Liability for Non-Availability of Internet Banking Services

First Published: January 17, 2001

By Susanne Wagner*

In a landmark ruling on December 12, 2000, the Bundesgerichtshof as the top court for civil and criminal claims in Germany found in favor of consumers that liability for the non-availability of internet banking services cannot be entirely excluded. The decision followed a complaint by a consumer protection group in Berlin, Verbraucher-Zentrale Berlin e.V., against a bank, Postbank. The Court decided that a bank may not exclude completely its liability for the temporary unavailability of its internet banking service that results from technical or business issues.

The subject of the controversy was a clause in the general terms of a consumer contract used by Postbank which states:

Technical problems or problems within the enterprise may restrict temporarily or interrupt the access to the internet banking service. They can have their cause in Acts of God, changes and improvements of the technical equipment or other measures, e.g. service and repair which are inevitable for a faultless or optimized internet service of the bank, or events whatever, e.g. overuse of the telecommunication networks.

With this provision, Postbank had attempted to limit its liability for the non-availability of its internet banking service. It recognized the potential harm to consumers who may not gain access to the banking service when they need it.

Such general terms are known as Allgemeine Geschäftsbedingungen, AGB. They supplement the main terms of a contract which identify the parties and their main obligations. The AGB terms describe the specifics of the contract and contain standard provisions. As these supplementary terms are imposed by one party and are not negotiable, the law requires that consumers be protected against overbearing by the drafting party. The federal statute on general terms, Gesetz der Allgemeinen Geschäftsbedingungen, AGBG, enacted December 9, 1976, Schönfelder no. 26, provides protection by establishing standards for such terms similar to the tests for contracts of adhesion or unconscionable contracts in American law.

In this case, the Court held for the plaintiff who prayed that the first sentence in the above provision be declared void and Postbank be ordered to cease and desist from using it. The court found the clause to be overbroad. It would not serve to describe just certain circumstances of facts but would restrict the express promise of 24 hour-availability of the banking service. While the bank warrants to afford around the clock accessibility, it illegally limits this main obligation under the contract through its AGBs. Such an provision would violate section 11 number 7 AGBG which prohibits the exclusion of liability for intentional or gross negligence.