Sales law in the EU: New draft law
Part of that strategy is EU Sale of Goods Directive (WKRL), which aims to fully harmonize sales law in the EU. The federal government recently published its draft law to implement the WKRL in German law. Among other things, Ne regulations on the concept of material defect and contain an extension of the presumption of deficiency. Entrepreneur will meet one in the future Update obligation for contracts with digital content.
However, the new regulations also offer opportunities for online retailers: the uniform legal framework reduces the transaction costs for opening up new markets. Small and medium-sized dealers in particular benefit from this.
The term “material defect” is expanded in a consumer-friendly way
The term “ material defect ”, which has hitherto been largely subjective in German law, will in future be supplemented by objective criteria. In addition to the subjective ideas of the contracting parties, objective elements, such as the properties of the thing customary in business transactions and the assembly requirements, come to the fore more than before. This should also include the durability of the thing. This leads to the fact that the definition of deficiency is noticeably expanded. For B2C sales contracts, the new definition of a defect is largely mandatory. Consumers and (online) retailers can only deviate from this under strict conditions.
Another change in favor of consumers is the doubling of the statutory reversal of the burden of proof: The previous assumption that there was a defect in the purchased item in B2C sales contracts when the purchased item was handed over is no longer valid for six months, but for a whole year! Only after this year does the buyer have an active obligation to provide evidence.
The “thing with digital elements” – a new category for the civil code
The also adopted with the digitization strategy of the European Commission Digital Content and Services Directive provides for the introduction of a completely new subject category – the “thing with digital elements”. This is something that works only with the help of digital content or services. “Digital content” means data that is created and made available in digital form. “Digital services” exist when electronic data processing operations are carried out.
In short: a connection between thing and digital element is necessary. In the future, a distinction will be made between things with and without digital elements, as the applicable warranty rules differ considerably. Affected online retailers will have to adjust their terms and conditions accordingly.
Sales law: Update obligation for sellers
With the new subject category, the sellers will in future be obliged to provide updates for the digital elements. This prevents things from losing functionality and security just because the software they contain is no longer up-to-date. The item is only free of defects if the seller complies with the update obligation. As soon as new updates are available, the customer must be informed.
The obligation exists for as long as consumers can expect based on the nature and purpose of the item and the contract. The draft law does not make any further specifications – this open formulation means that dispute is inevitable. Ultimately, courts will decide on a case-by-case basis how long the seller has to provide updates.
Another problem is that it is often not the seller but the manufacturer that provides the updates. The legislature has recognized this and strengthened the seller for recourse in the supply chain. Nevertheless, dealing with the customer will be an additional burden for the seller. And how smoothly the recourse will work with the manufacturer remains to be seen – especially when it comes to a large corporation based abroad.
Sales law brings stricter requirements for guarantees and flexible statute of limitations
But that’s not all – the draft law brings additional burdens for (online) retailers. In future, the guarantee declaration must be made available on a permanent data carrier, for example by e-mail. The guarantee declaration must clearly state that the guarantee does not affect the additionally applicable guarantee rights and that the claim is free of charge.
Another innovation in sales law is that the limitation period for warranty rights begins differently in B2C transactions. Depending on the subject matter of the contract, the statute of limitations should come into effect either two years after the item has been made available, at the end of the period of availability (if this is longer than two years) or at the end of the period at which the update obligation ends. In this respect, too, online retailers have to adapt their terms and conditions – otherwise there is a risk of warnings from competitors and consumer protection associations.
Cross-border trade is made easier – an opportunity for online retailers
Despite many new obligations for traders: The purpose of the WKRL is to harmonize the European internal market and to promote cross-border electronic trade. The guideline promises advantages, especially for small and medium-sized companies, because contracts do not have to be adapted to other legal systems. This reduces transaction costs overall and opens up new markets.
Another goal is sustainability. The extended reversal of the burden of proof is intended to encourage entrepreneurs to manufacture more durable products. This can have a positive effect on the product quality.
Practical implementation: better today than tomorrow
Significant changes to the current draft law of the federal government are not expected. The provisions of the WKRL have to be implemented by the member states by July 1, 2021 and bindingly applied from January 1, 2022.
The new regulations will become binding within the EU in around nine months. Online retailers should therefore analyze their adjustment needs as soon as possible and implement them in practice. It will be necessary to update the contracts and terms and conditions. In addition, new processes have to be implemented – for example for the implementation of the information requirements for updates and guarantees. If the affected retailers fail to implement the new sales law on time, there is a risk of fee-based warnings from competitors and consumer associations.
Also read: Online trading: These laws and regulations will change in 2021