Germany’s Federal Court (BGH) has confirmed two lower court decisions that denied a preliminary cancellation of a DSL contract at the occasion of the account holder moving to a place where there was no connectivity due to lack of supporting infrastructure.

The DSL contract is a so called continuing obligation. The initial duration of such a contract is often stipulated with two years. In General Terms of Contract of the provider two years is the maximum duration permissible under the law. Still, the law basically allows to terminate a continuing contract under certain conditions. This for example the case if one can cite exceptional reasons and does so within two weeks after being aware of those reasons. Whether the reasons cited qualify as “exceptional” is a question which is answered by scrutinising the circumstances and weighing the opposing interests of getting out of the contract immediately on the one hand and insisting on the completion of the contract on the other hand.

In the case under revision of the BGH the plaintiff entered into a contract with the defendant in May 2007 to provide internet via DSL access. The contract was binding for two years. In November 2007 the plaintiff moved to a different municipality where the necessary DSL compatible infrastructure was not available. This prompted the defendant to notify the plaintiff that it was unable to provide access. The plaintiff thereupon terminated the contract. After the defendant continued to demand the monthly basic fee, the plaintiff sought declaratory relief that the contract had been properly terminated and no such obligation existed.

The BGH along with the lower courts held otherwise.

It found that shifting one’s residence, be it for private or work related reasons, that ultimately led to the confounding of the contract did not meet the bar of qualifying as an exceptional reason. The Court pointed out that this reason belongs to the sphere of the party seeking termination and is beyond the sphere of control of the other party. Such reasons, however, are generally not to be regarded as exceptional in nature. The consumer who enters into a long term contract has to bear the risk of not being able to use the service following changing circumstances in his personal life. The BGH also weighed the make up of the specific contract at the case at bar. It argued that the long contract period was linked to a low monthly basic fee and a contract with reduced longevity but an increased monthly base fee was readily available. Also, the Court calculated that the costs of the technical gadgets such as a router or WLAN Stick which the defendant provided would only be offset with the start of the 2nd year.

The Court decision has exacerbated the negotiation position of expatriates in often occurring cases where they have to return home unexpectedly while the “continuing contract” - be it a contract of the kind discussed here or a different one such as a gym membership - is still ongoing In order to avoid such a situation at the outset it is vital to have the necessary
awareness and - where possible- try to reach the explicit agreement in written form
that a departure from Germany for good is acknowledged as a reason for terminating the contract. Such an individual agreement has supremacy over any general terms of contract.

(BGH, Urt. v. 11. 11. 2010 – III ZR 57/10)


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