Contract for the Provision of Digital Content

A new type of contract for the provision of digital content has been part of the Czech civil code since January of this year. The amendment has transposed into the Czech legal system the Directive of the European Parliament and of the Council (EU) 2019/770 of 20 May 2019 on certain aspects of contracts for the provision of digital content and digital services, and the Directive of the European Parliament and of the Council (EU) 2019/771 of 20 May 2019 on certain aspects of contracts for the sale of goods, amending Regulation (EU) 2017/2394 and Directive 2009/22/EC, and repealing Directive 1999/44/EC. What exactly does the amendment introduce, and what changes does it bring?

The concept of Digital Content

The subject of the newly introduced contract for the provision of digital content is, as its name suggests, the provision of digital content or digital content services. The term digital content is defined by law as an item in digital form, i.e., an item without any tangible medium. This broad definition includes any data created and provided in digital form, whether it be audio and video files, computer programs, apps, digital games, or e-books.

The mentioned regulation will be of particular importance in the context of concluding contracts relating to the provision of services based on the Software as a Service (SaaS) model. The SaaS model allows users to utilize various applications online via the internet without the need to download and install specific software on their devices. It is a concept many of us encounter daily, whether using tools like Google Calendar or cloud storage similar to Dropbox.

When will the amendment concern you?

You should pay attention if you offer mainly the following digital content or services:

  • Cloud-based applications
  • Platforms for streaming content
  • Social networks where users can upload their own content
  • Online dating platforms
  • Digital games
  • Other services based on the SaaS model

However, it is essential to emphasize that the new legislative adjustment relating to contracts for the provision of digital content explicitly does not include products labeled as ’things with digital properties’. This means that if your activity involves selling household appliances, such as smart vacuums with integrated software essential for their function, there is no need to particularly engage with the provisions of the digital content contract.

What key obligations does the amendment introduce?

The new legislative adjustment clearly specifies that the delivery of digital content is realized by making it accessible, and this accessibility should occur without undue delay after concluding the contract. You can also make the content accessible on a physical or digital device chosen by the customer.

The provider has, in particular, the following obligations apply:

  • Assure the user that the digital content will be without defects throughout the contract’s duration.
  • Provide the user with the latest version of the digital content at the time of contract conclusion.
  • Ensure necessary updates during the contract so the user can use the content according to the agreed terms.

Additional rules depend on whether the contractual relationship is set in a B2B (business-to- business) or B2C (business-to-consumer) mode. For B2C relationships, beyond the above, for example, the following applies:

  • The provider fundamentally cannot rid itself of its statutory obligations.
  • The provider is responsible for correctly connecting the digital content to the consumer’s digital environment, e.g., for compatibility with the Android system, if declared by the provider.
  • Digital content must generally correspond to the usual properties of digital content of the same kind that the consumer could reasonably expect.
  • The consumer has (with some exceptions) the option to withdraw from the contract concluded remotely within 14 days of its conclusion.

Providers should also check the current status of existing contracts and consumer terms and conditions, as the new rules apply to B2C relationships also to previously concluded contracts that have not yet expired.

Do you have a question regarding contracts for the provision of digital content? Don’t hesitate to contact us at info@stuchlikova.com or at tel. +420 222 767 393.