Federal Court of Justice clarifies scope of Distance Learning Protection Act for digital learning offerings

The Federal Court of Justice (Bundesgerichtshof – BGH), in its ruling dated 12 June 2025 (III ZR 109/24), has addressed for the first time the issue of how to specify the provisions of Germany’s almost 50-year-old Distance Learning Protection Act (Fernunterrichtsschutzgesetz – FernUSG) when learning content is delivered using modern digital technology. This long-awaited decision could have significant implications not only for ongoing litigation but also for the proposed initiative of 14 April 2025 in the coalition agreement to modernise said Act in response to the increasing digitalisation of the educational landscape.

I. Facts

The Court’s ruling was based on a nine-month “Financial Fitness Business Mentoring Programme” priced at €47,600. According to the programme description, the contract included online meetings (on a bi-weekly basis, which were recorded for later use by participants), instructional videos, homework, twice-yearly workshops, and possibly individual tuition. The provider did not have approval under the Distance Learning Protection Act. The claimant terminated the contract after a few weeks and requested a refund of the payments made. The provider did not accept the termination and counterclaimed for payment of the remaining balance.

II. Key points of the decision

1. Distance Learning Protection Act applies to contracts between entrepreneurs

The Court interprets the protective purpose of the Distance Learning Protection Act broadly. It applies not just to contracts between an entrepreneur and a consumer, but also between two entrepreneurs. The law covers all individuals who enter into a contract with an organiser for the provision of distance learning as defined in section 1 of the Distance Learning Protection Act, regardless of whether this is for commercial or independent professional purposes (paragraphs 31–40).

2. Broad interpretation of “imparting knowledge and skills”

The Distance Learning Protection Act applies only to distance learning. The term “distance learning” is defined in section 1(1) of the Act. It requires, among other things, the “paid imparting of knowledge and skills on a contractual basis.” According to the Court, this includes “any” imparting of knowledge and skills, irrespective of the exact content or any “coaching” or “mentoring” labels. The Court rejects a limitation of the scope to knowledge or skills of a certain “minimum quality” (paragraphs 20-24).

3. Predominant spatial separation in an online context

The term “distance learning” also requires that “the teacher and the learner are entirely or predominantly spatially separated” (section 1(1)(1) of the Distance Learning Protection Act). According to the (correct) view of the State Central Office for Distance Learning (Staatliche Zentralstelle für Fernunterricht – ZFU) (see its FAQ), the minimum requirement of predominant separation is not met in the case of purely online instruction that takes place only in real time (synchronously).

The Court did not, however, need to address this question as it classified the provider’s offering as predominantly non-simultaneous (asynchronous) based on the programme description (paragraphs 25-26). In addition to the learning videos and homework, the Court also classifies the “simultaneous” online meetings as asynchronous teaching components. This is because the online meetings are recorded and subsequently made available to participants.

4. Low-threshold requirements for monitoring learning success

Another requirement for distance learning under the Distance Learning Protection Act is that “the teacher or their representative monitors learning success” (section 1(1)(2) of the Distance Learning Protection Act). Here, the Court adheres to its previous case law. According to this, monitoring of learning success is already in place if participants have the opportunity to ask questions about the learned material personally and receive feedback (Federal Court of Justice, ruling of 15 October 2009, III ZR 310/08). This can occur in online meetings, via email, or in group forums. A single opportunity for a personal learning check is enough to fulfil the criterion (paragraphs 27-30). Whether the learning check envisaged or at least suggested in the programme description actually takes place is irrelevant.

5. Legal consequences of a lack of official approval

If the required approval for offering distance learning is not in place (section 12(1) of the Distance Learning Protection Act), the distance learning contract is null and void (section 7(1) of the Distance Learning Protection Act). The participant is generally entitled to reclaim the fee paid (first alternative of the first sentence of section 812(1) of the German Civil Code (Bürgerliches Gesetzbuch – BGB)).

However, the Court considers it possible for the provider to set off a claim against this. The condition for this is that the provider had no knowledge of the breach of the Distance Learning Protection Act and is able to demonstrate the value of the services received by the participant. For the latter, the Court requires the provider to show that the participant would otherwise have engaged another authorised party and paid them a corresponding fee. If the provider can demonstrate and possibly prove this, its claim for compensation for value received (section 818(2) of the Civil Code) is automatically set off against the participant’s claim for compensation (known as the “balance theory”) (paragraphs 42-47).

III. Outlook

The Court interprets the scope of the Distance Learning Protection Act very broadly. Contracts between entrepreneurs are covered, so the approval procedure at the State Central Office for Distance Learning must generally be followed here as well. If learning content is delivered synchronously by teachers to learners, this does not necessarily rule out the application of the Distance Learning Protection Act if the educational unit is recorded and made available to learners afterwards. Providers of learning content without approval from the State Central Office for Distance Learning would be wise to critically assess their products in light of this very broad interpretation of the Distance Learning Protection Act; they may need to either change their offering or apply for approval.

On a positive note, the Court considers it possible for a provider to claim remuneration for their offering. However, it is necessary to adequately show that the participant would otherwise (assuming the provider did not exist) have engaged another authorised party for the teaching and paid them an equivalent fee. Although the requirements for a claim to compensation for value received are thus fairly strict, providers should not comply too hastily with reimbursement demands. They should also consider that the issue of breaches of the Distance Learning Protection Act has long been and is now more than ever on the agenda of claimant law firms with relevant experience in mass claims. It is important to instruct a law firm specialising in defending such proceedings early on and to develop a defence strategy.