The bill to restrict freedom of contract
As I commented in my article from September 6, 2019, the (further) restriction on the possibility of concluding contracts with a commitment period of at least two years that has now been adopted represents a massive curtailment of contractual freedom. There is also no justification for this in the draft bill now before us. On the contrary, it reveals a considerable misunderstanding of freedom of contract and its positive significance for consumers and the economy. It also continues the political line of denying consumers their maturity. Significantly, the draft bill states:
"(...) In many areas where open-ended contracts used to be common, consumers are now often only offered contracts with a two-year term on good terms, which are automatically renewed if the consumer does not terminate them in good time. The restrictions on contract terms that were previously in place are no longer appropriate. The long contract commitment inhibits consumers from switching to another provider and thus competition. The contract extension clauses are overlooked or forgotten by consumers. By limiting the term to one year, shortening the automatic renewal period and providing a shorter notice period of one month, the aim is to give consumers more freedom of choice with regard to their contract. The aim is to strengthen the position of the contractual partner and promote competition. (...)"
Rating
The Federal Ministry of Justice should consider whether the law that has now been passed will actually achieve the opposite of what is supposedly intended. This is because the ban on longer terms massively restricts the previous options for drafting contracts. Whereas the parties involved were previously still able to agree on contracts tailored to their respective needs, the planned restrictions will in fact significantly limit competition and freedom of choice. The losers of the proposed legislation are therefore almost everyone involved. The "winners" are at best those consumers who "forget" notice periods. The worthiness of protecting this group seems highly questionable when you consider that those affected who have "forgotten" to terminate their contract after a two-year contract period had previously benefited from very attractive contract conditions in most cases. In future, thanks to this group of "forgetters", the aforementioned attractive contract conditions will no longer be available to anyone.
