cooperation.law

Acting together binds us.

Service contract

The question

How do people work together when what is owed is not a result but the activity itself?

In brief

Under a service contract (Dienstvertrag) the person providing services owes the promised services, not their success (Section 611 German Civil Code (BGB)). What exactly is to be done is therefore settled as the work goes on, by agreement or, in employment, by instruction. The closer the cooperation, the further the duties of protection and mutual regard extend. Online courses and coaching may fall under the Distance Learning Protection Act (FernUSG), whose scope the Federal Court of Justice (BGH) clarified considerably in 2025 and 2026.

The law

Activity for remuneration

Under a service contract, the party promising services must render them and the other party must pay the agreed remuneration (Section 611(1) BGB). Services of any kind may be the subject (Section 611(2) BGB): consultancy, teaching, coaching, medical treatment, management.

The difference from the contract for work lies in the risk. A teacher owes good teaching, not the pupil’s success; a consultant owes careful advice, not the client’s commercial success. The service contract therefore has no regime for defects of its own. Poor performance may give rise to damages under the general rules (Section 280(1) BGB); the statute provides no price reduction.

Because the outcome is open, the cooperation has to be coordinated continuously: what matters today, what is needed next, what must change. In this sense a service contract is more relationship than exchange.

Employment contract

The employment contract is a special service contract. The employee undertakes to perform work for another that is subject to instructions and determined by others, in personal dependence (Section 611a(1) sentence 1 BGB). The right to give instructions may concern the content, performance, time and place of the work (Section 611a(1) sentence 2 BGB). Whether there is an employment contract depends on an overall assessment; if the actual performance shows an employment relationship, the label in the contract is irrelevant (Section 611a(1) sentence 6 BGB).

Instruction is a one-sided form of coordination, but not an unlimited one. The employer must exercise the right to give instructions at reasonable discretion (Section 106 sentence 1 Trade Regulation Act (GewO)), that is, weighing the interests of both sides.

Care and regard

The person entitled to the services, such as the client or employer, must arrange premises, equipment and the services themselves so that the provider is protected against danger to life and health. This applies as far as the nature of the service permits (Section 618(1) BGB). Beyond that, Section 241(2) BGB imposes a general duty to have regard to the other party’s rights and interests. In employment this is traditionally called the employer’s duty of care and the employee’s duty of loyalty, which includes confidentiality about business secrets.

Termination

Service relationships end when the agreed term expires or by notice (Section 620 BGB). Notice periods are governed by Section 621 BGB for services and Section 622 BGB for employment, where the Protection against Dismissal Act may also apply. Either party may terminate without notice for a compelling reason within two weeks of learning of it (Section 626 BGB).

Section 627 BGB matters for consultancy and coaching. Where the provider renders services of a higher kind that are customarily entrusted on the basis of special trust, and is not in a permanent service relationship with fixed pay, the contract may be terminated at any time without a compelling reason. Someone who no longer trusts the other side should not be forced to keep working with them. The provider may not, however, terminate at an inopportune time unless there is a compelling reason (Section 627(2) BGB): the other side must be able to obtain the services elsewhere in time.

Online

Consultancy and teaching online

Services lend themselves to being provided online because no finished work has to be handed over. Advice in a video call, language lessons live online or supervision by telephone are service contracts just as they are on site. The parties should agree on channels, times and whether sessions are recorded. A recording is processing of personal data and needs a legal basis, see Data and rights.

Working online

In employment, working online above all blurs the line between working time and time off. The right to give instructions covers the place of work; occupational safety and working-time law apply at home too. After the end of daily working time, a rest period of at least eleven consecutive hours must in principle be observed (Section 5(1) Working Hours Act (ArbZG)). Employers must record working time (Federal Labour Court (BAG), order of 13 September 2022 – 1 ABR 22/21).

Online courses, coaching and distance learning

The Distance Learning Protection Act applies where knowledge and skills are taught for payment on a contractual basis. Two further features must be present: teacher and learner are exclusively or predominantly physically separated, and the teacher or the teacher’s agent monitors learning progress (Section 1(1) FernUSG). Distance learning courses require approval by the State Central Office for Distance Learning (Section 12 FernUSG). A contract for an unapproved course is void (Section 7(1) FernUSG).

In its judgment of 12 June 2025 the Federal Court of Justice held that the Act protects not only consumers but also businesses that book a distance learning course (BGH, III ZR 109/24). The case concerned a nine-month online mentoring programme. The court set a low threshold for monitoring learning progress: it suffices that the participant may, under the contract, ask questions to check their own understanding. For lack of approval the contract was void, and the participant could reclaim the fee paid. No compensation for the value of the services was deducted, because the provider had not shown that the participant had saved any expenses as a result.

In its judgment of 5 February 2026 the court narrowed the notion of physical separation (BGH, III ZR 137/25). It read the Act more narrowly than its wording, in line with its purpose (teleological reduction). Teacher and learner are therefore separated only insofar as knowledge is conveyed across a physical distance and not by means of bidirectional, synchronous communication. Teaching live online is equivalent to teaching on site where participants can contact the teacher without particular effort. Recordings of synchronous parts that, under the agreement, are later made available on demand count as asynchronous teaching. What matters is what was agreed, not how the course actually ran. The case concerned an online training programme with learning videos and live online sessions and was remitted to the court of appeal.

For providers and participants this means that a course or coaching programme held predominantly live online is not distance learning. Where pre-recorded videos, recordings on demand and assignments with feedback predominate, the Act may apply, even between businesses. How predominance is to be measured has not yet been settled. The court looks to the circumstances of the individual case and names as possible reference points, for example, the content and importance of the individual parts for learning success or the agreed duration of the learning units. In August 2026 the Federal Ministry of Education, Family Affairs, Senior Citizens, Women and Youth published a ministerial draft under which the Act is to be repealed; the legislative process has not yet been concluded.

Relevant phases

Limits of this overview

This page outlines German service contract law and some questions of employment law. Employment law as a whole, with dismissal protection, co-determination and collective agreements, is not covered.

As at 30 September 2026