The Act Implementing the Directive on Certain Aspects of Contract Law relating to the Provision of Digital Content and Digital Services of 25.06.2021 introduces important innovations in consumer protection law in the general part of the law of obligations, such as the obligation to update digital content. The following points are particularly noteworthy:

1. contracts for digital products

The new term"digital products" covers both digital content and digital services. 

Examples of digital content: Computer programs, video, audio and music files, digital games, electronic books and publications, applications for mobile devices or similar application software.

Examples of digital services: Services that enable the creation, processing or storage of, and access to, data in digital form, including software-as-a-service, such as video or audio content sharing and other forms of file hosting, word processing or games offered in a cloud computing environment and social media.

The explanatory memorandum to the RegE points out that it is not the content but its digital form that is decisive. Whether the digital product is embodied on a data carrier is irrelevant, as the new Section 327 (5) BGB clarifies.

Contracts for services that are not covered by the term digital services but for the performance of which the entrepreneur uses digital tools (e.g. legal services) are excluded from the scope of application, cf. section 327 (6) no. 1 BGB. However, if the provisions apply to digital products that precede or supplement the corresponding services, for example in the case of legal tech offerings such as document generators or legal chatbots, a distinction must be made with regard to warranty law between the content and results of the service on the one hand and the warranty for the technical provision of the digital product regulated by Subtitle 1 (Sections 327 - 327s BGB) on the other. 

2. provision of digital products

While Section 327b of the German Civil Code (BGB) standardizes the time requirements and the prerequisites for the fulfillment of the entrepreneur's obligation to provide, Section 327c of the BGB provides for the rights of the consumer in the event of non-provision.

3. scope of the obligation to provide defect-free performance

§ Section 327d of the German Civil Code (BGB) specifies the contractor's obligation to perform the contract in accordance with the contract by stipulating the contractor's obligation to provide the service without product defects and defects of title. § Section 327e BGB regulates the detailed specifications on the question of the existence of a product defect and differentiates between subjective or objective requirements and requirements for the integration of digital products.

4. obligation to update

§ Section 327f of the German Civil Code (BGB) contains one of the main innovations of the Directive with the trader's independent obligation to provide updates. Even in the case of contracts that are limited to a one-off exchange of services, the trader is obliged to provide updates to maintain the contractual conformity of the digital product, particularly in the case of security updates. This performance obligation may also apply beyond the warranty period. An updating obligation on the part of the entrepreneur, which is no longer based solely on the time of provision for the creation of secondary obligations under warranty law, is a novelty in the law of obligations.

However, this obligation is limited in several respects: The trader has obligations to create, inform and provide, but no installation obligations. According to Section 327f (2) of the German Civil Code (BGB), he must provide the necessary information for proper installation, but failure to do so on the part of the consumer - in the event of resulting defects - does not lead to liability, but to a release of the entrepreneur from the warranty obligation. The update obligations are limited in scope - the recipient of the product does not have to be provided with any kind of update; "only" updates that are necessary to maintain or produce the main service owed under the contract must be created and kept available. This primarily includes updates to ensure the security of the digital product (Section 327f (1) sentence 2 BGB), even if security defects have no effect on the functionality of the digital product itself. This means that performance-enhancing updates (more precisely: upgrades) in particular, which are not contractually owed, are generally not covered by the obligation to update; they are only covered by the authorization to make changes in accordance with Section 327r BGB.

The trader must inform the consumer sufficiently about the updates, whereby he can use third parties as vicarious agents. In order for the consumer to be properly informed about updates, the trader must be able to contact the consumer, which requires the storage of the consumer's (contact) data for the entire duration of the update obligation. This data processing should be carried out in accordance with the GDPR.

It follows from Section 327e (2) of the German Civil Code (BGB) that it is generally up to the consumer to decide whether to install the update. In the case of necessary critical security updates, a duty to protect in the form of mandatory updates was considered during the legislative process in view of the mostly technical inexperience of consumers. Ultimately, the obligation to update was not included in the law, as it was felt that the advance information should enable consumers to make their own decisions.

5. legal remedies of the consumer under warranty law

With regard to legal remedies, Section 327i of the German Civil Code contains little that is surprising, as the termination of the contract (withdrawal, termination), subsequent performance and price reduction are listed. Furthermore, the German legislator has adhered to the compensation for damages, which the EU Directive has left to the Member States. The usual hierarchy of warranty rights has also been retained in that the consumer must first claim subsequent performance, Section 327m (1) No. 1, 2 BGB.

For subsequent performance, Section 327l (1) BGB gives the trader the freedom to choose how to restore conformity with the contract. The rectification of defects must be free of charge, but this does not include, for example, the costs of data transmission, which the consumer can only claim as damages. Furthermore, although Section 327l (1) BGB provides for a reasonable deadline for rectification after the consumer has been informed of the defect, it does not stipulate that the consumer must set this deadline. Finally, Section 327l (1) sentence 2 BGB makes subsequent performance subject to the reservation of inconvenience for the consumer, which the legislator intends to include, for example, necessary changes to the digital environment or effects on the functionality of other digital products. There are also differences to the current warranty law with regard to the impossibility for the trader to provide supplementary performance. For example, the claim for subsequent performance may be excluded due to disproportionate costs for the entrepreneur, whereby the case law on Section 439 (4) sentence 2 BGB can be used.

Due to the equal treatment of one-off and permanent provision of digital products, the legislator had to abandon the differentiation between withdrawal and termination in favor of the term "termination of contract". According to Section 327m (1) No. 1 of the German Civil Code (BGB), termination of the contract can be considered in particular if subsequent performance is excluded in accordance with Section 327l (2) BGB, although no express declaration by the trader is required. Section 327m para. 1 no. 2 BGB also provides for the right to terminate the contract in the event that the contractor has not rectified the defect within a reasonable period of time. In addition to the serious defect, the contractor's refusal to rectify the defect can also be considered a reason for terminating the contract, whereby it does not matter whether the refusal was justified or not. Only in the case of insignificant defects can the consumer not assert a right to terminate the contract - which in turn excludes contracts that only provide for data "as consideration", Section 327m (2) sentence 2 BGB.

For package contracts, Section 327m (4) BGB contains a provision for contract termination that is comparable to Section 327c (6) BGB: If the defect in one part of the contract causes the consumer's interest in the entire package contract to lapse, the termination of the contract also extends to the entire package contract. "Package contract" is legally defined in Art. 3 Para. 6 of the EU Directive: "A single contract between the same trader and the same consumer which includes in a package, in addition to the supply of digital content or services, elements of the supply of other services or goods." An example of a package contract is the contractual agreement for the provision of a video streaming service, which is concluded together with the purchase contract for an electronic product that is suitable for the reproduction of this digital product.

Instead of terminating the contract, in the case of contracts for which the consumer pays a price, the consumer can demand a reduction in accordance with Section 327n (1) BGB. For the calculation of the reduction, Section 327n (2) BGB refers - as otherwise - to the ratio of the value of a defect-free digital product to the actual value of the product.

In addition to the termination of the contract, Section 327m (3) BGB also grants the consumer the right to claim damages instead of performance or compensation for futile expenses in accordance with Sections 280 (1), 283 sentence 1 and 311a (2) sentence 1 BGB. In contrast to other legal remedies, however, these provisions can be waived, which is clarified in Section 327s (4) BGB.

6. contracts between entrepreneurs (B2B) 

§§ Sections 327t and 327u BGB contain special provisions for contracts for digital products between entrepreneurs (B2B). § Section 327u BGB regulates the entrepreneur's possible recourse against the contractual partner from whom they purchased the digital product. § Section 327u (4) BGB makes the provisions of Section 327u BGB mandatory in favor of the entrepreneur, meaning that any conflicting contractual clauses are likely to be ineffective.