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Business formation: Contract law, including default interest

Gültigkeitsgebiet: Bundesweit

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Here you will find information on your rights and obligations regarding business formation, management, and closure, as well as specifically on contract law and default interest.

Description

B2B and B2C sales in contract law

Companies that Terms and Conditions wish to draft for their contracts with business partners or end consumers, must observe numerous criteria. Unlike other contractual agreements, the general terms and conditions are not negotiated between the contracting parties. Instead, one contracting party dictates the GTC as a component of the contract. For this reason are subject to Terms and Conditions strict protection. The legislature has established rules in the Civil Code (BGB) that must be observed when using general terms and conditions (AGB).

  • Are the GTC compared to end consumers used, strict consumer protection applies.
  • When using standard terms and conditions against Company less strict protection regulations do not apply.

National contract law rules for the supply of digital content and digital services

Through the implementation of the Digital Content Directive 2019/770 new regulations were introduced into national law for all consumer contracts. Regardless of the type of contract, these regulations relate to the provision of:

  • digital content, such as software and e-books, as well as
  • digital services, such as video streaming and social networks.

The companies are required to defect-free performance obliged. In the event of a defect in the digital product, consumers have, in addition to the claim to subsequent performance both the right to Termination of contract as well as the right to Reduction. Nacherfüllung means the remedy of the defect, for example by repairing the digital product or providing it again. In addition, consumers can assert claims for damages and reimbursement of expenses. As Warranty period a minimum period of two years is provided for.

Companies are also required to, Updates – as well as functionality-maintaining updates and security updates –. The regulations apply both when consumers pay a price for digital products and when they provide personal data in addition to or instead of payment.

The new regulations apply in particular to:

  • Databases
  • Cloud services
  • Platform offers
  • Social Media
  • Web applications
  • Media downloads, such as e-books
  • digital television services
  • number-independent interpersonal communications services, such as e-mail or messaging services
  • physical data media that serve exclusively as carriers of digital content, such as DVDs, CDs, USB flash drives and memory cards
  • the provision of certain electronic files in the context of the 3D printing of goods.

The new regulations also apply to so-called Package deals, which, in addition to the provision of digital products, include further contract contents. These may, for example, involve the provision of non-digital services. As a rule, however, the new regulations then only apply to the digital part of the contract.

Furthermore, as a provider of a website, you in any case have special Information obligations to note. It does not matter whether the website serves purely for presentation purposes or whether an ordering system is integrated. Information must be provided about:

  • the complete First and last name of the female provider or the male provider, where applicable of the company
  • die postal address of the provider, whereby the specification of post office box and e-mail address is not sufficient
  • at legal entities, such as a GmbH, UG (haftungsbeschränkt), AG, cooperative, association, the legal form of the company and the name of the authorized representative(s)
  • the complete First and last name and the Address or of the person responsible for the content of journalistic-editorial offers
  • die VAT identification number (VAT ID No.), if applicable
  • Information on competent supervisory authority, provided that the activity carried out requires official approval, such as in the real estate broker and property developer industry
  • an email address and additionally another one Means of communication, which enables the consumer to make rapid contact, such as telephone and fax numbers, internet chats, or electronic contact forms
  • the responsible Commercial Register, partnership register, cooperative register or association register including the registration number, if registered
  • at AG, KGaA or LLC, which are in the process of winding up or liquidation, the indication thereof
  • for services provided in the exercise of a regulated profession, the indication of professional chamber, the professional title protected by law and of the state in which the professional title was awarded, as well as professional regulations and where they can be accessed
  • Indication of Economic identification number, if any.

Do you offer in your Online store products for consumers, there are further legal regulations that must be strictly observed. You must provide information on your website about:

  • die key features of the goods or services
  • the time as well as the manner of Conclusion of the contract
  • in so-called continuous obligations, which Minimum contract period, if it has as its content a permanent or regularly recurring service
  • potential Reservations of delivery or a reservation to provide a service of equivalent quality and price
  • den Total price of the goods or service, including all associated price components as well as all taxes passed on via the entrepreneur or
  • if no exact price can be given, the basis for calculating the price that enables the consumer to Price check enables
  • for freight forwarding goods regarding the exact amount of Shipping costs
  • if applicable additional taxes or Costs, which are not remitted by the entrepreneur or invoiced by them, for example, information about a paid program not distributed by the company that is necessary to display the retrieved information
  • die Details regarding Payment and Delivery or in the case of a service regarding fulfillment
  • the existence or non-existence and expiration of the Right of withdrawal as well as the conditions, deadlines, and procedures for exercising the right of withdrawal by means of the cancellation policy and the model cancellation form. In addition, this information must be provided to the consumer on a durable medium at the latest upon delivery of the goods. This can be done, for example, by email in the order confirmation or in paper form with the delivery of the goods.
  • the potentially specific additional Costs the use of means of distance communication in connection with the initiation and conclusion of the contract, provided that these exceed the usual costs,
  • die Validity period limited-time offers
  • the individual ones technical steps, which lead to the conclusion of a contract
  • whether the Contract text is stored by the online retailer after the conclusion of the contract and whether it is accessible to the customer
  • regarding the languages available for the conclusion of the contract
  • if online retail Codes of conduct submits, regarding these and their electronic accessibility
  • the possibility of a Online dispute resolution via clickable link
  • the willingness to participate or not participate in a Consumer dispute resolution, provided that the employer employs at least 11 persons.

The right place for the information is the Ordering page. There you must provide consumers with the information in a clear, comprehensible, and prominent manner. This is best achieved with the help of a structured ordering process and the use of

  • Terms and Conditions
  • one Right of withdrawal and
  • a Cancellation Form.

Special rules – other off-premises sales

When a contract is concluded outside of a retail store, for example at the front door or at the workplace, consumers are exposed to a particular risk of being caught off guard. For this reason, the law provides in these situations special protection provisions Before.

Before concluding the contract, you as a company Information obligations to fulfill. These include, among others:

  • the essentials Properties of the goods or services
  • Your Identity and contact details
  • the Total price of the goods and services including all taxes and duties as well as any additional costs, such as freight, delivery, or shipping costs
  • die Terms of payment, delivery and service and, if applicable, the term of the contract and the conditions for termination
  • if applicable, existing Right of withdrawal as well as, in particular, the cancellation period and the legal consequences of cancellation.

For contracts concluded away from business premises, consumers generally have a 14-day limited Right of withdrawal (Section 312g(1) of the German Civil Code (BGB)). The revocation may be made in any form, including verbally, by telephone, or by email.

In-Store Sales

The Information obligations also apply for brick-and-mortar retail, that is, shopping in a physical store. A There is no statutory right of withdrawal here. Consumers have a right of withdrawal in the following cases:

  • at the time of conclusion of the contract Installment payment agreed
  • The purchase agreement is effective as of Loan Agreement connected
  • A Financial Assistance granted—for example, in the case of a lease agreement with an obligation to purchase, or when a cell phone is sold with a contract for more than 200 EUR less than it would cost without the contract.
  • Related Items, such as the volumes of an encyclopedia, are delivered gradually and are to be paid for in installments.
  • You will receive the regular delivery similar items, such as newspaper or magazine subscriptions.
  • The contract, for example with a book club, provides for regular acceptance of goods. In these cases, however, the purchase price must exceed 200 EUR and be paid on credit over a period of more than 3 months.

Assistance and training services regarding contractual obligations

Due to the Chambers of Commerce and Industry (IHKs) Information is made available throughout Germany; see Information and Publications.

Types of Contracts for the Delivery of Digital Content

In the case of contracts for downloading, that is, the Download, or real-time loading, also known as Streaming, when it comes to digital content, it is usually Distance Sales Contracts. Therefore, the provisions applicable to these contracts generally apply. In addition, the special regulations for contracts in electronic commerce apply.

However, there are a few Special features. These concern both the downloading and streaming of movies, music files, or other digital content on the internet, as well as the downloading of apps for smartphones and tablets.

In distance contracts, consumers have the right to cancel the contract without giving any reason. They generally have 14 days to do so. In the For the purchase of digital content, this withdrawal period begins as soon as the contract is concluded.. However, if the company has not informed the consumer about the right of withdrawal, the period is extended by another 12 months.

However, to prevent digital content from simply being used and then revoked as many times as desired, there is a special rule for streaming and downloading: The right of withdrawal expires as soon as the company has begun executing the contract. For streaming portals, this means as soon as the stream begins and the consumer can access the content. For the download of digital content, the right of withdrawal expires when the downloading process has begun.

You must inform consumers in advance about this special feature of the right of withdrawal.

Liability for defects in sold digital products or services

A defect is always present when a product does not have the agreed-upon quality, or if it is not suitable for ordinary use. Digital goods can therefore also be defective. If this defect already existed upon delivery, consumers are entitled to so-called Warranty rights to.

You are obligated to remedy defects in digital goods or to provide the buyers with flawless files. If you fail to do so, the buyers have the right to reduce the purchase price or to withdraw from the purchase contract. 

Relevant information regarding delayed payments

If a contract is not performed, i.e., the customer does not pay after the conclusion of the contract, it is important for the creditor, the company, to put the debtors in default. The debtors enter into default if they fail to perform upon a reminder from the creditor. A Reminder should be in writing by certified mail with return receipt be sent to the debtors. The reminder should contain an explicit request for payment, ideally with a specific date by which payment is to be made.

As soon as the debtor is in default, the creditor is entitled to, default interest to demand. You may charge the debtor, provided the debtor is a consumer, interest at a rate of 5 percentage points above the European Central Bank’s current base rate.

The dunning procedure is, in addition to filing a lawsuit, a way to assert a financial claim with judicial help. Since it is a so-called simplified procedure, the dunning procedure is of great practical importance. It makes access to the courts possible for everyone. The application for the issuance of a dunning notice must be submitted in writing on the officially prescribed application form to the competent local court. The application form is available in stationery stores. In addition, there is the possibility to obtain the judicial dunning notice electronic to apply for.

An alternative to the judicial dunning procedure is hiring a Debt collection agencies. The term „Inkasso" (debt collection) comes from banking. It refers to the collection of money for claims, for example in the case of due bills of exchange and invoices. When collecting claims in the event of payment default, you can the affiliated collection agencies help.

Legal basis

further information

Start-up portal of the Federal Ministry for Economic Affairs and Climate Action (BMWK):

This support service assists you in exercising your rights and fulfilling your obligations within the European Single Market.

Technical approval

Federal Ministry for Economic Affairs and Climate Action

Stichwörter

  • Warranty
  • Reminder
  • Delay
  • Information obligations
  • Defects
  • Debtor
  • Creditor
  • Terms and Conditions
  • Digital goods
  • dunning procedure
  • Debt collection
  • Package deals
  • Terms and Conditions
  • default interest