The most important things you need to know about the new sales law

Since the beginning of the year, far-reaching changes in German sales law have come into force. The legislator has thus implemented the European requirements and adapted the German law on sales to the digital age. This article will give you an initial overview of the most important changes so that you can make the necessary adjustments to your sales processes and contracts. We provide you with valuable tips here.

The most important facts at a glance:

• New type of contract: With §§ 327 ff. BGB, the legislator has now specifically regulated the "contract for digital products" for the B2C sector.
• Adjusted definition of defect: The definition of defect in § 434 BGB was changed.
• (Even) stronger consumer protection: For the sale of consumer goods (§§ 474 ff. BGB), the legislator has further strengthened the level of consumer protection (e.g. reversal of the burden of proof of 1 year; obligation to update digital products; suspension of the expiry of the statute of limitations; special provisions for guarantees).

Contracts for digital products as a new type of contract

For consumer contracts (not B2B!) that have as their subject matter the provision of digital content or digital services (digital products) by the trader against payment, Sections 327 ff. BGB. The legislator has newly regulated extensive special provisions for this type of contract. In terms of structure and content, however, these are essentially the same as those of general consumer goods sales law and their legal treatment.

It should be noted that for consumer sales contracts for goods that are connected to digital products in such a way that the goods could not fulfil their functions without these digital products (e.g. smartphone with operating system), §§ 327 ff. BGB do not apply, but §§ 433 ff. BGB and §§ 474 ff. BGB. In the opposite case (e.g. vehicle with navigation service) §§ 327 ff. BGB and with regard to the goods (e.g. vehicle) §§ 433 ff. and §§ 474 ff. BGB apply.

Further information on the new digital products contract can be found here.

The defective purchased item from 1 January 2022

Due to the new version of § 434 BGB, in future an object of sale will be free of defects if it meets both the subjective (agreements on features, characteristics, use) and the objective requirements (usual suitability for use, usual condition of comparable products on the market, expected accessories and instructions, etc.). § 434 para. 3 BGB) are present. In deviation from the previous sales law, both of these must now be present in equal measure for the object of sale to be free of defects.

In practice, this means that you must always continuously check whether your own products (still) meet the usual market standards and if this is not the case, negative quality agreements (= agreement that the item does not fulfil a feature xy that is usually expected) must be made. In the B2B or C2C area this is possible without problems, but in the B2C area there are hurdles that you should prepare for. According to § 476 (1) sentence 2 BGB, negative quality agreements can only be made explicitly and separately and only after informing the consumer individually about the negative deviation of the product from the objective requirements. Negative deviations of the product can therefore no longer only be listed together with other characteristics in the product data sheet or in GTCs. In practice, it will therefore be advisable, if the worst comes to the worst, to prepare a separate annex for this purpose, to have it signed by the buyer and to include it in the sales contract by means of a reference. Although such an agreement is theoretically also possible tacitly, a written fixation is strongly recommended for reasons of evidence. In online trading, it will probably be necessary to proceed in the same way as with the inclusion of general terms and conditions with a separate box to click on including a link to the corresponding attachment. Of course, this is only ever necessary if a negative agreement on quality is also required. The first step here should therefore be to check the individual products against the market standards.

Costs of returning a defective item

What is new in the case of rectification or subsequent delivery of defective goods is that the costs of returning the defective goods must now be borne by the seller. This applies to all sales contracts, regardless of whether they were concluded between entrepreneurs (B2B) or between entrepreneurs and consumers (B2C).

Stronger consumer protection in §§ 474 ff. BGB

Central challenges for entrepreneurs lie in the new regulations of the law on the sale of consumer goods (§§ 474 ff. BGB) and the accompanying significant strengthening of consumer protection. More details in the following paragraphs.

Obligation to update the digital elements

What is new, among other things, for consumer goods purchase contracts for goods with digital elements is that the trader is now obliged to update the digital elements according to § 475b para. 2 bis BGB4, without being allowed to demand a renewed payment for this. If the trader does not comply with this obligation, the purchased item is defective and the consumer can assert warranty rights.

If the consumer omits the update or carries it out improperly, the trader is liable for this circumstance according to the new legal situation even if he did not inform the consumer beforehand about the availability of the update and the consequences of the omitted installation and the faulty installation is not based on faulty installation instructions. It is therefore essential to ensure in future that the necessary information is provided in order to avoid liability in these cases.

It should also be noted here that this obligation also and above all affects the manufacturer of such goods indirectly via the possible so-called supplier recourse. In this context, it is crucial that the supply contracts contain corresponding regulations for practical implementation. For example, it must be regulated who has to inform the consumer about available updates.

Consumer's knowledge of defects at the time of conclusion of the contract and their (new) consequences

A real surprise is the new version of Section 475 (3) of the German Civil Code, according to which, in the case of the sale of consumer goods, the consumer's positive knowledge of defects at the time of conclusion of the contract does not cause him to lose his warranty rights. This is only the case if the consumer was made aware of these defects and a separate negative quality agreement (see above) was made.

Warranty period - no more rigid warranty period

Further significant changes apply in the area of the statute of limitations. It remains possible to shorten the limitation period for second-hand goods to 1 year. However, as with negative quality agreements, this must now be agreed separately and expressly and with reference to the specific legal consequences. In this respect, a separate annex as part of the sales contract will also be useful for such agreements.

Furthermore, the law now also contains a so-called suspension of the statute of limitations. Whereas up to now all warranty claims for most movable goods were subject to a limitation period of 2 years from the date of handover (warranty period), the limitation period may now expire in individual cases after 2 years and 4 months. If a defect appears within the warranty period, the claims become time-barred at the earliest after four months from the first appearance of the defect. If, for example, the defect only appeared after one year and 11 months, the claims do not become time-barred after 2 years from the handover of the object of sale, but after 2 years and 3 months (1 year 11 months + 4 months).

Claims for defects after subsequent performance or after fulfilment of warranty work shall also become statute-barred at the earliest after 2 months from handover of the repaired goods, § 475e para. 4 BGB.

New requirements for guarantee declarations

Stricter requirements according to § 479 BGB (German Civil Code) now also apply to guarantees in consumer contracts. If guarantee declarations are issued, they must be adapted to the requirements. Otherwise, consumers are threatened with claims for damages, among other things.

Reversal of the burden of proof

The already existing reversal of the burden of proof in § 477 (1) BGB was raised to 1 year, unless this is incompatible with the nature of the defect or type of goods (e.g. perishable goods or wear and tear). Thus, if a defect in the object of sale becomes apparent within one year after handover, it is presumed that the defect already existed at the time of handover. If it is not possible to prove the contrary, the buyer has the possibility to assert his warranty rights.

The reversal of the burden of proof goes even further for goods with digital elements that are made available on a permanent basis. Here, the period is 2 years.

Recourse of the seller within the supply chain

In the course of the new regulations in consumer law, the recourse provisions were also adapted and expanded accordingly. It continues to apply that costs in connection with the warranty for products within the supply chain can be passed on upwards to the manufacturer. The previous maximum limitation period of 5 years was deleted without replacement.

So what to do now?

First of all, the existing contract models should be reviewed and adapted. With regard to the mandatory consumer provisions, it must first be examined whether the contract clauses contradict or possibly circumvent the provisions of §§ 474 ff. BGB or possibly circumvent them. In both cases, there would be a breach of the mandatory consumer protection provisions and you would not be able to invoke the relevant clause. Any shortening of the statute of limitations must be deleted or adapted accordingly in the B2C area, insofar as they concern claims for defects (excluding damages). Any warranty statements are to be adapted to the current minimum standards.

In addition, for dealings with consumers, the contract annexes addressed should be created and the processes adapted accordingly. If goods with digital elements or purely digital products are sold, the processes around the necessary measures with regard to the obligation to update and the information to be conveyed should also be adapted accordingly.

Should you need support in this regard, we will of course be happy to advise you at any time.

Authors: Christopher Harten, Oliver Korte, Christine Lingenfelser