Changes to sales law in business contracts became effective on 01.01.2022 Sales law
New concept of material defect
The concept of material defects under sales law has undergone significant changes. This term largely determines when the buyer is entitled to warranty claims. Since 01.01.2022, an item is only free of defects according to Section 434 BGB if it meets the subjective and objective quality requirements. Under the old legal situation, however, it was generally sufficient for a purchased item to be free of defects if it complied with the quality agreement of the parties, i.e. the individual specifications of the contracting parties regarding the product. These requirements have always had priority. Objective quality requirements were only subordinate, and only to the extent that there was no agreement between the parties. The legislator did not want to change this priority, but did not do itself any favors when formulating the EU requirements. Due to the ambiguously formulated equal priority of objective and subjective requirements, risks can now arise under the new legal situation if there is no contractual agreement on the priority of subjective requirements. This is the case, for example, if a company manufactures products according to special specifications for individual customers. This is because a product manufactured according to certain specifications may not meet the objective quality requirements, according to which the product must be suitable for normal use and have a quality that is customary for items of the same type. Although a customer-specific production has successfully taken place, according to a strict reading of the new legal situation, the contractual partner could invoke defectiveness if there is a deviating objective "usual quality of the product" and no clear contractual agreement to the contrary. This risk should be countered with unambiguous quality agreements as well as regulations - for example by means of general terms and conditions - which clearly emphasize the priority of these agreements. Such provisions are still possible under the new legal situation, but should be expressly documented in future. Companies with customized production should pay particular attention to this.
Obligation to update digital products in the supply chain
A new update obligation has been introduced for digital products, which entails a number of unresolved legal issues. With the update obligation, a seller must ensure that the consumer is provided with software updates (in particular: security updates) and that the end customer is informed of these. However, since the seller in a supply chain is not also the manufacturer, it will not be (technically) possible for him to provide such updates. From the vendor's point of view, there is therefore the problem of how and over what period of time the update obligation, which initially only exists between the end customer and its vendor, can also be ensured within the supply chain between companies. As an intermediary or final seller of a digital product, the entrepreneur will usually also want to protect himself against his supplier or the software developer, who is the only one who can reasonably provide such updates from a technical and legal point of view, as only he has access to the source code of the software. As a solution to this problem, contractual agreements to ensure the update obligation within the supply chain are advisable when trading in digital products, as otherwise there is a risk of costly disputes in the form of supplier recourse.
Limitation of recourse claims in the supply chain
There have also been significant changes to the statutory regulations on supplier recourse in Sections 445a and 445b BGB. Under the old legal situation, the so-called "maximum limit on the suspension of expiry" ensured that the seller of a product could no longer assert any recourse claims against the supplier after 5 years at the latest following delivery of the item to the end customer. The risk of recourse claims was thus limited by law in terms of time, even in the supply chain. This upper time limit has now been removed without replacement, which in certain cases can lead to a theoretically unlimited liability risk for the supplier. Whether and to what extent such an upper limit can be agreed in individual contracts or in general terms and conditions is currently still open and will have to be examined on a case-by-case basis. However, contractual deviations from an unlimited recourse risk remain possible in individual cases and depending on the product and industry.
Summary
Due to the comprehensive changes to the law that came into force on January 1, 2022, many companies will need to adapt their own contracts.
For companies with customer-specific production, contractual adjustments are required to give priority to quality agreements.
Companies that are involved in supply chains for so-called "digital products" should urgently include contractual provisions on the new software update obligation.
Changes to supplier recourse make theoretically unlimited supplier liability risks conceivable. This requires an examination based on the product portfolio and the contractual provisions. In individual cases, contractual adjustments to minimize risk are advisable.
By drafting contracts, legal certainty and risk minimization can be ensured even under the new legal situation. The individual drafting options are often industry and product-specific. VOELKER will be happy to assist you at any time.