How to withdraw from a purchase contract correctly

Starting point

The buyer's right to withdraw from the contract under Section 437 No. 2 BGB in conjunction with Sections 440 and 323 BGB generally requires, under Section 323(1) BGB, that the buyer has previously set the seller a reasonable period for supplementary performance (Section 439 BGB) without success.

A valid demand for supplementary performance from the buyer must, in the BGH's settled case law, include not only setting a deadline but also the buyer's readiness to make the purchased item available to the seller for inspection of the alleged defects at the right place, namely the place of performance for supplementary performance (see also Section 439(5) BGB in the version effective from 1 January 2022; on this BT-Drs. 19/27424, p. 26 et seq.). This is meant to allow the seller to check the sold item: whether the alleged defect exists, whether it was already present at the time risk passed, what its cause is, and whether and how it can be remedied. The seller is therefore generally not required to engage with a demand for supplementary performance before the buyer has given the seller the opportunity for such an inspection, see BGH, judgment of 30 March 2022 – VIII ZR 109/20.

The place of supplementary performance in sales law is determined by the general rule in Section 269(1) and (2) BGB, see the foundational decision BGH, judgment of 13 April 2011 − VIII ZR 220/10. Where the contract does not address the place of performance, the specific circumstances, particularly the nature of the obligation, are decisive. Where those do not yield a clear answer, the place of performance is ultimately at the place where the seller had its business establishment at the time the contract was concluded, see BGH, judgment of 19 July 2017 – VIII ZR 278/16.

Practical recommendations

1. In contracts for the sale or supply of goods, regulate not only the place of performance but also the place of supplementary performance. A blanket rule (for example, always at the seller's location) is not the right approach; the place should be defined on a case-by-case basis. This avoids unnecessary disputes, costs, and risks in warranty scenarios.

2. From the buyer's side, also make sure to make the item available to the seller for supplementary performance, see Section 439(5) BGB.

3. Finally, the demand to remedy the defect has to be drafted carefully. Otherwise no effective deadline for supplementary performance is triggered.

Reference: Poleacov, P. (2025). How to withdraw from a purchase contract correctly. INN.LAW. https://inn.law/en/perspectives/cancellation-of-purchase-agreement/

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