The Bundestag passes a massive restriction on contractual freedom. The Federal Ministry of Justice has thus prevailed with its plan to limit the terms of consumer contracts to a maximum of one year.

Read my article from September 6, 2019 on this now serious legislative proposal, especially with regard to the resulting highly questionable restrictions on contractual freedom.

You can download the draft law passed by the Bundestag here.

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. (…)”