The Right of Withdrawal in Consumer Contracts: A Comparative Analysis of American and European Law

Abstract

The aim of this paper is to compare the regulation of the right of withdrawal in US and European Law. Both coincide in granting the right of withdrawal to a special category of individuals, namely consumers, due to the situation of information asymmetry in which they find themselves vis-à-vis traders. In addition, the consumer can invoke this right when concluding particularly complex contracts (e.g., consumer credit contracts) or in those cases in which he is subject to pressure or the so-called “surprise factor” at the time of entering into the contract (e.g., door-to-door sales). However, beyond these coincidences, the European and US rights of withdrawal differ greatly in several aspects. To begin with, the European Union has been very generous and flexible when regulating this concept, while in the USA the legislation is quite a bit more restricted and limited. Hence, retail “return policies”, designed to offer consumers the option of returning merchandise for predetermined reasons within a stipulated period, play a vital role in understanding consumer withdrawal rights in the USA. These differences and many other issues will be addressed here with a view to determining whether US law might be used as a model to improve the regulation of the right of withdrawal in the EU.

Keywords: Right of Withdrawal, Return Policies, Contracts, Consumers, Consumer Protection Law, US Law, Comparative Law, European Directives