PayPal business account restricted: when sellers can challenge withheld funds

The Dortmund case did not establish a general right to immediate payment

A ticket seller temporarily lost access to its PayPal account. The trigger was events with a connection to Cuba. In its judgment of 15 January 2016, 3 O 610/15, Dortmund Regional Court prohibited further restrictions on the specific grounds described in its operative order: US embargo rules conflicting with EU requirements. It did not rule that PayPal must maintain every seller’s account indefinitely or pay out every balance immediately.

In assessing urgency, the court considered the threat to the business and the importance of this payment channel. The account before the court involved more than EUR 50,000. Alternative payment methods did not fully offset the disruption (paras. 24 to 26). These were interim proceedings in 2016, not a new decision about today’s reserve terms. The court considered termination of the contract separately (paras. 35 to 36).

An account restriction, an individual payment hold or a reserve?

PayPal distinguishes account limitations, payment holds and reserves. A rolling reserve withholds a proportion of incoming payments and releases it later. A minimum reserve concerns a specified minimum balance. PayPal explains that the reserved money still belongs to the seller but is initially unavailable. This description of the provider’s system does not establish whether a particular measure was validly agreed and is justified.

Our practical assessment: a seller seeking payment of a remaining balance does not necessarily need the same strategy as a shop that must continue accepting payments. Start by listing available amounts, reserves, open buyer disputes and alleged counterclaims separately.

Why 180 days is not a universal answer

The German PayPal user agreement, displaying an update date of 7 September 2026, provides for risk-based holds and claims a right in certain cases to hold funds for more than 180 days. This establishes neither that every hold may last that long nor that every balance must automatically be released on day 181. The agreed version, the specific reason, the remaining risk and the amount withheld require assessment.

Missing documents can be decisive where identity or security checks are involved. A court order or separate foreign proceedings require a different assessment from an internal reserve decision. The contracting entity, account country, choice of law and jurisdiction terms therefore belong in the initial review.

When interim proceedings may be appropriate

Section 940 of the German Code of Civil Procedure permits interim measures, including measures to avert substantial disadvantages. The proceedings must establish both a claim and urgency. An account balance alone does not explain urgency. Useful evidence includes a liquidity statement, immediately due wages or supplier invoices, and why other funds cannot bridge the gap.

Our own example: EUR 5,000 is blocked. That may be inconvenient for a well-funded business; for a small seller it may affect obligations falling due immediately. The amount alone therefore determines neither whether interim proceedings are appropriate nor whether they will succeed. A demand for payment, like a demand to lift an account limitation, needs its own justification.

Deadlines continue after an injunction is granted

The subsequent Dortmund proceedings illustrate the procedural risks. On 7 March 2016, the court refused a fresh application for interim relief because the applicant had itself missed the deadline for giving effect to the original injunction, undermining its claim of urgency (3 O 69/16, paras. 15 to 17). This did not amount to general approval of the restriction.

Implementation of the injunction and further procedural steps must therefore be planned from the outset. Under § 945 of the German Code of Civil Procedure, an injunction that was unjustified from the outset may also give rise to liability for damages. Costs and liability risks form part of the decision about how to proceed.

Documents sellers should prepare

Save the full notification and the history of the matter before information becomes unavailable in the account. Describe your objective precisely: continuing to sell, challenging a specific reserve or obtaining payment of a specified amount.

• Account country, contracting entity, restriction date and full explanation.
• Balance statement, reserve notice, payout reports and chargebacks.
• Documents already submitted, complaints and PayPal’s responses.
• Specific financial consequences and any court documents received.