German Sales Law

Scope and Structure

German sales law is codified in Sections 433-453 of the Burgerliches Gesetzbuch (BGB), forming the first title of the Special Part of the Law of Obligations. The provisions cover the contract of sale (Kaufvertrag), including the obligations of the seller and buyer, the passing of risk, warranty for defects, and special rules for consumer sales and digital products. The 2002 reform fundamentally restructured sales law to transpose the EU Consumer Sales Directive (1999/44/EC), and the 2022 reform implemented the EU Digital Content Directive (2019/770) and the Sale of Goods Directive (2019/771), substantially modernising the law of digital products and goods with digital elements.

Obligations of the Parties

Section 433 BGB defines the core obligations. The seller (Verkaufer) is obliged to deliver the thing to the buyer and transfer ownership of the thing. The seller must deliver the thing free from material and legal defects (frei von Sach- und Rechtsmangeln). The buyer (Kaufer) is obliged to pay the agreed purchase price and accept the delivered thing.

Section 433(1) BGB states that the seller must deliver the thing to the buyer and procure ownership of the thing for the buyer. The seller must provide the thing in the condition and quality specified by the contract. For the sale of generic goods (Gattungskauf), the seller must deliver goods of average kind and quality (Section 243 BGB). For the sale of a specific thing (Stuckkauf), the seller must deliver the specific item as it exists at the time of sale, subject to warranty obligations for defects.

Passing of Risk

The passing of risk (Gefahrtragung) is governed by Sections 446-447 BGB. In an ordinary sale, the risk of accidental loss or deterioration passes to the buyer upon delivery of the thing (Ubergabe). Delivery occurs when the buyer obtains actual physical possession or control of the thing. Until delivery, the seller bears the risk and remains obliged to perform or is released from the obligation if the thing is destroyed (Section 275 BGB).

In a sale by dispatch (Versendungskauf) under Section 447 BGB, the risk passes to the buyer when the seller delivers the thing to the carrier for shipment. This is an exception to the default delivery rule and applies only where the buyer has requested shipment to a place other than the place of performance. The seller is not liable for the carrier’s conduct but must exercise care in packaging and selecting the carrier.

Place of performance (Leistungsort) is the seller’s place of business under Section 269 BGB unless otherwise agreed. Where the buyer is a consumer purchasing from a business, the delivery risk passes only upon actual delivery to the consumer under Section 447(2) BGB, reversing the dispatch-sale rule.

Warranty for Material Defects

The seller’s liability for material defects (Sachmangel) under Sections 434-437 BGB is a central feature of German sales law. A thing is free from material defects if it conforms to the objective, subjective, and legal requirements applicable at the time of the passing of risk.

Subjective requirements (Section 434(1) BGB): the thing must conform to the agreed quality (Beschaffenheit). The parties’ agreement determines the required characteristics. Objective requirements (Section 434(2)-(3) BGB): where no quality has been agreed, the thing must be suitable for the purpose indicated by the contract or, failing that, for ordinary use, and must exhibit the quality usual in things of the same type that the buyer can expect. The 2022 reform introduced a new two-tier framework: subjective conformity is primary; objective requirements apply by default where the parties have not specifically agreed on quality.

Legal defects (Rechtsmangel) under Section 435 BGB exist where third parties can assert rights in relation to the thing, including ownership claims, security interests, or other encumbrances.

The buyer’s remedies for defects (Section 437 BGB) are:

• Subsequent performance (Nacherfullung): the buyer may demand repair (Nachbesserung) or replacement (Nachlieferung) at the seller’s choice (Section 439 BGB)
• Rescission (Rucktritt): if subsequent performance fails, the buyer may rescind the contract (Sections 440, 323, 326(5) BGB)
• Price reduction (Minderung): the buyer may reduce the purchase price (Section 441 BGB)
• Damages (Schadensersatz): the buyer may claim damages in lieu of performance under Sections 280, 281, 283, 311a BGB, including damages for consequential loss

The seller has the right to a second attempt at performance (zweites Andienungsrecht): the seller may make two attempts to cure the defect before the buyer may rescind or claim damages, unless the second attempt would be disproportionate or the defect is substantial.

Limitation of Claims

The limitation period for claims for defects in sales of movable goods is two years from delivery (Section 438(1)(3) BGB). For immovable property (real estate), the period is five years from transfer (Section 438(1)(2) BGB). Where the seller has fraudulently concealed a defect, the limitation period is the regular three years from knowledge (Section 438(3) BGB).

The two-year period applies to goods; for construction works and building materials, the period is extended. The commercial law (Handelsgesetzbuch, HGB, Section 377) imposes stricter requirements on merchants: the buyer must inspect goods promptly after delivery and notify the seller of any defects without delay, or the goods are deemed accepted. This inspection and notification obligation does not apply to consumers.

Consumer Sales

Consumer sales (Verbrauchsguterkauf) are governed by Sections 474-479 BGB, implementing the EU Consumer Sales Directive. These provisions apply to contracts between a consumer (Verbraucher) and a business (Unternehmer). Key protections include:

• The statutory warranty period of two years cannot be reduced below two years by contract (Section 476 BGB); for used goods, the period may be reduced to one year
• The burden of proof that the defect existed at the time of the passing of risk shifts to the seller for defects appearing within one year of delivery (Section 477 BGB) — the reversal of the burden of proof (Beweislastumkehr)
• Consumers are entitled to a reasonable period for repair or replacement; the seller must bear the costs of subsequent performance, including transport costs
• Business warranty claims may not be excluded or limited in advance where the defect is due to the seller’s gross negligence or intentional conduct

Digital Products

The 2022 reform introduced special rules for contracts for digital products (digitale Produkte) and goods with digital elements, implementing the Digital Content Directive and the Sale of Goods Directive. New Sections 327-327v BGB create a separate regime for digital products, including software, digital content, and digital services. For goods with digital elements (e.g. smart devices), the sales rules apply to the physical component, while the digital element is governed by the digital product rules.

Key features include: (1) the digital product must be fit for digital use and updated as required; (2) the seller must provide updates necessary for conformity throughout the period of supply; (3) the limitation period for digital products supplied over time is governed by the duration of the supply contract; (4) modifications to the digital product after conclusion of the contract are subject to specific requirements, including notice and the right to terminate without penalty. The reform represents a significant extension of traditional sales law into the digital domain, reflecting the increasing convergence of goods and services in the digital economy.