Case

Cinderella, a prosperous businesswoman, bought on the stock market a large number of shares in a company of growing reputation. The sale had hardly been concluded when it was revealed in the press that the company had already lost various important contracts to a Japanese competitor. The value of the shares dropped abruptly. What remedy, if any, is available?

Discussions

Austria

According to the predominant scholarly opinion each party is obliged to give full information to the other party if so required. The obligation to provide information is partly derived from the contract, partly by law. As far as precontractual obligations are concerned a legally requested obligation for disclosure about important aspects of the subject matter of the contract can be assumed by analogy with the doctrine of culpa in contrahendo. Cinderella, therefore, has a remedy against her business partner only if he breaches his duty to disclose. However, the facts and circumstances do not indicate this to be the case. One would expect Cinderella to know how to take care of her business and it is generally known that shares do include such a risk. If Cinderella had false expectations about the increase in the value of the shares she has made a non-fundamental mistake as to motive (§ 901 ABGB). As the duty to inform cannot be interpreted extensively the bank would have been obliged to inform only if the news in the press had already been known to the bank.