Contributed By Luther Rechtsanwaltsgesellschaft mbH (Cologne)
Apart from specific sectors such as healthcare and banking and finance, and excepting a number of rules protecting employees’ rights, German law allows parties comparative freedom in how they choose to structure an outsourcing project. If and as far as an outsourcing concerns personal data (as is almost always the case), specific rules need to be obeyed under the data protection framework, namely the GDPR, which applies throughout the EU.
General civil law (civil code/commercial code) is relevant for fundamental aspects such as performance, consideration, warranty and liability. An outsourcing project is made up of an abundance of individual services that must be assigned to the contract types regulated in the German civil code (BGB):
If the outsourcing provider is contracted to achieve a specific goal, the law on contracts for work and services applies. If, however, it is only contracted to perform one action, ie, merely to make an effort (eg, to operate a call centre), the service is assessed in accordance with the provisions of the service contract. Accordingly, contracts should provide for clear language as to expectations and consequences in cases of poor performance or failure.