TestAS · Economics
Reading a rule or a short legal text and applying it to a case, without prior legal knowledge.
testas.de lists this topic for the Economics module. In the test it comes as testlets: a short text, table or formula, then 4 to 8 questions you answer from it.
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Full exam-length testlets from the Kollego course, generated the same way as our mocks. Answer from the material, then open each answer to check.
Buying online: the right of withdrawal
When consumers buy goods online, by telephone or by mail order, they cannot inspect the goods before concluding the contract. European and German law therefore grants consumers a special right of withdrawal for such distance contracts, which are contracts between a business and a consumer concluded exclusively by means of distance communication. The right does not apply to contracts between two businesses or between two private persons.
The consumer can withdraw from the contract within 14 days without giving any reason. For the sale of goods, the period begins when the consumer, or a person named by the consumer, receives the goods. The consumer must declare the withdrawal clearly, for example by letter or e-mail; simply returning the goods without any statement is not sufficient under German law, although in practice many sellers accept it. It is enough to send the declaration within the period. If the seller did not inform the consumer properly about the right of withdrawal, the period is extended, but it ends at the latest twelve months and 14 days after it would normally have begun.
After a withdrawal, both sides must return what they have received. The seller must refund the purchase price, including the standard delivery costs, within 14 days, and may withhold the refund until the goods have been returned or the consumer has proved that they were sent back. The consumer bears the direct cost of returning the goods if the seller informed them of this in advance. If the consumer used the goods beyond what is necessary to examine them, as one could in a shop, they must pay compensation for the loss in value.
The law also lists exceptions. There is no right of withdrawal for goods made to the customer's specifications, for perishable goods, for sealed goods that are unsuitable for return for health or hygiene reasons once the seal has been removed, and for sealed audio, video or software recordings once the seal has been broken. For digital content, such as a downloaded game, the right expires when the seller begins delivery with the consumer's express consent and acknowledgement that the right will be lost.
The right of withdrawal must be distinguished from the statutory warranty for defects. Withdrawal requires no defect but must be exercised within 14 days; the warranty applies only if the goods are defective, but lasts two years for new goods.
| No. | Purchase |
|---|---|
| 1 | A jacket received on 3 March; the consumer sends a withdrawal e-mail on 15 March and the jacket on 20 March. |
| 2 | A made-to-measure suit, sewn to the customer's measurements. |
| 3 | A pair of shoes that the consumer wore outdoors for a week before returning them. |
| 4 | A laptop bought by a company from an online retailer. |
1. Was the withdrawal in case 1 made in time?
A: Yes, because the declaration was sent within 14 days
The period of 14 days starts on receipt, 3 March, so it ends on 17 March. The text says it is enough to send the declaration within the period; the e-mail of 15 March was in time, even though the jacket came back later.
2. Can the consumer withdraw from the purchase in case 2?
D: No, goods made to specifications are excluded
The text says there is no right of withdrawal for goods made to the customer's specifications. A suit sewn to the customer's measurements is such a good, so withdrawal is excluded.
3. What applies in case 3?
D: Withdrawal is possible, but the consumer must compensate the loss in value
Wearing shoes outdoors for a week goes beyond examining them as in a shop. The text says the consumer then must pay compensation for the loss in value, but the right of withdrawal stays.
4. Why is there no statutory right of withdrawal in case 4?
A: The buyer is a business, not a consumer
The text says the right does not apply to contracts between two businesses. The laptop was bought by a company, not a consumer, so there is no statutory right.
5. Within what time must the seller refund the price after a withdrawal?
A: 14 days, but it may wait until the goods are returned
The text says the seller must refund within 14 days and may withhold the refund until the goods are returned or proof of sending is given. So 14 days, with a right to wait for the return.
6. How does the right of withdrawal differ from the warranty for defects?
D: Withdrawal needs no defect but has a short period
The text says withdrawal needs no defect but must be used within 14 days, while the warranty needs a defect and lasts two years for new goods. So withdrawal needs no defect but has a short period.
Choosing a legal form for a start-up
Founders in Germany must choose a legal form for their business. The choice affects who is liable for the firm's debts, how much capital is needed, how decisions are made and how profits are taxed.
The simplest form is the sole proprietorship (Einzelunternehmen). One person owns the business, takes all decisions and keeps all profits, but is liable for all its debts with his or her entire private wealth. When two or more people run a business together without choosing another form, they automatically form a civil-law partnership (GbR). Its partners are also personally liable for all debts, jointly and without limit, so a creditor can demand the whole amount from any one of them. Merchants who run a commercial business together can form a general partnership (OHG), which has the same unlimited liability. In a limited partnership (KG), at least one general partner is liable without limit, while the limited partners are liable only up to the amount of their agreed contribution.
Corporations limit liability to the company's own assets. The most common is the GmbH, a private limited company. It needs share capital of at least EUR 25,000, of which at least EUR 12,500 must be paid in before registration, and it is managed by one or more managing directors. A variant for founders with little capital is the UG (haftungsbeschränkt), which can be founded with as little as EUR 1. However, it must set aside a quarter of its annual profit each year until its capital reaches EUR 25,000, when it can convert into a GmbH. The stock corporation (AG) needs at least EUR 50,000 of share capital and has three bodies: the management board runs the company, the supervisory board appoints and monitors the management board, and the general meeting of shareholders decides on basic matters such as the use of profits. Shares of an AG can be listed on a stock exchange.
Limited liability is not absolute. Banks often demand personal guarantees from the owners of small corporations, and managing directors can be personally liable if they breach their duties, for example by delaying an insolvency filing.
| Founder | Situation |
|---|---|
| Lena | Opens a translation office alone; wants to keep it simple and has no significant risks. |
| Tom and Jana | Start a café together without any contract or registration. |
| Mehmet | Starts an app company with EUR 500 and wants limited liability. |
| Firm Z | Wants to raise money from thousands of investors via the stock exchange. |
1. Which legal form do Tom and Jana have?
D: A civil-law partnership (GbR)
The text says two or more people running a business together without choosing another form automatically form a GbR. Tom and Jana run a café together with no contract or registration, so they have a GbR.
2. A supplier of the café is owed EUR 8,000. What can it demand from Jana alone?
A: The full EUR 8,000
GbR partners are liable 'jointly and without limit, so a creditor can demand the whole amount from any one of them'. So the supplier can demand the full EUR 8,000 from Jana alone.
3. Which form suits Mehmet best?
D: A UG (haftungsbeschränkt)
Mehmet has only EUR 500 but wants limited liability. A GmbH needs at least EUR 25,000, while the UG can be founded with as little as EUR 1, so the UG fits.
4. What must Mehmet's company do with its profits under this form?
D: Retain a quarter each year until capital reaches EUR 25,000
The text says the UG must set aside a quarter of its annual profit each year until its capital reaches EUR 25,000. So Mehmet's company must retain a quarter every year until then.
5. Which body of an AG appoints and monitors the management board?
A: The supervisory board
The text says the supervisory board 'appoints and monitors the management board'. The general meeting decides basic matters such as the use of profits, not the board's appointment.
6. In a KG, who is liable without limit?
C: At least one general partner
The text says in a KG at least one general partner is liable without limit, while limited partners are liable only up to their agreed contribution. So unlimited liability lies with at least one general partner.
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