Legal Grounds for Withdrawing from a Sales Agreement
Withdrawing from a sales agreement is a legal remedy that releases parties from their contractual obligations. In Estonia, this process is governed by the Law of Obligations Act (VÕS). Withdrawal is primarily permitted when the other party has committed a fundamental breach of contract (VÕS § 116).
When is withdrawal permitted?
A breach is considered fundamental if it deprives the aggrieved party of what they were entitled to expect under the contract. Withdrawal is justified if:
- The other party fails to perform their obligation even after an additional period for performance has been granted (VÕS § 114).
- The breach is intentional or due to gross negligence.
- The other party explicitly refuses to perform their obligations.
How to submit a notice of withdrawal?
Withdrawal is effected by sending a notice to the other party (VÕS § 188). The notice must be clear and unambiguous. We strongly recommend sending it in a format that can be reproduced in writing (e.g., email) to ensure you have evidence in case of a dispute. Upon withdrawal, both parties are released from their obligations, and any performance already rendered must be returned according to the rules of unjustified enrichment (VÕS § 189).
Important Limitations
It is crucial to note that the right to withdraw cannot be exercised if the breach is insignificant or if the contract has already been fully performed. Furthermore, consumers have a specific right to withdraw from distance contracts within 14 days under VÕS § 56.
Do you need assistance in analyzing your contract or drafting a notice of withdrawal? Our experienced lawyers are ready to assist you. Contact Legal Aid 24 today for a personalized analysis of your unique situation!