Guide · As of 2026

Contract term, price guarantee and bonus: reading contracts properly

A low price alone does not make a good offer. The contract term, notice period, price guarantee and the conditions for a bonus also matter. This guide explains the legal rules for electricity and gas contracts and shows you how to recognise a fair offer.

By Mahdi Barzkar, MB Finance · Updated: 23 October 2026

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24 months maximum
1 month's notice
Cancellation button
14-day withdrawal
Bonus

Contract term and cancellation: the legal limits

Stricter rules from § 309 Nr. 9 BGB apply to contracts concluded since 1 March 2022. They cover contracts whose terms the supplier has pre-written, which means practically all electricity and gas contracts for households.

Rule	What applies?	Legal basis
Initial contract term	no more than 24 months	§ 309 Nr. 9 a BGB
Notice period for the end of the initial term	no more than 1 month	§ 309 Nr. 9 c BGB
Automatic renewal	only for an indefinite period, after that you can cancel at any time with no more than 1 month's notice	§ 309 Nr. 9 b BGB
Basic supply (Grundversorgung)	can be cancelled at any time with 2 weeks' notice	§ 20 StromGVV and GasGVV
Moving house with a special contract (Sondervertrag)	cancellation with 6 weeks' notice, unless the supplier offers to continue supplying you at your new address on the existing terms	§ 41b Abs. 5 EnWG
One-sided contract change, e.g. a price increase	cancellation without notice	§ 41 Abs. 5 EnWG

For contracts concluded before 1 March 2022, the old rules may still apply, for example a renewal for one year. You can find the next possible cancellation date on your bill.

Cancellation button, withdrawal and contract summary

If you can sign a contract on a website, the supplier must also offer a cancellation button (Kündigungsbutton) there since 1 July 2022, for example labelled „Verträge hier kündigen“ (“cancel contracts here”) (§ 312k BGB). It leads to a confirmation page with a button such as „jetzt kündigen“ (“cancel now”). The supplier must confirm receipt of the cancellation electronically straight away. If the button is missing, you can cancel the contract at any time without notice.

If you sign a contract by phone, online, by video call or at your front door, you as a consumer have a 14-day right of withdrawal (Widerrufsrecht). For electricity and gas, the period starts when the contract is concluded, provided you were correctly informed of this right (§ 356 Abs. 2 BGB). You do not need to give a reason. If you expressly asked for supply to start during the withdrawal period, you pay for the energy supplied up to the withdrawal (§ 357a Abs. 2 BGB).

After the contract is concluded, the supplier must give you a short contract summary (Vertragszusammenfassung), including prices, the expected start date of supply, the notice period and bonus agreements (§ 41 Abs. 4 EnWG). If you cancel a special contract, the supplier must confirm the cancellation in text form (Textform) within one week (§ 41b Abs. 1 EnWG).

New-customer bonus and instant bonus: the conditions

Bonuses make an offer cheaper in the first year. What matters are the conditions in the small print.

New-customer bonus

A one-off amount that is often only paid out after twelve months of supply or offset against the first annual bill. If the contract ends earlier, you may lose it.

Instant bonus

According to the consumer advice centre (Verbraucherzentrale), it is usually paid out about 60 days after supply starts. If you do not reach an agreed minimum consumption, it can be deducted again with the annual bill.

Percentage bonus

It often only applies to part of the costs, for example the unit price (Arbeitspreis). Work out what it is worth in euros.

Bonus on the monthly instalments

The bonus is spread across the monthly instalments (Abschläge) of the first year of supply. This means the monthly instalments may rise from the second year, even without a price increase.

Typical traps

Supply often starts later than the contract. If you cancel exactly after twelve months of contract term, you may then have too little time of supply to get the bonus. Some suppliers only pay genuinely new customers. In advertising, the bonus is often already included in a monthly price.

Example calculation: year 1 and year 2

A bonus usually only has an effect in the first year. The example shows why you should compare both years. The prices are assumed and rounded. They are not real tariffs.

Example with 2,500 kWh a year	Tariff A with bonus	Tariff B without bonus
Unit price	34 ct/kWh	30 ct/kWh
Standing charge	€12 a month	€13 a month
Bonus, one-off	€150	–
Costs in year 1	€844	€906
Costs in year 2	€994	€906
Total after 2 years	€1,838	€1,812

Calculation: 2,500 kWh × unit price + 12 × standing charge − bonus. Tariff A is only cheaper in the first year. If you do not switch after one year, you pay less over two years with tariff B.

Good signs and warning signs

Good signs

Initial contract term of no more than twelve months, as recommended by Verbraucherzentrale Hamburg
Price guarantee for at least the whole initial term
Monthly instalments instead of prepaying for many months
Clear bonus conditions, ideally confirmed in writing
Complete legal notice (Impressum) and a customer service that you can reach

Warning signs

Prepayment (Vorkasse) for several months or a whole year: if the supplier becomes insolvent, the money may be lost.
A deposit or payments before supply starts. In a special contract, a payment agreed when the contract is concluded may not be due before supply starts (§ 41b Abs. 3 EnWG).
Long contract term without a real price guarantee
A very low price that only comes from a high bonus
Pressure by phone or at your front door to agree immediately
Calls that ask for your meter number or contract details even though you do not want to switch

Switching supplier: now fast and free of charge

Since 6 June 2025, the technical switch of electricity supplier has been completed on any working day within 24 hours (Bundesnetzagentur). Since 1 January 2026, § 20a EnWG has also required this for gas. There, the technical processes are still being adapted; the entire switching process may take no more than three weeks.

The faster switch does not change your contract deadlines. The notice periods and terms of your old contract still apply. The new supplier usually cancels the old contract for you. For this, it needs your authorisation. For a special termination after a price increase, it is better to cancel yourself.

Cancelling and switching are free of charge for household customers. Electricity and gas continue to flow in any case: if there is a gap, the default supplier (Grundversorger) supplies you.

MB Finance arranges electricity and gas contracts from several suppliers that we work with. The supplier pays us a commission for arranging the contract; you pay nothing extra for advice and arrangement. We discuss the contract term, price guarantee and bonus conditions with you before you decide.

Checklist: how to recognise a good offer

Annual consumption from your last bill used
Unit price and standing charge compared, not just the monthly instalment
Costs in the first and second year calculated, once without the bonus
Initial contract term and notice period checked
Scope and duration of the price guarantee checked
Bonus conditions read and saved, for example as a screenshot
No prepayment and no deposit
Contract summary and order confirmation compared with the offer
Cancellation date for the next comparison noted in your calendar

Frequently asked questions

How long can an electricity or gas contract run?

The initial term may be no more than 24 months. For contracts from 1 March 2022 onwards, the contract is then only renewed for an indefinite period and can be cancelled with no more than one month's notice (§ 309 Nr. 9 BGB).

Will I get the bonus if I cancel after one year?

That depends on the conditions. Many bonuses require twelve months of supply, not twelve months of contract term. Clarify this before you sign the contract and ideally get it confirmed in writing.

What can I do if the bonus is not paid out?

Check your annual bill. If the bonus is missing, request it in writing with a deadline and enclose the conditions you saved. If that does not help, you can contact the consumer advice centre or the energy arbitration board (Schlichtungsstelle Energie).

Can I withdraw from a contract that I signed by phone?

Yes. As a consumer, you have a 14-day right of withdrawal for contracts concluded by phone, online or by video call. For electricity and gas, the period starts when the contract is concluded, provided you were correctly informed of this right.

Is a long price guarantee always good?

It protects you against price increases, but only as far as the guarantee goes. Check which components are excluded. Also keep in mind: with a long contract term you are tied in, even if market prices fall.

Do I have to cancel my old contract myself?

Usually not. The new supplier usually cancels for you. For a special termination or shortly before a renewal, you should cancel yourself in text form so that you do not miss a deadline.

Sources

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