Changes in the German sale of goods law from 2022 (implementation of the European Sale of Goods Directive)

In order to implement the so-called Sale of Goods Directive (EU) 2019/771, the Bundestag [1] passed the Act on the Regulation of the Sale of Goods with Digital Elements and Other Aspects of the Sales Contract ("Gesetz zur Regelung des Verkaufs von Sachen mit digitalen Elementen und anderer Aspekte des Kaufvertrags") on 25 June 2021. The Sale of Goods Directive replaces the Consumer Sales and Guarantees Directive (1999/44/EC). The amendments apply to contracts concluded on or after 1 January 2022. In addition to central aspects such as the concept of material defects under sales law, sales contracts in the sense of Sec. 474 (1) sentence 1 BGB (German Civil Code) are particularly affected.

 

I. Amendment of the concept of material defects

The concept of a material defect is changed by the implementation of the Sale of Goods Directive: Goods are only free of defects if they meet the subjective requirements and the objective requirements for conformity as well as and the instruction requirements at the time of the passing of risk. This means that all requirements must be fulfilled, whereas previously individual agreements, i.e. subjective requirements, took precedence. Therefore, sellers must continuously check whether the products still comply with the usual quality. Warranty claims can be prevented by a negative agreement on quality. In sales contracts, this requires an express and separate agreement, Sec. 476 (1) sentence 2 BGB. A clause in general terms and conditions does not meet the high requirements for such an agreement.[2]
 

II. Consumer contract for digital products

The consumer contract on digital products is introduced as a new type of contract. Sec. 327 ff. BGB set down separate warranty rights for digital products. "Digital products" according to Sec. 327 (1) BGB include both digital content and digital services. Sec. 475a BGB supplements the regulations in the case of a sales contracts on digital products and refers to parts of the regulations on classical sales contracts.
 

III. Purchase of a good with digital elements

A distinction must be made between the purchase of goods with digital elements and the purchase of digital products. Sec. 475b-475e BGB contain supplementary regulations for the purchase of consumer goods of a good with digital elements. The regulations concern physical objects that contain digital products or are connected to them and cannot fulfil their function without the digital elements. This applies if the provision of digital elements was expressly agreed in the contract or if this results from the purpose of the item.
Accordingly, if the goods contain digital elements, supplementary provisions on material defects apply. Among other things, the seller must provide the agreed updates for the digital elements if they are necessary to maintain its functionality. If the consumer fails to provide an update in due time, the seller is not liable for material defects resulting from the missing update, Sec. 475b (5) BGB. The duration and scope of the updates to be provided are subjectively determined by the contractual agreement. In order to meet the objective requirements as well, updates must be provided at least during the period to be expected based on all circumstances. The period depends, for example, on advertising statements of the seller as well as the usual duration of use and application of goods of the same kind. The duration may exceed the warranty period of two years in individual cases, which is conceivable in particular for security updates. The provision is intended to ensure that the functionality of the respective product is also guaranteed after transfer of risk in order to extend the goods´ usability. A contractual exclusion of these updates is also possible if a consumer is involved, but requires an express agreement.

In addition, the consumer must be informed about newly appearing updates.[3] The information must also refer to the consequences of a failure to update. There are no precise requirements for the way to inform the consumer. The update and thus the information must be provided to the consumer so that he can update the information himself.
 

IV. Easier termination options for consumers

In the event of defects of goods, consumers can terminate under facilitating circumstances. For example, the termination of sales contracts for goods with digital elements is possible in certain cases even without setting a deadline, Sec. 475d (1) BGB. Among other things, no express deadline needs to be set if the seller does not provide subsequent performance within a reasonable period of time despite being informed of the defect.
The seller must also refund the purchase price paid as soon as the consumer proves that the goods have been returned, Sec. 475 (6) BGB. According to the previous legal situation, the consumer had to prove that the goods had been returned, i.e. that they had been received by the seller.
 

V. Limitation period for remedies

The reduction of the limitation period for liability for defects to one year in the sale of second-hand goods is no longer possible by means of general terms and conditions. Rather, an express agreement is required, which must meet high standards.

In future, the limitation period for remedies will be suspended in favour of consumers if a defect only becomes apparent shortly before the end of the limitation period or if the consumer has handed the good over to the seller for subsequent performance. The statute of limitations for claims due to defects of goods will not expire before four months after the defect has first become apparent, Sec. 475e (3) BGB, or not before two months after handing over the goods to the seller for subsequent performance, Sec. 475e (4) BGB.
Another innovation results from the introduction of the type of contract for goods with digital elements: In such contracts, the limitation period for defects of the digital elements is to be assessed separately from the limitation period for defects of the goods themselves.
 

VI. Commercial guarantees

The requirements of Sec. 479 BGB for declarations of commercial guarantee to consumers have also been adapted. The guarantor must inform the consumer that the use of the legal rights is not limited by the guarantee and that this use is free of charge, Sec. 479 (1) no. 1 BGB. Even without a request by the consumer, the guarantee statement must be provided to the consumer on a durable medium at the latest at the time of the delivery of the goods. Provision by e-mail is sufficient, whereas mere posting on the website is not. The statutory minimum content of a commercial guarantee of durability assumed by the producer within the meaning of Sec. 443 (2) BGB was introduced: Pursuant to Sec. 479 (3) BGB, the producer must repair or replace the goods in any case.
 

VII. Further new regulations in (consumer goods) sales law

In sales contracts, the consumer is able to assert material defect rights even if he is aware of the defect at the time of conclusion of the contract, Sec. 475 (3) sentence 2 BGB. The warranty is only excluded if the consumer was specifically informed before conclusion of contract that a certain characteristic of the goods deviates from the nominal quality and the deviation was expressly and separately agreed in the contract. The amendment is of particular importance in the sale of defective copies.
The statutory reversal of the burden of proof regarding the existence of a defect at the time of transfer of risk is extended. A defect is presumed in favour of the consumer if it becomes apparent within one year of delivery, Sec. 477 (1) BGB. In the case of goods with digital elements, this presumption even applies to the digital elements for a period of two years, Sec. 477 (2) BGB. Only in the case of the purchase of live animals does the previous period of six months apply.
Further obligations of the seller are expressly regulated in the law for all purchase contracts. For example, the seller must take back the replaced good at his own expense, Sec. 439 (6) BGB. It is now regulated that the seller may require buyers to make the apparently defective item available for a defect inspection before subsequent performance, Sec. 439 (5) BGB. In addition, vis-à-vis consumers, the seller must carry out the supplementary performance within a reasonable period of time after being informed of the defect and without significant inconvenience to the consumer.
The seller may refuse to bring the goods into conformity if repair and replacement are impossible or would impose disproportionate costs on the seller, even if only one type of subsequent was possible. The current Sec. 475 (4) and (5) BGB, which excludes the refusal in such cases, will be deleted without replacement.
 

VIII. Adjustment of the right of redress

As a consequence of the changes to the seller's obligations, the seller's recourse in the chain of transactions pursuant to Sec. 445a BGB is slightly adjusted. A substantive extension results from the fact that the right of redress covers redemption costs as a result of the new delivery pursuant to Sec. 438 (6) sentence 2 BGB. In addition, the supplier must reimburse expenses that the seller has to bear in connection with a breach of the newly introduced obligation to update pursuant to Sec. 475b (4) BGB. An analogous application of Sec. 445a BGB is discussed for the liability for the lack of provision of digital elements. [4]
Additionally, the seller's redress claims become time-barred at the earliest two months after the seller has fulfilled the remedies of its buyer.
 

IX. Need for adaptation and contact

When implementing the changes, a distinction must be made between old and new contracts. Future contracts must be adapted to the new concept of material defects. In the area of digital products or goods with digital elements, updating and information obligations must be taken into account. Adverse deviations from the regulations vis-à-vis consumers are largely inadmissible and will not withstand a general terms and conditions review. In the context of the right of redress, adjustments must also be made to contracts in the chain of transactions.
Further relevant current changes result from the "Omnibus" Directive [(EU) 2019/2161], which was implemented by two national laws ("Gesetz zur Stärkung des Verbraucherschutzes im Wettbewerbs- und Gewerberecht"and "Gesetz zur Änderung des Bürgerlichen Gesetzbuchs vom 10. August 2021", as well as from the national Fair Consumer Contracts Act ("Gesetz für faire Verbraucherverträge"). You can find an overview of each of these on our website at Implementation of the 'Omnibus' Directive into German Law and at New Fair Consumer Contracts Act. The implementation of the "Omnibus" Directive affects in particular the right of termination in contracts for services and digital content as well as model termination instructions and forms. The Unfair Competition Act ("Gesetz gegen den unlauteren Wettbewerb") is also affected by the changes - in particular, fines for infringements have been introduced. The Fair Consumer Contracts Act strengthens the position of consumers by declaring prohibitions of assignment as well as automatic contract renewal clauses in general terms and conditions inadmissible and facilitating the termination of continuing obligations.

If you have any questions about the impact of the numerous changes or about any need to adapt the model contracts and general terms and conditions used in your company, please contact Sara Bandehzadeh (sara.bandehzadeh@fieldfisher.com).