Providers of online coaching services take note: The German Federal Court of Justice (BGH) has recently provided clarity on which coaching offerings qualify as “distance learning” and thus, fall under the approval requirement of the German Distance Learning Act (FernUSG).

Anyone offering digital coaching models without the required official approval is taking a major risk. In such case, provider’s instructional contracts may be considered void. Customers may reclaim all fees paid and providers might even face fines.

After the BGH ruled in 2025 that common online coaching formats and other digital instructional models may fall under the definition of “distance learning” according to the FernUSG (BGH – Judgment of June 12, 2025 – III ZR 109/24), many coaching providers became concerned.

Under Section 12 (1) FernUSG, distance learning courses require official approval. This approval, granted by the Central Office for Distance Learning (“ZFU”), comes at a cost. And it applies to each individual course, meaning that providers offering several different courses must obtain approval for each one separately. For providers, the decisive question as to whether their offering has a lawful and economically viable basis is therefore: Are their coaching models classified as distance learning?

In our Regulatory wake-up call last year, we outlined when providers must expect their instructional models to be subject to approval. The assessment hinges on the definition of distance learning set out in Section 1(1) FernUSG: distance learning refers to the

• contractual and remunerated transmission of knowledge and skills,
• where the provider and participant are exclusively or predominantly physically separated,
• and where the provider or their agent monitors the learner’s progress.

We pointed out the key elements of this definition and noted that the term “participant” covers not only consumers but also businesses. Accordingly, the FernUSG also applies to B2B coaching contracts. We further outlined how providers can obtain the required approval from the ZFU, and what steps they must take if they failed to secure approval and are now facing potential refund claims. In February 2026 the BGH has further clarified the criteria for distance learning (BGH – Judgment of February 5, 2026 – III ZR 137/25). In this ruling, the BGH addressed the requirement of “physical separation”, on which the classification as distance learning stands or falls.

The prevailing view in the literature has long argued that the requirement of physical separation cannot be understood as referring merely to providers and participants being located in different places. Rather, it must be understood to require that the delivery of instructional content and its reception by the participant take place at different times, i.e. asynchronously. This interpretation was based on the purpose of the FernUSG, which was designed to address the specific risks associated with learning formats in which teaching and learning are separated not only spatially but also temporally, thereby limiting direct interaction and control. However, the BGH had not previously confirmed this interpretation. In its decision of 12 June 2025, the court explicitly raised the issue but ultimately left it unresolved.

Meanwhile, voices have also emerged opposing the requirement of asynchronicity. They rely on the clear wording of Section 1 (1) FernUSG, which contains no such requirement. It was argued that the protective purpose of the FernUSG is also engaged by live online coaching, because the risk posed by dubious coaching providers is significantly higher online. Moreover, according to the reasoning of the government’s draft of the FernUSG, the legislature acknowledged the possibility that instruction can be transmitted into another room and yet required only spatial and not temporal separation.

In its February 2026 ruling, the BGH has now expressly affirmed this requirement asynchronicity. The judgment also provides important guidance on distinguishing permissible pricing from usurious pricing in coaching contracts.

Distance learning only where knowledge is transmitted “asynchronously”

According to the BGH, the decisive factor is the purpose and intent of the historical legislator when the FernUSG was enacted in 1976. The legislator sought not only to distinguish distance learning from in‑person instruction, but especially from direct instruction. In direct instruction, knowledge is transmitted through direct communication, giving participants – similar to in‑person settings – the opportunity to contact the provider directly and without effort. By contrast, the essence of distance learning lies in the participant working through materials provided by the provider independently and with flexible scheduling.

When the FernUSG was enacted, the legislator did not foresee the possibility of real-time interaction via online platforms. The legislator may have recognized the possibility of transmitting instruction into another room, but not the possibilities of synchronous, bidirectional communication that exist today. Therefore, the BGH has now clarified that the statutory requirement of physical separation between provider and participant only fulfills its intended purpose where the structure of the course reflects the core characteristic of distance learning: asynchronous communication. In other words, the instructional content must be delivered at one point in time and retrieved by the participant at another. The risk posed by dubious providers does not alter this conclusion. Customers are protected from dubious providers through other regulations.

This has important practical consequences. The BGH makes clear that online instruction involving real-time interaction between provider and participant does not qualify as distance learning within the meaning of the FernUSG. Even if teaching takes place exclusively online, formats such as live virtual classrooms, webinars with direct interaction or other synchronous teaching settings fall outside the statutory concept of distance learning.

For providers of digital coaching, this distinction is highly relevant: whether a format is structured synchronously or asynchronously determines whether the FernUSG applies at all – that is, whether contracts concluded without ZFU approval are void or not.

Compliance checks are essential when structuring hybrid models

Providers offering both live teaching units and additional learning materials for independent use must exercise particular caution, when assessing whether their services fall within the scope of the FernUSG, in order to avoid financial disadvantages and potential regulatory sanctions.

Under Section 1 (1) FernUSG, it is sufficient for “predominant” physical separation (more than 50%) to exist for the model to qualify as distance learning. Thus, for hybrid models, the decisive factor is the focus of the instructional contract, namely whether the synchronous or asynchronous components predominate.

When making this determination, the BGH stresses that what matters is not how the instruction is delivered in practice, but what the parties contractually agreed upon. It is irrelevant how the actual instruction occurred or to what extent the learner made use of the individual services. Consequently, contractual design becomes a critical compliance factor in hybrid models. Key questions include:

• How often and to what extent are real‑time teaching sessions agreed?
• Do these sessions provide for direct interaction?
• What specific materials (scripts, learning videos, etc.) are to be provided?
• Does the live instruction constitute the core of the training program, with materials being merely supplementary? Or is the reverse true?

Through careful contractual structuring, providers can proactively avoid having their offerings classified as distance learning.

Pricing may be based on market rates – even if the coaching market is generally characterized by “exorbitant prices”

Providers will also take note of the BGH’s statements regarding pricing. Much of the effort involved in providing coaching takes place in the preparatory stages – often invisible to the participant. While participants may perceive the fee as disproportionately high when compared to the actual time spent in live sessions, providers must rely on the fee to cover their overall preparatory work.

In the case at hand, the plaintiff argued that the objective value of the coaching services was grossly disproportionate to the fee charged, rendering the contract immoral and void under Section 138 (1) of the German Civil Code (BGB). Under German case law, contracts are typically considered immoral where the objective value of the performance is roughly twice the value of the counter performance. In such cases, providers risk nullity of the instructional contract and may not receive compensation even for services already rendered. The plaintiff considered these requirements to be met and therefore demanded reimbursement of the fee she had paid. The defendant provider countered that the fee was in line with market rates. The plaintiff would have none of that, asserting that the coaching market was generally characterized by “exorbitant prices” and that comparable learning videos were available online at much lower cost.

The BGH rejected the plaintiff’s reasoning. Whether comparable learning videos can be purchased at significantly lower prices is irrelevant, as such videos represent only part of the contractual performance. The objective value of coaching services is determined by the customary and economically still reasonable fee, which can be established through a market comparison.

The BGH’s statements offer legal certainty for providers: they may base their pricing on the customary market rates for comparable coaching services.

Strengthening your coaching model under the updated legal framework

Providers can now assess with greater certainty whether their offerings fall within the scope of the FernUSG and how pricing risks are evaluated under German law. At the same time, the rulings underscore the importance of careful contractual structuring and thoughtful product design, especially for hybrid formats. For providers, this is an opportune moment to review existing models and ensure that both regulatory and contractual frameworks support sustainable business operations.