Right of withdrawal for tradesman services: massive legal uncertainty to continue in 2025

In 2025, many tradespeople and service providers still face an often underestimated problem: contracts concluded with consumers outside of business premises can be revoked by the customer – even if the work has already been completed. Without proper revocation instructions, there is a risk of complete non-payment in such cases. Recent rulings by the European Court of Justice and German courts confirm this risk and exacerbate the situation.

Already in my previous blog posts Caution for craftsmen: Without revocation instructions there is a risk of non-payment and Uninformed consumer revocation – a long-term consequence without value replacement we pointed out these risks. Nevertheless, even in 2025, many trades businesses are still working without legally compliant contracts and instructions – and are thus taking immense economic risks. In the following, we explain the legal situation, show the latest developments based on new rulings and provide practical tips on how tradespeople can protect themselves.

Right of withdrawal for craft contracts – main features and obligations

Special rules apply to consumer contracts, which are set out in the German Civil Code (BGB). Contracts with consumers that are concluded outside of business premises (so-called doorstep selling or off-premises contracts) can be revoked within 14 days (Section 312g (1) in conjunction with Section 355 BGB). This applies, for example, to cases in which the tradesperson offers an order at the customer’s home and the contract is concluded directly on site (Section 312b BGB defines the term “off-premises” more precisely). The same applies to distance selling contracts (orders by telephone, email or internet).

Important: The trader is legally obliged to inform the consumer about their right of withdrawal (Art. 246a EGBGB). The revocation instruction must be provided clearly and comprehensibly in writing or in text form (e.g. by contract document or email) and contain all statutory information – mere references on the website or in general terms and conditions are not sufficient. If this information is not provided or is provided incorrectly, the 14-day period does not begin to run. Instead, the right of withdrawal is extended by one year and 14 days (Section 356 (3) BGB). The consumer can therefore cancel the contract long after it has been concluded. For tradespeople, this means a whole year and two weeks of uncertainty – the proverbial sword of Damocles hangs over the contractor.

The consequences of such a withdrawal are serious: the contract is rescinded. The consumer does not have to return the goods received or pay for any further services, but what about the work already carried out? This is where the big risk lies: without effective cancellation instructions, the tradesman has no claim to payment – even if the service was provided without fault. In addition, the tradesman cannot usually demand compensation for work already carried out. In other words: If the tradesman has not properly informed the consumer about the right of withdrawal, he will be left completely empty-handed in the event of a withdrawal. Any wages already paid would have to be refunded and any outstanding invoices could not be claimed. This “zero payment” is deliberately intended by the legislator (or EU directive) as a sanction mechanism to encourage companies to comply with their duty to inform.

Exceptional case of “urgent repairs”: It should be noted that there is no right of withdrawal for a few types of contract (Section 312g (2) BGB). A practical example is the urgent repair order that the consumer expressly requests (e.g. the plumber for a burst pipe in the middle of the night). In such cases, the consumer should not be able to revoke the order if the tradesman has carried it out in full. But beware: these exceptions are strictly limited. For most common tradesman services – from gardening to renovations to electrician contracts – the right of withdrawal applies if the contract was not concluded on the tradesman’s premises. Therefore, do not rely on the fact that your order falls under an exception, but always provide proper information if a consumer is your customer.

Current case law (2023-2025): ECJ and German courts exacerbate the situation

In the last two years, several court rulings have once again highlighted the risks for tradespeople. In particular, a ruling by the European Court of Justice (ECJ) in May 2023 caused a stir across Europe and confirmed the already strict requirements.

ECJ ruling 2023: No right to payment or compensation without instruction

Case C-97/22 before the ECJ concerned an electrician who had replaced extensive electrical installations in a consumer’s home. The contract was concluded orally outside the business premises and the tradesman did not inform the customer of his right of withdrawal. The tradesman carried out the work properly and issued his invoice – but the customer refused to pay and declared his withdrawal. The German judge at Essen Regional Court was unsure whether the customer would at least have to pay compensation for the value of the service received (keyword: unjust enrichment) and referred the question to the ECJ.

The answer from Luxembourg was clear: If the trader has breached his duty to inform, the consumer does not have to pay for the service or pay compensation. The ECJ clarified that no costs may be imposed on the consumer if he was not correctly informed about his right of withdrawal. In particular, compensation for lost value in such cases is not compatible with the EU Consumer Protection Directive. The trader bears the full risk. The high value of consumer protection in the EU requires that consumers are actually informed of their rights; otherwise, even the argument of unjust enrichment should take a back seat. As a result, this means that the electrician went away empty-handed – he had worked for free with “legal blessing”.

This ECJ ruling from 17.05.2023 made waves in the skilled trades sector. Consumer advocates welcomed the decision as a strengthening of consumer rights, while many tradespeople were alarmed. In fact, the ECJ confirmed and tightened up the existing legal situation: tradespeople who do not provide information are penalized by being denied any remuneration.

German courts follow suit: Examples from 2024 and 2025

The ECJ ruling has a direct impact in Germany and has already had an influence on local judgments. Numerous courts have since dealt with similar cases. Two recent cases are examples of how the topic is still topical:

• Regional Court Frankenthal (Pfalz), judgment of 15.04.2025 (Ref. 8 O 214/24): A landscaper was verbally commissioned by a customer in April 2024 to carry out extensive work on site (in the customer’s garden). After completion of the work (invoice amount ~€19,000), a dispute arose over the invoice. The customer refused to pay and revoked the contract in September 2024, months after completion. Unsurprisingly, the court sided with the consumer. Because the order had been placed outside the business premises and no revocation instructions had been given, the revocation was still effective even after the original 14 days had expired (period of 1 year + 14 days had not yet expired). According to the clear decision, the landscaper therefore lost any claim to payment for the work. Not a cent for full work – and no compensation either! The judges expressly emphasized that European consumer protection law requires a sanction here in order to encourage entrepreneurs to provide proper instructions. The case made the headlines in the trade press; headlines such as “Lack of withdrawal instructions costs horticulturists their entire salary” made the rounds. This judgment is not yet legally binding (appeal pending), but clearly shows the current trend.
• Federal Court of Justice (BGH), judgment of 06.07.2023 (case no. VII ZR 151/22): In this case, a consumer tried to shamelessly exploit ECJ case law. He had initially commissioned a tradesman to carry out renovation work, which was completed and paid for without any defects. At a follow-up appointment, the customer placed an additional order directly on site without the tradesman providing instructions on how to cancel. After this additional order was carried out, the customer withdrew from the contract and even demanded a refund of the work price already paid – accompanied by a letter from a lawyer including a flyer entitled “The tradesman’s revocation – protect yourself from dubious tradesmen”. For once, a court showed a more sympathetic side to the tradesman: The Federal Court of Justice ruled that there was no right of withdrawal in this particular case because the contract could not be considered “concluded outside of business premises” in formal legal terms. The decisive factor was that the tradesman had prepared a written offer, which the customer only accepted the next day. This meant that both parties were not present in person at the same time when the contract was concluded; Section 312b (1) no. 1 BGB was not fulfilled. Likewise, there was no doorstep selling according to no. 2, as the offer came from the entrepreneur. In this special case, the tradesman was allowed to keep his wages. However, the BGH made it clear that this is not a carte bl anche for everyone: the decision was based on the special circumstances (delayed acceptance, obvious intention to abuse the law on the part of the customer). The decision should not be understood as a general all-clear. In plain language: Just because revocation was excluded in this individual case does not mean that tradespeople can generally relax. Without clear instructions, the risk remains in most cases.

These examples show two things: On the one hand, German courts support the strict line of the ECJ, according to which tradespeople can lose their wages completely if they are not instructed. Secondly, courts try to limit blatant abuse in individual cases – but this tends to be the exception. The prevailing case law strengthens consumer protection, tradesmen are often left empty-handed in an emergency.

The chambers of skilled trades and industry media are also alarmed. The Deutsche Handwerksblatt, for example, aptly headlined: “Right of withdrawal: tradesman fails to instruct customer and loses”. Cases such as the electrician or gardener mentioned above are causing uncertainty. Many tradespeople are asking themselves: Do I now have to expect customers to receive my services “for free”?

Practice 2025: Legal uncertainty and high risks for tradespeople

Despite the clear legal situation and the judgments that have become public, there is still a great deal of legal uncertainty in practice. Many craft businesses do not have the right of withdrawal in the law on contracts for work and services “on their radar”. Smaller businesses in particular, which do not use online stores or written contract forms, often believe that such consumer protection rules do not apply to them. A dangerous misconception – because most tradespeople work directly at the customer’s premises and conclude contracts there, which is exactly what falls within the scope of the right of withdrawal.

Why is there so much uncertainty? Part of the problem is certainly a lack of information: many tradespeople simply don’t know that withdrawal instructions are legally required as soon as they conclude contracts with private customers outside their own business premises. The withdrawal rules are wrongly associated only with online shopping or doorstep selling à la coffee run. However, the law is clear here – and the courts enforce it rigorously.

What’s more, some tradespeople suppress the issue. Understandably, nobody wants to come to their customer with “formalities” or legal information right at the start of the job for fear that this could disturb the relationship of trust. But this shyness can be expensive. Without clear agreements and instructions, the tradesperson is taking an incalculable risk. As shown above, a consumer can still pull the “revocation” lifeline months later – possibly after a dispute about the invoice or the workmanship – and thus deprive the tradesman of his wages.

Another problem is that some dubious actors deliberately exploit the legal situation. There have already been cases in which consumers have been actively encouraged by third parties to use the right of withdrawal in order to “avoid” payment. In the BGH case, the customer had used a flyer from a lawyer with the slogan “Protect yourself from dubious tradesmen” – obviously a legal trick was being used here, even though the tradesman had done a proper job. Such incidents may seem extreme, but they make it clear that if you as a tradesperson ignore the legal requirements, you run the risk of becoming a victim of such “business models”.

Last but not least, uncertainty arises due to the complicated details of the legal situation. What exactly is “off-premises”? (Answer: Everything that does not take place in your permanent place of business – e.g. at the customer’s home or at a trade fair stand, if the contract is concluded immediately at the moment. However, if the customer later accepts your offer in peace, this may be assessed differently). What should the instructions look like? (There are legal templates, but these must be adapted to the situation). What if the customer wants work to start immediately? (Then you need an express waiver of the customer, more on this later). These questions show: Many tradespeople are unsure how to implement the rules in practice. Unfortunately, not all Chambers of Crafts and industry associations – insiders report that there is still not enough warning about this problem.

We feel the consequences in our consulting practice: tradespeople still only come looking for advice after a rude awakening – when the customer has already withdrawn. By then it is usually too late because the legal situation leaves little room for maneuver. The descriptions are the same: “The customer didn’t want to pay, then he read somewhere that he could cancel… Now I’m left with material and labor costs invested, but no way of getting my money back.” These experiences are frustrating and threaten the existence of the company. Especially with larger orders in the five-figure range, a lost wage can wipe out the annual result of a small business.

In short, the current legal situation presents tradespeople with massive economic uncertainties if they do not take proactive precautions. The good news: You can protect yourself with simple means and avoid the vast majority of problems.

Practical tips: How tradespeople can protect themselves from the revocation dilemma

These threatening examples should be a wake-up call for every tradesperson. But there are clear solutions. The risk of revocation can be significantly reduced with proper contract documentation and instructions. The following practical tips will help you to process your next order in a legally secure manner and protect your money:

• Provide written withdrawal instructions: For every contract with a consumer outside your business premises, make sure that the customer receives a withdrawal instruction. It is best to send this to the customer in writing or by email, ideally as an integral part of the contract. Use the statutory model (Annex to Art. 246a EGBGB) as a basis, adapted to your business. It is important that all mandatory information is included: Duration of the period (14 days), start of the period (from conclusion of the contract or receipt of the instruction), procedure for revocation (informal declaration, e.g. by letter or e-mail, is sufficient) and the address to which the revocation is to be sent.
• Confirm receipt of the instructions: Ask the customer to confirm that they have received the revocation instructions – for example by signing an order form containing the instructions or by sending an e-mail confirmation. This serves to preserve evidence. If a dispute arises later, you can prove that the 14-day period was duly set in motion. Without proof, it is possible that the instruction was not given – to your disadvantage in case of doubt.
• Adjust the start of the order to the withdrawal period: Ideally, you should wait 14 days after concluding the contract before starting to perform. This will ensure that the right of withdrawal has already expired by the time you provide the main service. Of course, this is not always practicable – customers often want fast performance. Nevertheless, in the case of plannable projects (e.g. renovations), you can contractually schedule the start of construction a little later in order to allow the withdrawal period to expire. This eliminates the right of withdrawal and you are on the safe side.
• Obtain the consumer’s waiver of immediate revocation (if work begins before the deadline): However, it is often the case that you want to get started straight away – perhaps because the customer is pressing or the order is time-critical. In this case, there is a legal option: the consumer can expressly request that you start work before the end of the 14-day period and at the same time confirm that they will lose their right of withdrawal if the contract is fulfilled in full (Section 357 (8) BGB). In practical terms, this means: Have the customer declare in writing (in the contract or on a separate form): “I agree and expressly request that the tradesman starts work before the end of the withdrawal period. I am aware that I will lose my right of withdrawal upon complete fulfillment of the contract.” – With this agreement, you can get started immediately without risking your money. This is because as soon as you have completely fulfilled the contract, the customer can no longer withdraw. Should he nevertheless cancel while the work is in progress, you would at least be entitled to compensation for the value of the partial service provided up to that point (Section 357 (8) BGB), provided you had given proper instructions. Without such a declaration, however, you bear the full risk.
• Conclude the contract cleverly: The safest way to avoid falling within the scope of the right of withdrawal in the first place is to structure the conclusion of the contract in such a way that there is no surprise situation. As the BGH case showed, it can be helpful to initially only prepare a non-binding offer and give it to the customer or send it on to them instead of finalizing a contract directly on the construction site. If the customer only gives their acceptance later (e.g. the next day by email or telephone), there is no “simultaneous physical presence” – the contract could then not be deemed to have been concluded outside of business premises. Important: This tactic requires tact and in no way replaces the instruction if a right of withdrawal does exist. However, it can tip the scales in borderline cases. In general, you should not rely on such tricks alone, but should proactively instruct customers.
• Document all steps: Record all relevant steps in writing. From the offer and acceptance to the instruction and, if applicable, waiver – archive the communication with the customer. In the event of a dispute, these documents can be decisive. Especially if verbal agreements have been made, send a short email summarizing them (“Thank you for your order for XY, placed on [date] at your premises. Please find enclosed the cancellation policy…”). This way you have proof in case of doubt.

By taking these measures, you avoid the scenario where your customer benefits from your work free of charge. You create clear conditions: The customer knows their rights – and you know where you stand. Most consumers do not cancel a contract if they have been properly informed (they often only cancel because they can and have not thought about it beforehand). Transparency therefore protects both sides.

Legally compliant contract documents: small investment, big impact

Given the threat of losses – tens of thousands of euros in extreme cases – the costs for legally compliant contracts and instructions are negligible. For just a few hundred euros, a specialist lawyer can usually draw up a draft contract tailored to your business that contains all the necessary clauses and instructions. This investment pays off immediately: just one prevented payment default makes up for the costs.

Many tradespeople are reluctant to seek professional help for fear of high legal fees or because they can “do it themselves”. However, as the latest judgments show, the devil is in the detail. Incorrect revocation instructions – be it outdated wording or incomplete information – are of little help. In case of doubt, the instruction is then deemed not to have been provided and you are left out in the cold. It is therefore important that the documents are 100% correct.

The good news is that the requirements are standardized and not rocket science. We have tried-and-tested templates and many years of experience in drafting consumer contracts in the skilled trades sector. Practical solutions can be found for every tradesman that can be used in everyday life without much effort. Do you already have an order form, for example? This can be supplemented with the necessary instructions and signature fields. Do you prefer to work digitally? We provide you with text modules for offers and e-mails. Your workflow doesn’t have to change much with legally compliant documents – except that you can keep your money in the event of an emergency.

You can also use the help offered by your guild or chamber of crafts. More and more organizations are now providing information on the right of withdrawal for tradesmen’s services. There are leaflets and training courses. Nevertheless, we have noticed that many information sheets remain very general. If in doubt, you should therefore seek individual advice to be on the safe side.

Our law firm offers consulting services specifically for tradespeople and service providers in order to draw up sample contracts or to legally review your existing contracts. Now is the right time to take action, especially now that case law has made the risks clear. Feel free to contact us – a few adjustments are often enough to turn a risky “handshake” deal into a solid contract.

Conclusion: 2025 is not the all-clear – act now!

Developments up to 2025 clearly show that tradespeople who execute consumer contracts without proper revocation instructions are playing with fire. The legal situation is clear and will be strictly enforced. In many cases, consumers have the right to cancel contracts, and courts have confirmed that tradespeople are then often not allowed to claim a penny for work already carried out. This drastic consequence may seem unfair in individual cases, but it is deliberately intended and serves to protect consumers.

Crafts businesses therefore urgently need to take action to avoid falling victim to these rules. There can be no “business as usual” in the hope that they will be spared. The large number of businesses that are still working without instruction is alarming. In case of doubt, every single one of them risks their livelihood if a major order falls through and is revoked.

The solutions are readily available: With clear contractual documents, the right advice and a little discipline in order processing, the risks can be virtually eliminated. In 2025, no one who deals with this topic will have to face legal uncertainty. Use the findings from current case law as an opportunity to improve your processes. Your customers will appreciate transparent communication – and you yourself can sleep more soundly knowing that your wages are no longer hanging in the balance.

Finally, an appeal: Protect your business from payment defaults. Inform yourself, adapt your contracts and seek legal advice if in doubt. The investment is small, the benefits enormous. Don’t let your hard-earned craftsmanship end up being “given away” just because a piece of paper is missing. In 2025, the right of withdrawal may still be a challenge for tradespeople – but with the right tools, it is one that you can overcome.

Do you have any questions or need help with implementation? Contact us – we support tradespeople in working in a legally compliant and successful manner so that your cash flow is just as good as your performance. Stay informed and protect yourself, because prevention is better than cure!