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.
Not sure if you can withdraw from the contract? We can help you assess the specific contract and prepare the right withdrawal to be legally effective.
Withdrawal from a contract is generally regulated by the provisions of the Civil Code. There must always be a reason for a valid withdrawal from a concluded contract, and a contract cannot be withdrawn at the arbitrary will of the parties.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.
On more than one occasion we have dealt with a situation where a client withdraws from a contract but the other party refuses to refund the amount paid, stating that it does not consider the withdrawal to be justified. In such cases, it is crucial to correctly articulate the reason for the withdrawal and to prove that there has been a material breach of contract. At the same time, the most common mistake is that people simply notify the withdrawal by phone or email without proof of delivery.
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:
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 find 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.
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.
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.
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.
A typical example would be ordering goods through an e-shop and not liking them when they are delivered. You can return such goods. However, you will be responsible for the costs of shipping. In exceptional cases, the right of withdrawal cannot be exercised, for example for:
Sellers or suppliers often use legal loopholes or ask clients for things they are not entitled to. We’ll handle the withdrawal for you so that you don’t lose out in the end.
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 there is an act of withdrawal. 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.
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.
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. If the trader has not informed the consumer of the conditions for withdrawal before the contract is concluded, the consumer is not obliged to pay the pro rata share of the service.
These situations can be complex and involve many legal wiggles. We will be happy to tailor a solution to your case.
This is not possible in most normal contracts. You can only withdraw if the law or the contract itself allows it. The main exceptions are consumer contracts concluded at a distance or outside the business premises of the trader – for example, purchases made through an e-shop. In this case, the consumer can withdraw within 14 days without giving a reason.
Withdrawal from the contract cancels the contract from the very beginning as if it had never been made. The parties must therefore repay to each other everything they have provided to each other under the contract. By contrast, termination of a contract only terminates the contract in the future – that is, from the moment of termination or after the expiry of the notice period.
If the other party claims that the withdrawal is not justified, the dispute may end up in court. In this case, it is crucial to prove that there was a legal or contractual reason for the withdrawal (for example, a material breach of contract). It is also important to prove that the withdrawal was properly served on the other party.
Yes, but only if the law or the nature of the contract allows it. Partial rescission may be an option, for example, if the contract is divisible and the breach relates to only a certain part of the performance. However, if partial withdrawal would not make sense or would disrupt the whole contractual relationship, it may be necessary to withdraw from the contract as a whole.
The law does not usually set a fixed time limit, but the withdrawal must be made without undue delay after you become aware of the breach. If you delay for a long time, the other party may argue that you have effectively accepted the contract despite the breach.
Yes, the parties may modify or limit certain grounds for withdrawal directly in the contract. However, it is not possible to exclude those withdrawal rights that the law grants by mandatory terms – for example, the consumer’s right to withdraw from a distance contract within 14 days.
It is safest to send your withdrawal by registered letter with acknowledgement of receipt or by data box. These methods allow you to prove when the withdrawal was delivered. With email, proving delivery can be more difficult if the other party does not acknowledge receipt.
Our team of experienced attorneys will help you solve any legal issue. Within 24 hours we’ll evaluate your situation and suggest a step-by-step solution, including all costs. The price for this proposal is only CZK 690, and this is refunded to you when you order service from us.
Have you received a defective product and want to withdraw from the purchase contract? Are you dissatisfied with the work of the craftsman and would like to terminate the contract? Or are you no longer satisfied with your insurance company's service? The new Civil Code offers several ways to get out of contracts.
In person and online. Just choose the appropriate service or opt for an independent consultation when you are unsure.
