The new sales law and its signi­fi­can­ce for sup­plier contracts

The natio­nal imple­men­ta­ti­on of Direc­ti­ve (EU) 2019/771 adop­ted on 20 May 2019 (her­ein­af­ter, the “Sale of Goods Direc­ti­ve”) leads to far-reaching chan­ges for sales con­tracts con­clu­ded as of 1 Janu­a­ry 2022.

Alt­hough one of the main objec­ti­ves of the Sales of Goods Direc­ti­ve is to incre­a­se the level of con­su­mer pro­tec­tion, its imple­men­ta­ti­on in the Ger­man Civil Code also has impli­ca­ti­ons for busi­ness tran­sac­tions. Not only were the pro­vi­si­ons on the sale of con­su­mer goods (§§ 474 ff. of the Civil Code) amen­ded, but the gene­ral law on the sale of goods was also amen­ded. Two issu­es are par­ti­cu­lar­ly rele­vant for com­pa­nies: the defi­ni­ti­on of defects and the seller’s recourse.

The defi­ni­ti­on of a defect under the law of sales

In imple­men­ta­ti­on of Arti­cle 5 of the Sale of Goods Direc­ti­ve, the requi­re­ments for the purcha­sed goods to be con­si­de­red free of mate­ri­al defects have been new­ly regu­la­ted. Pre­vious­ly, the defi­ni­ti­on of a mate­ri­al defect pri­ma­ri­ly pro­vi­ded for sub­jec­ti­ve cri­te­ria (agreed qua­li­ty, con­trac­tual­ly requi­red use) and sub­or­di­na­te­ly for objec­ti­ve cri­te­ria (sui­ta­bi­li­ty for nor­mal use) in a tie­red rela­ti­ons­hip. Now the­se requi­re­ments are cumulative.

This poses the fol­lowing pro­blem for sel­lers, espe­cial­ly in busi­ness dealings: Alt­hough the qua­li­ty of the purcha­sed item is regu­lar­ly defi­ned in con­cre­te terms bet­ween the buy­er and the sel­ler by means of spe­ci­fi­ca­ti­ons or other agree­ments and the sel­ler com­plies with the­se, the war­ran­ty rights pro­vi­ded by law may be trig­ge­red becau­se objec­ti­ve expec­ta­ti­ons are also applicable.

This dilem­ma must be addres­sed; other­wi­se, the­re is a thre­at of war­ran­ty risks. The way to achie­ve this can only be clear and con­clu­si­ve agree­ments bet­ween the con­trac­ting par­ties, e.g. nega­ti­ve qua­li­ty agree­ments. This has always been advi­s­able, sin­ce sub­jec­ti­ve ide­as are by their very natu­re a gray area open to inter­pre­ta­ti­on in cases of doubt. Due to the new struc­tu­re of the Civil Code, it is now unavo­ida­ble. In this regard, stan­dard terms and con­di­ti­ons such as gene­ral terms and con­di­ti­ons and sam­ple con­tracts should also be review­ed and adap­ted if necessa­ry. This also app­lies to ques­ti­ons of recour­se and limi­ta­ti­on peri­ods in the case of war­ran­ty claims:

Seller’s recour­se pur­suant to §§ 445 a/b of the Civil Code

It is true that Arti­cle 18 of the Sale of Goods Direc­ti­ve con­tains only a few pro­vi­si­ons on the seller’s recour­se against its sup­plier. Howe­ver, the natio­nal law­ma­kers have also adap­ted §§ 445 a and b of the Civil Code. In this con­text, one chan­ge will have signi­fi­cant con­se­quen­ces for sup­ply chains: the aboli­ti­on of the maxi­mum limit on the inter­rup­ti­on of the run­ning of claims limi­ta­ti­on peri­ods in § 445b(2), Sen­tence 2 of the Civil Code (old version).

§ 445b(2) of the Civil Code sti­pu­la­tes an inter­rup­ti­on of the run­ning of limi­ta­ti­on peri­ods both for recour­se in accordance with § 445a(1) and for the gene­ral war­ran­ty claims in § 437. Accord­in­gly, the seller’s recour­se claims against (its) sup­plier are to expi­re at the ear­liest two mon­ths after the date on which the sel­ler ful­fills the war­ran­ty claims of its buyer.

§ 445b(2), Sen­tence 2 (old ver­si­on) pro­vi­ded for a maxi­mum time limit of five years from deli­very from the sup­plier to its cus­to­mer for the enfor­ce­ment of recour­se claims. This maxi­mum peri­od has now been dele­ted without repla­ce­ment with the imple­men­ta­ti­on of the Sale of Goods Direc­ti­ve. For actors in the sup­ply chain, this goes hand in hand with legal uncer­tain­ty and the con­si­derable risk of being expo­sed to war­ran­ty claims without this maxi­mum limit. A risk that was alrea­dy known to only a few has now been fur­ther exacerbated.

Sum­ma­ry

In the con­text of the imple­men­ta­ti­on of the Sale of Goods Direc­ti­ve, Ger­man law­ma­kers have deci­ded to app­ly buyer-friendly regu­la­ti­ons also to con­tracts in busi­ness tran­sac­tions strict­ly bet­ween enter­pri­ses. In this light and due to the adjus­t­ments to the law on sales shown, sup­pliers and manu­fac­tu­rers must check their own pro­ducts for com­pa­ti­bi­li­ty with the new defi­ni­ti­on of defects, (con­trac­tual­ly) safe­guard the pos­si­bi­li­ties of recour­se along the sup­ply chain, and adapt sam­ple con­tracts and gene­ral terms and con­di­ti­ons to the new structures.

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