ECJ states that the cancellation information used in Germany leads to the fact that "the consumer, on the basis of the contract, can neither determine the scope of his contractual obligation nor verify whether the contract he has concluded contains all the information required under that provision, and a fortiori whether the cancellation period, which he may dispose of, has begun to run for him." [Judgment of 26.03.2020 (Az. C-66/19), para. 44]
What does this mean for those affected??
The outcome of the ECJ judges comes as a surprise to many, but it has enormous implications: Nearly all contracts concluded between June 2010 and March 2016 contain this wording, as it did comply with the model revocation information provided by the German legislator, and are therefore revocable.
This means that people who find this wording in their contracts have not been properly informed about their right of withdrawal. The legal consequence is that the revocation period has not begun to run and accordingly the contracts can still be revoked. The exercise of the right of withdrawal after years, which many call the "revocation joker", has thus been revived.
Is my contract affected?
Even if the above wording is included in your contract, the entire contract should be reviewed. The background to this is that, as already explained above, the banks will invoke the so-called "design protection": This means that the bank will object that it has done nothing wrong insofar as it has adopted 1:1 the (incorrect) model of the Ministry of Justice for revocation instructions. This applies, however, only if the banks have not made any changes here. However, many banks have made minor changes that now make this argument obsolete.
It will also still have to be clarified by the courts whether the protection of designs for the banks really outweighs the requirement for consumer protection set by the ECJ.
We will review your loan contract free of charge and provide you with an initial assessment. Our specialist lawyer for banking and capital market law Sebastian Kerner can provide expert information on developments and case law.
To which contracts do the ECJ's requirements apply??
The provisions apply to all consumer credit agreements, i.e. both construction financing and vehicle loan agreements and leasing agreements. In the case of construction financing, contracts from the period 11.06.2010 until 20.03.2016 affected. Especially in the case of vehicle financing, the wording was used for much longer, sometimes still in current contracts. These are therefore revocable until today.
Our law firm specializes in the review of real estate loans and the declaration of revocation. We check your loan agreement free of charge for errors by the bank and tell you whether your contract is also revocable. Our specialist lawyer for banking and capital market law will check carefully and show you how to proceed further.