Term and Origin of ‘Sale’
The term ‘Sale’ originates from English and generally refers to the sale or clearance of goods. In German-speaking countries, the word is mostly used to indicate a sales or discount promotion, where goods are offered at reduced prices. While the main focus from a marketing perspective is on attracting consumers, the legal classification and significance of the term ‘Sale’ is much more complex and requires consideration from various legal perspectives.
Legal Basis for Sales under the Term ‘Sale’
Civil Law
Conclusion of Contract and Declaration of Intent
Legally, the term ‘Sale’ refers to the conclusion of a purchase contract under §§ 433 et seq. BGB (German Civil Code). A ‘Sale’ offer is legally usually to be qualified as an invitation to submit an offer (invitatio ad offerendum). A legally binding purchase contract is only concluded once it is accepted by the consumer.
Condition of Goods and Liability for Defects
In practice, ‘Sale’ promotions often offer goods at reduced prices. These may include B-grade goods, remaining stock, or seasonal items. The goods offered in the ‘Sale’ are generally subject to the same rules on liability for defects (§§ 434 et seq. BGB) as other products. Any limitation of statutory defect rights (e.g. with blanket statements such as ‘Sale items excluded from exchange’) is only permissible under strict conditions and requires a transparent, individually agreed contract.
Consumer Protection Law
Disclosure Obligations
According to §§ 312 et seq. BGB and Art. 246a § 1 EGBGB (Introductory Act to the BGB), there are no exceptions for ‘Sale’ offers regarding information and notification duties. This specifically includes the obligation to clearly indicate the reduced price, the original price, product features, and in case of online contracts, the right of withdrawal.
Misleading Business Practices and Price Indications
The Act Against Unfair Competition (UWG) and the Price Indication Ordinance (PAngV) set strict requirements for the transparency and lawfulness of ‘Sale’ promotions. In particular, there must be no misleading statements about the amount of the price reduction or the actual original price. Breaches may lead to warnings and result in fines or claims for damages.
Withdrawal, Cancellation and Exchange Rights in ‘Sale’ Law
Right of Withdrawal in Distance Selling Contracts
For ‘Sale’ purchases made via the internet or other means of distance communication, consumers generally have a 14-day right of withdrawal under § 355 BGB. This right cannot be restricted simply because of the reduced price.
Returns and Exchange
Contrary to common belief, outside the right of withdrawal there is generally no entitlement to exchange or return faultless ‘Sale’ goods in physical retail stores, unless there is a contractual or goodwill arrangement from the provider.
Competition and Fair Trading Law in Connection with ‘Sale’ Promotions
Permissibility and Limitations of Discounts
Discount promotions such as ‘Sale’ are generally permitted under German law, provided they do not constitute unfair business practices. This is particularly relevant to the duration, type, and transparency of the price reduction. Linking prices to limited-time promotions (‘Sale today only’) is subject to competition law review and must not be misleading.
Warnings and Sanctions
Violations of the Price Indication Ordinance or the UWG in the context of ‘Sale’ advertising can be challenged by competitors, consumer associations, or authorities overseeing competition. In addition to cease-and-desist actions, damages and fines may be imposed.
Tax Aspects of ‘Sale’ Offers
VAT Treatment
The regular VAT rate applies to ‘Sale’ items unless reduced rates are specifically set. The price reduction must be included in the indicated final price, and VAT should be stated correctly.
Special Regulations for Individual Sectors
Clothing and Retail Trade
In particular, ‘Sale’ promotions are of significant economic importance in the clothing retail sector. The aforementioned legal framework applies here, supplemented by industry standards and extensive compliance requirements.
Groceries and Perishable Goods
In ‘Sale’ promotions involving food and perishable goods, food law plays an additional role. Products offered shortly before their expiration date in a ‘Sale’ are subject to special labeling requirements.
International Dimension of ‘Sale’
While the legal framework is largely harmonized in Germany and the EU, differing regulations may apply internationally, for example concerning sale promotions during particular shopping festivals (such as ‘Black Friday’).
Summary and Legal Assessment
The term ‘Sale’ is not independently defined in German law, but stands at the intersection of contract, competition, consumer protection, and tax law. Key legal principles include transparency, prohibition of misleading practices, fulfillment of disclosure obligations, and compliance with statutory warranty rights. For companies, legally compliant design of ‘Sale’ promotions is essential to avoid legal risks and costly warnings. Consumers benefit from protections under German and European consumer law, which provide that even discounted goods are subject to the same core rights without restriction.
Frequently Asked Questions
What statutory regulations apply to exchange and return rights for sale items?
When purchasing sale items in brick-and-mortar retail, there is generally no legal right of exchange or return. Such a right is only granted to the customer if the seller does so voluntarily, for example by indicating this in the store (‘Exchange possible within 14 days’). Different rules apply to the online purchase of sale items: Here, under §§ 312g, 355 BGB, consumers are entitled to a 14-day right of withdrawal, regardless of whether the goods are discounted or at regular price. Restrictions on this right of withdrawal are only permissible in the legally specified exceptions, such as personalized products, perishable goods, or unsealed hygiene items after opening. In case of defects, the regular warranty law applies to sale goods; a reduced price does not exclude claims for material or legal defects, unless the defect was known to the buyer at the time the contract was concluded or expressly stated as a reason for the price reduction (§ 442 BGB).
Is warranty excluded or limited when purchasing discounted goods?
Statutory warranty under §§ 437 et seq. BGB also applies without restriction to the sale of sale items. Retailers generally cannot completely exclude warranty for new goods, but for used goods, the period can be reduced from two years to one year (§ 476 BGB). Shortening or excluding the warranty for new goods through general terms and conditions is not effective. If a defect is expressly named as the reason for the reduction (‘second choice: due to weaving defect’), then warranty can be excluded for this defect; for all other defects, the warranty remains. Items purchased in the sale entitle the buyer to the usual rights in case of defects, such as subsequent performance, reduction, or withdrawal, as well as damages.
May different terms and conditions apply to discounted goods than to regular products?
General terms and conditions that unreasonably disadvantage customers or deviate from statutory provisions for consumer contracts may not be used for sale items (§§ 307-309 BGB). Individual agreements between retailer and customer are possible in specific cases, but blanket exclusions of exchange, withdrawal, or warranty rights are also legally ineffective for discounted goods. A special provision in the terms and conditions, for example excluding withdrawal for discounted goods in online trade, would violate mandatory consumer rights and is therefore not permitted.
How must price reductions be indicated legally?
According to § 1 (1) PAngV (Price Indication Ordinance), price reductions for consumers must be presented clearly and unambiguously. Since the implementation of the EU Directive 98/6/EC (Modernisation Directive) in 2022, the lowest price charged by the seller in the 30 days prior to the discount must be indicated for a reduced product (‘strikethrough price rule’). This requirement is intended to protect consumers from misleading price actions. Violations are an administrative offense and constitute misleading advertising under § 5 UWG. Retailers must ensure that all price information is given truthfully and transparently.
What disclosure obligations does the retailer have for sale items?
Retailers are obliged under § 312d BGB and Art. 246a EGBGB to inform consumers thoroughly about essential product features, total price, delivery times, rights of withdrawal, and the existence of any warranty rights, especially in online trade. These obligations also apply to sale goods. If there are particular restrictions (e.g. exclusion of individual exchange rights or notes for B-grade goods), this information must be clearly provided before the contract is concluded. Failure to do so can result in a warning and, in some cases, entitle the customer to withdraw from the contract.
Are there legal requirements for the duration and promotion of sale campaigns?
Following the abolition of the Discount Act and the Premiums Ordinance (2001), the duration and timing of sale promotions are generally free to choose. However, misleading statements can be relevant under competition law, for example if a sale is artificially depicted as time-limited even though the promotion is later repeated or extended – this may constitute an unfair commercial practice under § 5 UWG. In addition, marketing must comply with the transparency requirements of the law against unfair competition and price labelling law to avoid misleading consumers.
Are certain clauses permitted that restrict the return of sale goods?
Exclusions or restrictions of voluntary exchange or return rights for sale items are permitted, but must be communicated clearly and unequivocally before the contract is concluded. However, binding statutory rights (right of withdrawal for distance contracts, warranty for defects) must not be restricted, excluded, or undermined through terms and conditions or statements on receipts. Such provisions would constitute an unreasonable disadvantage for the consumer and are therefore legally inadmissible (see § 307 BGB). When voluntary return rights are granted, the retailer may impose objective restrictions for sale goods, provided these are transparent.
