Germany Update: Everything new in the Sales Law? The Most Important Changes After the Implementation of the Sale of Goods Directive

After a good 20 years, the Consumer Goods Purchase Directive has been replaced by the Goods Directive (“WKRL”), which will apply to all contracts from 1 January 2022. The German implementation was carried out by the “Act on the Regulation of the Sale of Goods with Digital Elements and Other Aspects of the Purchase Contract” adopted on 25 June 2021 and thus shortly before the deadline expiring on 1 July 2021. Whether the new WKRL really changes everything will be briefly summarized below.

1.General Sales Law

Probably the most far-reaching change has been made to the concept of material defect in § 434 BGB, because an item is only free of material defects if, in addition to the subjective requirements, the objective requirements and the assembly requirements are also met. It is therefore a cumulative existence of the prerequisites (so-called “synchronization of the error terms”), so that in particular the former primacy of the agreed quality is no longer relevant. But what does this change mean in practice?

a.Subjective requirements

The subjective requirements include (a few surprisingly) everything that the parties have expressly agreed, i.e. the quality agreement itself. According to the new, non-exhaustive list in § 434 Abs. 2 BGB (German Civil Code), this includes type, quantity, quality, functionality, compatibility, interoperability, and other characteristics agreed by the parties. The terms compatibility and interoperability refer to the ability of the goods to function with the hardware and software. Compatibility refers to the fact that goods of the same type can usually be used without having to change the goods, hardware, or software. Interoperability means the ability to work with hardware or software other than the one that uses things of the same type. In particular, this is to ensure the quality of products used online, such as smartphones, smartwatches, or smart home devices.
Although it is now prescribed that the handover of the agreed accessories and the agreed instructions is also one of the subjective requirements. However, this does not result in any change, because this, in turn, must first be explicitly agreed.

b.Objective requirements

Except in the case of an effective negative quality agreement, the item must meet not only the subjective but also the objective requirements. This means that according to the new sales law, it is possible that a product that is suitable for the use assumed by the parties may be defective if it is not suitable for normal use or does not have the usual quality!
The objective requirements include the suitability for normal use, the usual quality as well as the correspondence of a previous sample or sample and the expected accessories. As with the subjective requirements, the usual quality is further differentiated, whereby in particular the durability stands out. However, the WKRL is by no means intended to establish a legal guarantee of durability. Only a capability of the matter is determined, which must be given at the time of the transfer of risk.
Finally, it is worth noting that deviations in the quantities delivered will in future be taken into account within the framework of subjective or objective requirements and will therefore no longer be equated with deliveries.

2.Purchase of consumer goods

The changes in the purchase of consumer goods are much more comprehensive compared to those of the general sales law. One of the most important changes concerns § 442 BGB. The provision of § 442 BGB is generally no longer applicable to consumer contracts because the WKRL has independently regulated the exclusion of liability in § 476 sec. 1 s. 2 BGB and made it dependent on further conditions than the existence of a defect. In addition, the reversal of the burden of proof in § 477 BGB was doubled to one year.

a.Negative quality agreements

As before, it remains possible to agree on quality in such a way that the item does not have the usual or expected according to the objective criteria quality, for example, the sale as “non-functional” or “for exploitation”. With regard to consumers, however, separate information and the express consent of the consumer are now required. In particular, previously sufficient implied agreements, pre-ticked boxes, or provisions in GTC are no longer sufficient!

b.Obligation to update

When purchasing goods with digital elements, § 475 b Abs. 2 – 4 BGB (German Civil Code) establishes a further obligation to update if this is provided by the entrepreneur or a third party (which is presumed).
The basis of the concept of defect is also § 434 BGB, as the references in the provision make clear. The additional requirements are then regulated in § 475 BGB, in particular the updates. Outside of contractual agreements, an item is defective according to § 475 b Abs. 4 Nr. 1 BGB if “during the period that he can expect due to the nature and purpose of the goods and their digital elements as well as taking into account the circumstances and the nature of the contract, the consumer is not provided with updates necessary to maintain the conformity of the goods with the contract.”
How long the expected period is will have to be determined on the basis of an overall view, although advertising statements, the price of the product, and the usual useful life of comparable goods are likely to play a certain role.

c.Absolute disproportionality

• 475 Abs. 5 and 6 BGB have been deleted, so that the seller is also entitled to a total right of refusal in relation to consumers. Under the old law, in the case of absolute disproportionality, it was only possible for the seller to deny the consumer the chosen type of supplementary performance (rectification or subsequent delivery) on the grounds of disproportionate costs. However, a refusal of both types of supplementary performance was not possible. This is no longer the same.

d.Suspension of expiry or statute of limitations

In order to strengthen consumer rights, § 475 e Abs. 3 BGB provides for an expiry suspension for the limitation period of warranty claims. This is valid for a period of two months, starting from the time when the defect has become apparent. A corresponding inhibition is also provided for in the event of subsequent performance. According to § 475 e Sec. 4 BGB, the limitation period is suspended for two months from the time in which the consumer has received the goods provided for subsequent performance back from the entrepreneur or a third party employed.

3.Other interesting facts

a.Claim for subsequent performance

Since a change regarding the replacement for dismantling and dismantling costs had already been implemented in Germany after the ECJ ruling, the effects in this area are small. In order to avoid that the buyer could demand a replacement even if he had carried out the installation in the knowledge of the defectiveness, § 439 (3) BGB previously referred to § 442 BGB and brought about an exclusion of liability in such cases. This reference is no longer necessary (and would no longer be permissible) because the text of the law itself now stipulates that the installation must have taken place: “before the defect was disclosed.”

b.Supplier recourse

The seller’s independent right of recourse in § 445 a Abs. 1 BGB is also applicable in the event of failure to provide the update because this obligation can only be effectively enforced according to the legal materials if it can be passed on through the chain to the manufacturer. However, the problem with this constellation is that, on the one hand, the supplier usually has no update obligations towards the consumer and, on the other hand, that there is only an obligation to compensate expenses and not to update itself. Whether this situation can be solved by a teleological reduction, if the missing update is not assigned to the risk area of the supplier, remains to be seen.
The suspension of expiry of five years after delivery of the item from the supplier to the seller, which was previously regulated in § 445 a Abs. 2 S. 2 BGB, was deleted without replacement!

c.Differentiation from the purchase of digital products

In addition to the WKRL, the Directive on Digital Content and Services (DIDRL) was adopted at the same time, which led to the new introduction of § 327 a – u BGB. At the heart of the new paragraphs is in particular the purchase of digital content, but what is the difference to goods with digital elements?
In short, the goods with digital elements refer to such movable items that contain digital products, in such a way that the thing cannot fulfill its function without the digital products, such as voice-controlled speakers, smart TVs, or smartwatches that only work by means of an app on the smartphone. In contrast, digital products are data created and provided in digital form, such as video and audio files, music files, and digital games.

Result

On the whole, the effects have to be managed. This is particularly true because the case law in Germany in many respects already corresponded to what has now been fixed by law or editorially corrected. It will be necessary to learn how to deal with the new concept of material defect and the new information and education obligations in consumer goods sales law.

By Anne Birnkraut, MELCHERS, Germany, a Transatlantic Law International Affiliated Firm.  

For further information or for any assistance please contact germany@transatlanticlaw.com

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