New obligation for a cancel button in online portals E-Commerce
A new Section 312k of the German Civil Code (BGB) will apply to e-commerce from July 1, 2022 via the "Act for Fair Consumer Contracts". If entrepreneurs conclude online contracts with consumers that constitute a continuing obligation (e.g. portal access, Saas contracts, but not simple purchase contracts), a number of new requirements will apply. However, some contracts, including contracts for financial services, are exempt.
Cancellation button = Cancellation button = "Cancel contracts here"
The trader must provide a termination button on the website on which the contract was concluded, i.e. a "cancel button". According to the law, the termination button must be "legibly labeled with nothing other than the words 'Terminate contracts here' or with a corresponding clear wording." This wording is based on the existing regulation on the "order with obligation to pay" button, for which it is also disputed in detail what other "correspondingly clear wording" can be.
Confirmation page
If the consumer clicks on the cancel button, he must be taken directly to a confirmation page. On this confirmation page, the consumer must be asked to provide the following information:
The type of termination and, in the case of extraordinary termination, the reason for termination,
his unique identifiability,
the clear designation of the contract,
the date on which the termination is to end the contractual relationship and
the rapid electronic transmission of the confirmation of termination to the customer.
The confirmation page must also contain a confirmation button
Confirmation button = confirmation button = "cancel now"
According to the wording of the law, the confirmation button on the confirmation page must be labeled with "nothing other than the words 'cancel now' or with a corresponding clear wording".
If the consumer clicks on the confirmation button, the declaration of termination is to be submitted.
Location on the website and customer loyalty measures
According to the wording of the law, the "buttons and the confirmation page [...] must be permanently available and immediately and easily accessible". This should make sense for the cancelation button. In future, this will presumably have to be as omnipresent as the "Imprint" and "Data protection" links.
However, according to the wording of the law, the confirmation page and the confirmation button ("cancel now") must also be permanently available and immediately and easily accessible. This could be understood to mean that these must also be displayed directly on every page. However, this would make no sense, as the confirmation page and the confirmation button are subsequent steps after clicking the cancel button. The regulation should rather be understood to mean that the confirmation button on the confirmation page may not be hidden. With regard to the confirmation page itself, the provision could at least be understood to mean that it must be called up immediately after clicking the cancel button. However, this requirement already arises from another provision, so it remains questionable what it means when the confirmation page must be "permanently available and immediately and easily accessible". It remains to be seen whether there will be further interpretations of this regulation.
For the time being, however, you would be well advised to adhere to the sequence outlined above and not interrupt this process with intermediate steps or "Are you sure?" - dialogs. Such queries and offers to retain the customer are likely to be of great interest to entrepreneurs. For example, individual customers who are willing to cancel could be offered to suspend the contract only temporarily or to extend the next two months free of charge in order to avoid termination. Depending on how such offers are structured, they could violate the new regulations.
Does it have to be a button?
Despite the term "button", there should be nothing wrong with using a simple hyperlink rather than a "button" in graphic and technical terms. This would also allow the cancel button to be placed in a menu if it is easily accessible.
In the comparable situation of the order button "order subject to payment", it has also not yet been assumed that it would have to be a "button" graphically. However, it remains to be seen how the legal regulation will be interpreted.
Saving the declaration of termination
The consumer must be able to save their declaration of termination with the date and time of submission on a durable medium in such a way that it is recognizable that the declaration of termination was submitted by clicking the confirmation button. This could be implemented, for example, by downloading a PDF file with corresponding content. In most cases, however, it will be more expedient - at least in addition - to send the consumer an email with this content. The requirements from the following two sections can then be implemented immediately.
Notification of receipt of the termination
In addition to the information in the previous section, the trader must confirm to the consumer the content, date and time of receipt of the notice of termination as well as the time immediately by electronic means in text form, e.g. by e-mail.
Notification of the date on which the termination takes effect
Together with the notification from the previous section, the trader must inform the consumer of the date on which the contractual relationship is to be terminated by the termination.
In some cases, this can present considerable technical challenges. This is because the notification of the date of termination must be made immediately. There will therefore be no alternative but to automate this step. However, this means that the termination mechanism, e.g. from the general terms and conditions, must be technically stored and also the exact deadlines for the respective consumer and the respective contract or service package that the consumer is terminating.
In some cases, this can be implemented with reasonable technical effort, e.g. if termination is possible at the end of the month without exception. However, many cases are conceivable in which different notice periods and different notice periods apply to different consumers, for example because they have booked different service packages at different times. Until now, the time of termination did not have to be communicated and could be calculated manually.
The automated calculation of the time of termination is further complicated by the fact that a consumer may be entitled to different termination rights and a consumer can declare termination for different points in time. For example, a distinction must be made between various statutory termination rights and possibly various contractual termination rights as well as termination rights due to special situations, e.g. if a price increase is implemented and the consumer is granted a special right of termination.
A consumer could, for example, give notice of termination "at the earliest possible date". Some consumers, on the other hand, could give notice of termination now at the end of the next but one term extension.
In addition, a consumer can declare either an ordinary termination or an extraordinary termination without notice for good cause. Determining the type of termination is important. This is because termination at the "earliest possible date" takes effect at the end of the next contract period in the case of ordinary termination, e.g. at the end of the next year, but immediately in the case of extraordinary termination.
According to the statutory regulation, the consumer's notice of termination is valid at the earliest possible date if the consumer does not specify a different date. However, the trader must enable and request the consumer to specify the desired date on which the termination is to take effect. If this is done via a list with predefined times, this should still be technically feasible with reasonable additional effort. However, questions are already arising as to how to deal with cases in which the consumer specifies legally inadmissible times. How to deal with this is not regulated in the new law.
In particular, it is questionable whether the consumer must also be able to specify the desired date of termination in a text field. If this were the case, an automated calculation of the notice period would hardly be possible, as the consumer's text message would have to be evaluated automatically and this would not be possible within the scope of the usual technical possibilities of average online platforms.
It can also be considered whether the request for partial termination must also be queried. For example, a consumer could only wish to cancel their premium package but remain a basic member. If this is the case, further differentiation is required on the confirmation page.
In practice, it will therefore depend on a clever design for the respective platform based on the applicable termination mechanisms, e.g. a certain combination of a selection option via a list and manual specification with limitations already at the input option. To this end, however, the various statutory and contractual termination rights must first be determined. It remains to be seen how the new regulation will be interpreted by the courts.
Legal consequences of violations
Violations of the provision of the termination button, the confirmation page and the confirmation button have the consequence that a consumer can declare termination at any time with immediate effect, i.e. without observing a notice period. This means that all existing customers could cancel with immediate effect on 01.07.2022 instead of waiting for the next contract period of, for example, another year.
In addition, infringements of the new requirements can be pursued via warnings and the legal pursuit of injunctive relief by competitors and associations. The usual consequence of this is that a cease-and-desist declaration with a contractual penalty will be requested, as well as the reimbursement of warning costs or court and other legal costs.
Summary
Every trader who offers consumers the conclusion of continuing obligations online should - unless one of the few exceptions applies - make the new termination button, the confirmation page and the confirmation button available before 01.07.2022 and implement the processes described above. As these are not just minor changes to the platform or website, but contractual provisions from the general terms and conditions may have to be technically stored all at once, implementation should be started promptly. There is no transition period after 01.07.2022.