Rescission is one of the ways to end a contract if the other party materially breaches it. You don’t need the other party’s consent, but the law only allows it in certain cases. In our article, you will learn not only which situations these are, but also how to withdraw from the contract and what you need to take into account.
Withdrawal from the contract – in which cases is it possible?
Withdrawal from a contract is generally regulated by the provisions of the Civil Code. For a valid withdrawal from a concluded contract , there must always be a reason, and the contract may not be withdrawn at the arbitrary will of the contracting parties. The possible cases are defined by law or can be clearly defined in advance in the contract. The contract may also refer to the terms and conditions, where withdrawal provisions can often also be found.
Tip: A special case of withdrawal is the possibility for the consumer to withdraw from the contract within 14 days if it was concluded at a distance (most often via an e-shop).
If your contract does not contain any withdrawal clause, you can only do this if one of the following situations occurs:
(a) A material breach of contract
Imagine a situation where you enter into a contract for the purchase of a bicycle that is supposed to have certain specific features. For example, you want the bike to have suspension forks and a lightweight aluminium frame. You enter into the contract at a bricks-and-mortar shop and, after the bike is delivered, you discover that the bike does not have these required features. In this case, there is a material breach of contract because the seller knew, or must have known, when you entered into the contract that you would not have entered into the contract if you had foreseen that you would receive a bicycle without suspension forks and a lightweight aluminium frame.
Tip: Rescission can also apply to real estate, even if you have already started living there and then discover some hidden defects that you did not know about. When can I validly withdraw from a property purchase contract in this way? This is the subject of our article.
b) Default
Another example of when a contract may be withdrawn from is when the other party to the contract is in default of performance in a material way. You have entered into a contract for the painting of a flat and the painter is in delay in starting work for a long period of time, but does this situation prevent you , for example, from continuing with the subsequent renovation of the flat? This is a material delay in performance, because if this fact had been known to you when the contract was negotiated, it would not have been signed.
c) Withdrawal from the contract in the event of defective performance
Contracts are to be performed properly, i.e. without defects. If the defect constitutes a material breach of contract, the buyer has the right to choose between remedying the defect, supplying a new item or repairing it, providing a discount on the purchase price, or withdrawing from the contract. A material breach of contract is, for example, when you order goods that do not have the characteristics you requested or were advertised when you ordered them. For example, you buy a smartwatch that is supposed to have GPS, but after installing it you find that it does not.
Tip: Find out more about the warranty for defective consumer goods.
d) Withdrawal from consumer contracts
If you conclude a contract by means of distance communication (via the internet, over the phone) or outside the usual business premises (e.g. in your home, on the street, on a tour organised to promote goods), or if you conclude a consumer credit contract, you are in the position of a consumer and have the right to withdraw from the contract without giving any reason. You may withdraw from the contract within 14 days of receipt of the goods or, in the case of the provision of a service, of the conclusion of the contract.
Muž na pohovce podepisující odstoupení od smlouvy
A classic example would be ordering goods through an e-shop and not liking them when they are delivered. You can return such goods. However, you are responsible for the shipping costs. In exceptional cases, the right of withdrawal cannot be exercised, for example for:
- tour contracts,
- contracts for the delivery of newspapers and magazines,
- perishable goods such as foodstuffs or cut flowers,
- goods customised to the consumer’s requirements,
- goods that have been removed from the hygienic sealed packaging that protects the goods – for example, a toothbrush, contact lenses, packaged food,
- CDs and DVDs (if their original packaging has been damaged),
- services such as transport, catering, leisure if purchased for a specific day, etc.
Make sure you get everything you're entitled to when you withdraw
Sellers or suppliers often use legal loopholes or ask clients for things they are not entitled to. We will handle the withdrawal from the contract for you so that you do not lose out in the end.
Form of withdrawal from the contract
The specific form of withdrawal is not specified in the Civil Code, but it will depend on the type of contract. If the type of contractual relationship is subject to a legal obligation to be in writing (for example, a contract for the purchase of real estate), the withdrawal must also be in writing.
The withdrawal should make it clear who the parties are, what the contract is and the fact that the act of withdrawal is taking place. It is not a legal obligation to state the reason for the withdrawal, but it may be advisable to do so.
Advice from the Accessible Advocate: send the withdrawal preferably by recorded delivery, so that in the event of any disputes you have proof that the document was delivered on a specific date and to a specific person.
Tip: Learn how to make a successful complaint.
Consequences of withdrawal from the contract
The effects of withdrawal from the contract shall take effect when the other party becomes aware of the withdrawal, i.e. by oral notification or by delivery of a written withdrawal. You cannot change your mind about withdrawing from the contract. Once you have delivered the withdrawal to the other party, the rights and obligations of the contractual relationship cease from the outset.
The parties must return everything that has already been performed, so if you have received goods, for example, you must return them and the other party will refund you for the goods. Withdrawal from the contract does not extinguish the obligation to pay any contractual penalty or default interest due or damages arising from the breach of a contractual obligation.
Practical example: Our client had stables built but the supplier failed to deliver them properly. Therefore, the contract was cancelled. However, this did not extinguish the contractor’s obligation to pay lost profits for the stabling of horses that had already been booked.
What you have to take into account when withdrawing from the service
If a part of the service has already been provided on the basis of your consent, you must expect to pay a pro rata part of the price of the service. However, the entrepreneur must inform you of this or have your consent before completing a binding order. Otherwise, you do not have to pay the pro rata portion.
These situations can be complex and involve many legal wiggles. We will be happy to tailor a solution to your case.
