The German Federal Ministry of Justice has announced a draft bill aiming to simplify consumer rights and align national legislation with updated European Union directives concerning consumer and insurance contracts. A key element of the proposed changes is the introduction of an electronic withdrawal button for contracts concluded online.
The ministry envisions a process mirroring the ease of online ordering: consumers will now have the option to revoke agreements with a single click. Justice Minister Stefanie Hubig stated that this measure aims to significantly ease the lives of consumers and provide greater protection against agreements they may not have fully intended to enter. According to the ministry, the button will empower consumers and strengthen their ability to manage their contractual obligations.
Beyond the electronic withdrawal button, the draft bill also addresses the transparency of financial services. Companies will be obligated to provide clear and understandable explanations of financial products to facilitate informed decision-making regarding contract terms. Furthermore, the bill proposes adjustments to the existing “perpetual right of withdrawal” for financial services.
The draft legislation also aims to reduce administrative burdens on businesses by removing the requirement to provide contractual conditions in paper form. The complete referral draft has been distributed to federal states and industry associations, who are invited to submit feedback and comments by August 1st.