Manufacturers and retailers must prepare now!
German sales law is being digitized. The focus is on consumer protection in e-commerce. There will soon be new requirements for manufacturers and retailers. These are in the Purchase of goods policy and the Digital Content Delivery Policy regulated.
What is changing and what can you do? — We'll tell you:
What's new?
- Update requirement
- Definition of a material defect
- prolonged reversal of the burden of proof
When do the changes come into force?
On June 25, 2021, the BGB reform was adopted. The new regulations apply to contracts that are concluded with consumers from January 1, 2022.
Our recommendation
Do you sell digital products and goods with digital elements? Then you must act now: Review and revise your contracts, warranty rights, liability, terms and conditions, etc. by 01.01.2022. Provide functional updates so that your digital product continues to be retained in accordance with the contract. You should also find out whether the new definition of a “material defect” has consequences for you.
We are happy to advise you
Our lawyers will help you with all questions relating to new contract law and your existing contracts. We draw up new contractual agreements with you and revise your currently used contract templates and terms and conditions. What precautions do you have to take to comply with the update requirement? What effects does the fundamental change in the concept of material defect have for you? We would also be happy to check this for you and advise you on all necessary measures.
What changes does the BGB reform bring?
1. New contract law for digital products
The requirements of Digital Content Delivery Policy apply to all contracts on the basis of which people can buy digital content and services for a fee. This includes streaming offers, cloud, social media or SaaS services, but also the provision of digital content via DVDs or USB sticks. The new contract law is therefore not just about buying online products. It also applies to the purchase of physical data carriers, which are not purchased for their own sake, but because of the software on them.
- Delimitation: If the software is not an important part of the product, many of the new regulations do not apply: for example, cars with navigation devices, digital cameras with software, smart TVs, etc. They are also referred to as goods with digital elements. These are therefore not affected, as this is primarily not about the digital elements at all.
Other payment methods available
This applies to contracts where consumers pay a price or promise to pay it. This can now also include cryptocurrencies or consumers' personal data in return. The latter is particularly interesting for social media services, as users there usually do not ask for any money.
2. Update obligation
Particular attention is paid to the update or update requirement: It requires sellers to provide updates for a “significant period of time”: Updates on functionality, security and compatibility (e.g. for new versions of an operating system) must therefore be offered.
It is therefore up to the sellers to ensure that the product is maintained in accordance with the contract. The update requirement also applies to the individual digital components of goods with digital elements (e.g. cars with navigation devices).
Securing through user contracts
The update requirement applies to sellers. However, it does not matter whether the latter are even (e.g. technically) able to provide updates. Therefore, if the sale is not carried out by the manufacturers, the sellers depend on the cooperation of the manufacturers. The update obligations must therefore be passed on in the supply chain. Sellers should therefore prepare for this in good time by making contractual adjustments.
No details yet for “relevant period”
It is not yet regulated by law what is meant by the “relevant period of time” in which updates must be made available. This is therefore based on the circumstances of the individual case. In particular, advertising messages, the price or the usual period of use of the item (life cycle) play a role. It can therefore be assumed that the courts will make an individual decision in each case.
Compulsory updates?
It is also currently unclear whether buyers or users can be required by sellers to install an (automatic) update — in the sense of a compulsory update. Users should now have the choice of whether they want to tolerate an offered update. However, not upgrading can pose significant risks. Against this background, it therefore seems appropriate to be able to agree on a user update obligation.
3. New definition of “defective” product
When does a product start to be defective? The rules have also been amended for this purpose: Before It was decisive for the absence of defects if the product met the agreed quality. It was therefore irrelevant whether the item was suitable for the use required under the contract or was of the usual nature. Now Must be different at the same time requisitions Be satisfied:
- Subjective requirements: The product must be designed as agreed in the purchase contract (agreed quality). The product must also be suitable for the contractually required use.
- Objective requirements: The product must be suitable for normal use and have the usual characteristics.
- Assembly requirements: The product was handed over with accessories, instructions and the necessary customer service (e.g. assembly).
If all three requirements are not met at the same time, the product can still be classified as defective even though it meets the contractually agreed quality.
These new requirements apply to both consumer and business contracts. There are no different definitions of the concept of material defect.
