Federal Court of Justice ruling rocks online coaching industry and declares contracts without official approval null and void
The market for online training has grown rapidly in recent years and has long since become standard practice for many self-employed people and companies. The ruling by the Federal Court of Justice on June 12, 2025, sends a clear warning not only to the coaching and mentoring industry, but to the entire continuing education sector. Anyone who sells online programs without official approval risks having their contract declared null and void. However, the scope of application of the Distance Learning Protection Act has also been clearly defined: distance learning contracts do not only apply to consumers, B2B contracts, i.e., contracts between companies, also fall under the Distance Learning Protection Act. Attorney Sascha C. Fürstenow explains below what the ruling means for consumers and providers.
Background to the ruling
The subject of the dispute was a contract for a “9-month business mentoring program on financial fitness” that had been concluded for over 47,000 EUROS. The online program was intended to help participants acquire entrepreneurial skills and impart knowledge in the areas of marketing, sales, personal development, and financial freedom. The agenda of the online program also included regular online meetings and live calls, which were recorded and could therefore be accessed at a later date. The customer paid half of the total price and participated in the program section for seven weeks. The actual “mentoring program” was to begin later, but the customer terminated the contract and declared it void on the grounds of fraudulent misrepresentation.
The Higher Regional Court of Stuttgart ruled in the previous instance that the customer was entitled to a refund of the remuneration paid pursuant to Section 812 of the German Civil Code, as the contract concluded was void pursuant to Section 7 of the German Distance Selling Act, since the mentoring program did not have the required approval pursuant to Section 12 Distance Learning Protection Act.
According to the Federal Court of Justice, the following criteria constitute distance learning
In this case, the Federal Court of Justice affirms the decision of the Higher Regional Court and confirms that this constitutes distance learning within the meaning of Section 1 of the Distance Learning Act and defines distance learning “as the contractual, remunerated imparting of knowledge and skills, in which the teacher and the learner are exclusively or predominantly separated in terms of location and the teacher or his representative monitors the learning success. “ The terms ”knowledge“ and ‘skills’ are to be interpreted broadly and refer to the imparting of ”any” knowledge and skills, regardless of their content.
Imparting knowledge and skills
The first requirement, the transfer of knowledge and skills, is fulfilled in this case, as the aim here was to impart knowledge to consumers in various areas relevant to entrepreneurial activity. Although the program provides for two individual online sessions with a personal coach “to resolve personal blockages,” this is not the main focus. The Federal Court of Justice affirms that the focus of the teaching here is on imparting knowledge and that the program predefines learning objectives that are independent of the specific goals and activities of the various participants.
Spatial separation
The second prerequisite for affirming distance learning, namely, the spatial separation between the teacher and the learner, is also fulfilled here.
Monitoring learning success
The third criterion, monitoring of learning success by the teacher, is also fulfilled. In the opinion of the Federal Court of Justice, this criterion must be interpreted broadly and can be affirmed on the basis of the program description, as participants are expressly given the opportunity to ask questions relating to the material learned in the online meetings and communication channels. Although Section 1 Distance Learning Protection Act requires monitoring by the teacher, it is not necessary for the teacher to ask the participants questions to check their learning. It is therefore sufficient if, conversely, the participants can ask questions. Both the right to ask questions about the learning content taught and the required homework mentioned in the program description justify the criterion of learning success monitoring.
According to the Federal Court of Justice, B2B contracts are also affected
Finally, the Federal Court of Justice explains that the scope of application of Section 12 Distance Learning Protection Act is not limited to B2C contracts, but also applies to contracts between businesses. The Federal Court of Justice justified this by stating that the wording of Section 2 Distance Learning Protection Act refers to “organizers” and “participants” and that a person who concludes a distance learning contract as an entrepreneur is therefore also a participant.
Current ruling of the Munich Regional Court of August 8, 2025: Everything depends on the individual case
The courts are already following the criteria of the Federal Court of Justice ruling of June 12, 2025. In a recent ruling, the Munich Regional Court made it clear that not all online courses can be regarded as distance learning across the board. The participant demanded a refund, citing the Distance Learning Protection Act. The Munich Regional Court did not grant this request, as in this case the support provided was equivalent to face-to-face support, with the possibility of participating in live calls several times a week and receiving additional VIP support. It justified this by stating that such digital support ensures the same level of support as face-to-face events and therefore sees no reason to apply the FernUSG in such cases and denies the spatial separation in this case.
What does the Federal Court of Justice ruling mean for coaches and participants, consumers, and entrepreneurs?
If the above characteristics are met, the Federal Court of Justice considers the scope of application of the Distance Selling Act to be open and thus the need for state approval. If no approval is available, the contract is to be considered void and there is a claim for repayment. An important point of the ruling is that there is now clarity about what constitutes distance learning within the meaning of the law. But the fact that not only “consumers” are protected, but also entrepreneurs, is also of great significance for the entire coaching industry, which often caters to entrepreneurs and start-up clients. Online coaching for entrepreneurs is often more expensive than for “laypeople,” explains attorney Fürstenow.
The following applies to participants in such online coaching programs: If a contract is void due to lack of approval, they are entitled to a refund of the fees paid. In this case, the provider is also not entitled to compensation for lost value, there is no obligation to pay for videos or live calls that have already been viewed. To verify your refund claims, you should seek legal assistance, as providers usually do not respond to letters written independently. In addition, some questions have not been fully answered in the Federal Court of Justice ruling, so legal loopholes remain.
However, as a provider of online coaching, you should also have a legal review carried out to determine whether your coaching program requires a license and whether it falls within the scope of the Distance Learning Protection Act. This will allow you to design your online coaching with confidence and avoid risks in the future.
Attorney Sascha C Fürstenow will be happy to advise you on this topic and offers a free and non-binding initial assessment of your case in advance.