For the legislation currently in place, it has not yet been decided by Germany’s highest civil court, the Federal Court of Justice (Bundesgerichtshof, “BGH”), which causes uncertainty in practice and in legal publications.

The question is of vital importance for leasing companies: If section 506 para. 2 BGB was to be applied to leasing contracts with mileage allowance, it would entail the obligation to adhere to a strict set of consumer protection provisions. It would mean that companies have to conclude contracts in writing (section § 492 BGB) and are under the obligation to provide their contractual partners with a broad range of legal information regarding the contract (sections 491a, 493 BGB). Most importantly, consumers are given a right to withdraw from the contract regardless of any specific circumstances under which the contract was signed (section 495 para. 1, 355 BGB).

Pursuant to the wording of section 506 para. 2 BGB, the provision applies only to leasing contracts under which the consumer is liable for a certain value of the leased vehicle at the end of the leasing contract’s duration. Such value is defined upon the contract’s execution. Whether the leased vehicle’s actual value at the end of the contract matches such pre-determined residual value may not only be influenced by the condition of the vehicle but also by general developments in the car market and the overall economy.

A number of legal scholars and various courts have argued in the past that section 506 para. 2 BGB must also be applied to leasing agreements with mileage allowance by way of analogy (analoge Anwendung).

Recent Court Judgements

The recent judgments of the Regional Courts of Heilbronn (case no. 6 O 246/18) and Offenburg (case no. 3 O 426/18) as well as the court order of the Higher Regional Court of Munich (case no. 32 U 3419/19) have revived the debate.

In their recent decisions, the aforementioned courts held that the history of the statute and its legislative procedure as well as the differences in the business models of residual value leasing and leasing with mileage allowance indicate that the provision should not be applied. Furthermore, the Regional Court of Offenburg regarded the level of consumer protection necessary under a leasing contract with mileage allowance to be lower than in the case of a residual value leasing contracts. All three courts therefore did not apply the provision to mileage allowance leasing contracts. The consumers therefore were not granted a right of withdrawal.

Outlook

So, what are the takeaways? The aforementioned judgements have been given by regional courts and have not yet been confirmed by the BGH. Therefore, they do not yet provide an answer sufficient to quell the uncertainty in the market. It has to be further noted that other regional courts have not followed the same line of argumentation.

Against that background, it is understandable that some leasing companies decide to continue to adhere to consumer protection laws when executing a leasing contract with mileage allowance, even if these might in fact not be applicable. However, this approach bears the risk of such a clause being interpreted as a voluntary contractual offer to the consumer to grant a contractual right of withdrawal from the contract (vertragliches Widerrufsrecht) instead of a mandatory adherence to the information policies under consumer protection laws. Whether such interpretation can be assumed is currently a matter of dispute between the 11th and the 3rd chamber of the BGH. Leasing companies therefore have to weigh the risks of either approach.

We shall also note that a right to withdraw from the contract may also arise – regardless of the discussion above – from other circumstances. Consumers may under certain circumstances have a right of withdrawal, for instance, if the leasing contract is not signed in person at the car dealer or bank but rather solely as a “distance contract” by means of communication without the parties being simultaneously and physically present (Fernabsatzvertrag) in the context of a sales or service-provision scheme organised for distance sales.

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