New contract law for sale of digital products to consumers – Commentary

Area 327(1) of the Civil Code defines “digital goods” as:

• digital content material – details that is created and built available in electronic kind (eg, laptop courses, video files, audio documents, new music data files, electronic online games, digital textbooks and other electronic publications or applications) and
• digital solutions – products and services that:
  • help the purchaser to generate, course of action or store info in a electronic type, or accessibility such details or
  • help the shopper and other end users of the service to share details uploaded or developed in a digital kind, or have out other interactions with these types of info.

Examples of digital solutions include things like:

• the offering of software program as a services
• the presenting of online video or audio content material or
• game titles presented for shared use in a cloud-computing setting and in social media.

Nonetheless, the conditions are deliberately described broadly so that electronic offerings are coated no matter of their precise technological design and style.

In accordance to portion 327(1) of the Civil Code, the new polices use when a contract is concluded between an entrepreneur and a client with regards to a electronic solution for which the purchaser will have to pay a price. In addition to funds, “payment of a price” also includes the electronic presentation of a value, this sort of as an e-coupon, or the provision of personal knowledge by the customer. However, the latter does not incorporate the provision of private data that the entrepreneur requires in buy to fulfil the contract with the client.

Pursuant to portion 327(4) and (5) of the Civil Code, the application of the new restrictions also extends to contracts in which a digital merchandise is produced according to the consumer’s specifications and, with some limitations, to contracts in which the digital articles is provided on physical media.

There are selected exceptions to the software of the new rules. For instance, contracts for financial companies or health care treatment do not fall in the scope of their software.

Pursuant to section 327a of the Civil Code, package contracts do drop within just the scope of the regulation. “Package contracts” in this feeling are purchaser contracts in which, in addition to the provision of digital goods, other items or solutions are furnished – for illustration, a video streaming services available collectively with the sale of an electronic product. Additionally, the polices also implement to purchaser contracts for items that have electronic solutions or are linked to them. In both equally conditions, on the other hand, the provisions commonly implement only to individuals parts of the agreement that relate to the electronic items.

The rules introduce certain legal rights and obligations for the provision of digital goods, which include the adhering to.

Obligation to update
Pursuant to segment 327f of the Civil Code, the entrepreneur must be certain that, where by a electronic product or service is manufactured accessible on a everlasting basis, any updates essential for the electronic product or service to continue to be in conformity with the deal are offered to the buyer. In all instances of non-lasting provision of the electronic product, such updates need to be furnished at least for a period that the customer could possibly expect based on the nature and reason of the electronic product or service and using into account the conditions and nature of the agreement. Additionally, the customer need to be educated about the updates.

Defects
Pursuant to part 327e of the Civil Code, a new strategy of “defects” applies, according to which the digital merchandise is only cost-free of products defects if it fulfills the subjective and objective prerequisites and, if integration is to be done, the integration needs as well. “Integration” in this context suggests the integration of a electronic products into the consumer’s electronic environment (eg, components, application or community connections of all sorts), so that the digital merchandise can be employed in accordance with the requirements.

Subjective specifications
In get to fulfill the subjective necessities, the electronic merchandise must be:

• of the high quality agreed in the contract, which involves compatibility and interoperability
• acceptable for the use assumed under the agreement and
• provided with equipment, recommendations and soon after-income support as agreed in the deal.

Even further, the updates agreed in the contract have to be supplied during the applicable interval beneath the deal.

Aim requirements
To fulfill the aim necessities, the electronic products have to:

• be suitable for common use
• be of a high-quality (like, for illustration, performance, compatibility and stability) that is customary for electronic goods of the similar form and that the consumer may expect, using into account the nature of the digital products
• correspond to the mother nature of a examination edition or preview, if the entrepreneur has furnished the client with such a preview in advance of the conclusion of the deal
• be provided with all accessories and guidance that the buyer would expect to get and
• be provided in the most current obtainable variation, until if not agreed.

Even further, the customer will have to be supplied with the necessary updates and need to be knowledgeable about them.

Integration necessities
The electronic item satisfies the integration needs if:

• the integration has been carried out appropriately or
• if this is not the case, the absence of integration is not because of to poor integration by the entrepreneur or a defect in the guidance furnished by the entrepreneur.

Change in load of proof
Pursuant to segment 327k of the Civil Code, matter to sure exceptions, a change in the burden of evidence applies, according to which in the situation of a forever presented electronic product or service, it is presumed that the digital merchandise has a defect if these kinds of a defect gets to be obvious all through the provision period. In the scenario of digital products supplied on a non-everlasting basis (eg, a one-time provision or numerous specific provisions), it is presumed that the digital solution was defective at the time of provision if the digital products reveals these a defect in one particular 12 months of its provision.

This presumption shall not use if:

• the consumer’s electronic ecosystem was not appropriate with the technical needs of the digital item at the suitable time or
• the entrepreneur is not able to make such a perseverance simply because the purchaser fails to cooperate in this regard and the technical signifies supposed to carry out these kinds of dedication would result in the the very least interference probable for the client.

Having said that, this exception only applies if the entrepreneur has plainly educated the consumer about the technological needs for the digital surroundings and the consumer’s important cooperation in advance of the conclusion of the contract.

Change to digital products
Pursuant to part 327r of the Civil Code, in the situation of a long-lasting provision of a electronic merchandise, the entrepreneur may only make adjustments to the electronic product if:

• the deal offers for this likelihood and consists of a legitimate rationale for it

• the purchaser does not incur any further fees as a result and
• the purchaser is educated plainly and comprehensibly about the modify.

Alterations that are needed to keep the contractual issue are excluded.

If the adjustments limit the consumer’s access selections or impair usability, the client need to also be knowledgeable of this within just a sensible time period before the improve is manufactured by indicates of a sturdy medium.

The new regulations must be utilized to all consumer contracts that relate to the provision of a electronic item and are concluded on or following 1 January 2022.

The new laws should also be used to client contracts that are concluded before 1 January 2022 and relate to the provision of a digital item if the electronic product is provided on or immediately after 1 January 2022. Area 327r of the Civil Code, even so, will only implement if the deal with the purchaser for the provision of the digital products was concluded on or just after 1 January 2022.

Business owners that market electronic products to shoppers ought to adapt them and their provision to the new legal rules. They need to also adapt their agreement stipulations – in distinct, the general phrases and situations – to the new authorized needs.

Business owners that market digital solutions meant for sale to customers to other entrepreneurs (eg, retailers or intermediaries) are also afflicted by the new laws.

So, the entrepreneur that ultimately distributes the electronic product to the consumer could – in accordance to section 327u of the Civil Code – assert from its distribution husband or wife the costs they incur if a customer asserts their rights (eg, owing to a defect, untimely provision or breach of the obligation to update) if the distribution associate is responsible for:

• the late provision or breach of the obligation to update or
• the defect, if it was by now present at the time of handover to the entrepreneur.

This provision shall use mutatis mutandis to the other contractual partners in the distribution chain.