Unilateral amendment of Standard Business Terms used vis-à-vis consumers under German law
Judgement by the German Federal Court of Justice on 27 April 2021
According to the published press release, in its judgement (file reference: XI ZR 26/20), the German Federal Court of Justice (BGH) held certain clauses deeming the customer's consent in the event of an amendment to the bank's standard business terms to be invalid.
Background of the case
The plaintiff is the German Federation of Consumer Organizations and Consumer Associations (Bundesverband der Verbraucherzentralen und Verbraucherverbände). The defendant is a bank that uses certain standard business terms vis-à-vis consumers, which include clauses allowing for amendment to such terms without express consent of the consumers.
Content of the relevant clauses
The relevant clauses provide that amendments to the bank's standard business terms shall be offered to customers in text form no later than two months before their proposed effective date. The customer shall be deemed to have given its consent if the customer has not indicated its rejection before the proposed effective date of the amendment. In its offer, the bank specifically draws the customer's attention to this deeming effect.
BGH’s decision: Breach of German Standard Business Terms Law
The BGH ruled that the above mentioned clauses of the bank's standard business terms are not in line with Sections 305 to 310 BGB (the "German Standard Business Terms Law").
It argued that the relevant amendment clauses are broad and apply also to (future) "special terms and conditions" for further lines of business and do not only relate to adjustments of individual details (einzelne Details) of the relevant contractual arrangement, but would also capture substantial changes.
According to the BGH, the deviation unduly disadvantages the customers of the bank within the meaning of a core provision of the German Standard Business Terms Law (Section 307 BGB) because the clause would allow to reshape the contract as a whole based on a deemed consent in the absence of a timely rejection and such broad change would require a proper amendment agreement between the parties.
The exact reasoning of the judgement still needs to be published and might provide further guidance for market participants.
We are happy to discuss the BGH's judgement with you and any consequences that it might have for your business.