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New Rules of Breach of Contract in Germany

Published online by Cambridge University Press:  27 October 2017

Wolfgang Ernst
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Extract

In 2001 the German legislator passed a law for the ‘Modernisation of the Law of Obligations’ (Schuldrechtsmodernisierungsgesetz—SMG). It encompassed new rules on breach of contract, a wholly new law of limitation of actions and new provisions for contracts of sale, contracts for services and loan. By the same Act the existing statute on standard contracts (Gesetz über Allgemeine Geschäftsbedingungen) and various other statutes for the protection of consumers were integrated into the German Civil Code (Bürgerliches Gesetzbuch—BGB). It was the most extensive amendment of the BGB since its enactment in 1900. Many of the legislative measures bundled together in the SMG had an EC-law background. We shall here consider only one aspect of the reform statute, namely the new rules on breach of contract and their relationship with European law.

Type
Research Article
Information
Cambridge Yearbook of European Legal Studies , Volume 5 , 2003 , pp. 333 - 356
Copyright
Copyright © Centre for European Legal Studies, Faculty of Law, University of Cambridge 2003

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References

1 BGBl. I 2001, s 3138 ff. On 2 January 2002, the consolidated text of the BGB was promulgated: BGBl. I 2002, s 42 ff.

2 On the history of the reform see: Reinhard Zimmermann, in: Ernst, W and Zimmermann, R, Zivilrechtswissenschaft und Schuldrechtsreform (Mohr Siebeck 2001), 1 ff., 13 ffGoogle Scholar; Dauner-Lieb, B, AnwaltKommentar BGB. vol 2—Schuldrecht (Deutscher Anwaltverlag 2002), 21 ffGoogle Scholar; Ehmann, H and Sutschet, H, Modernisiertes Schuldrecht (Franz Vahlen 2002), 1 ffGoogle Scholar; Canaris, C-W, Schuldrechtsmodernisierung (C H Beck 2001), ix ffGoogle Scholar.

3 der Justiz, Bundesminister (ed), Gutachten und Vorschläge zur Überarbeitung des Schuldrechts, vols I und II (Bundesanzeiger 1981)Google Scholar, Vol III (1983). On breach of contract see Ulrich Huber, Vol I 647–909.

4 der Justiz, Bundesminister (ed), Abschluβbericht der Kommission zur Überarbeitung des Schuldrechts (Bundesanzeiger 1992)Google Scholar.

5 Law of 5 July 1989, BGBl II 1989, s 586; I 1990, s 1477.

6 See in particular W Ernst, (1994) Neue Juristische Wochenschrift (2177, at 2178); ibid in: S Grundmann et al (eds), Europäisches Kaufgewährleistungsrecht (Heymanns 2000), 325 at 329 f.

7 Himmelschein, Jury, (1932) 135 Archiv der civilistischen Praxis (AcP), 255 ffGoogle Scholar; Jakobs, Horst Heinrich, Unmöglichkeit und Nichterfüllung (Bouvier 1969)Google Scholar; Wahl, Friedrich, Schuldnerverzug (Duncker & Humblot 1998), esp 100 ffGoogle Scholar; Huber, U, Festschrift H-F Gaul (Gieseking 1997), 217 ffGoogle Scholar; Kley, , Unmöglichkeit und Pflichtverletzung (Duncker & Humblot 2001)Google Scholar.

8 The endless complaints about the alleged incompleteness and deficiency of the German Civil Code, starting with the ‘fairy tale’ by Staub about the ‘lacuna’ that had to be closed with the concept of ‘positive misperformance’ (positive Vertragsverletzung), do not need to be retold here: for an overview see Huber, U, Leistungsstörungen (JCB Mohr 1999) Vol I, 1999, 79 Google Scholar.

9 U Huber, in Geiβ, K et al (eds) Festschrift 50 Jahre BGH (Heymanns 2000), Vol 1, 278 Google Scholar, n 119.

10 Directive1999/44 EC OJ L 171/12 of 7 July 1999.

11 The debate on the implementation of this Directive created a vast body of writing in Germany. See the bibliographies in Ernst and Zimmermann, n 2 above 735–739; in Grundmann et al n 6, above 383–402; and in Schwartze, A, Europäische Sachmängelgewährleistung beim Warenkauf (Mohr Siebeck 2001), 633–656 Google Scholar.

12 Text in Canaris n 2 above 3–347.

13 See III B 2 below.

14 See IV A below.

15 2000/35/EC OJ L 200 35.

16 2000/31/EC OJ L 178 1.

17 Procedural aspects of the former Standard Contract Terms Act ended up as a free-standing statute for prohibitory actions or injunctions against unfair contract terms (Unterlassungsklagengesetz—UKlaG).

18 Previously §§ 361a, 361b BGB.

19 For the proceedings of a conference held on 17 and 18 November 2000 in Regensburg, see Ernst and Zimmermann n 2 above and an account by Jakobs, Horst Heinrich, Juristenzeitung (JZ) 2001, 27 ffGoogle Scholar. For the proceedings of a conference on 22 January 2001 in Münster see Schulze, R and Schulte-Noelke, (eds), Schuldrechtsreform vor dem Hintergrund des Gemeinschaftsrechts (Mohr Siebeck 2001)Google Scholar.

20 Text in Canaris n 2 above 349–428.

21 For details on the legislative debates, see Ernst, W in Münchner Kommentar zum Bürgerlichen Gesetzbuch, Vol 2a: Schuldrecht—Allgemeine Teil (4th edn CH Beck 2003) § 275 No 6 fGoogle Scholar.

22 See also Zimmermann, R, ‘Breach of Contract and Remedies under the New German Law of Obligations’ (UNIDROIT 2002)Google Scholar.

23 More precisely, one should say ‘every breach of an obligation’.

24 §§ 326, 285 BGB1900.

25 Jakobs, n 7, 27 ff, esp 37 ff; U Huber, n 8, 78 ff.

26 As to § 281 BGB, and section 2c herein.

27 Under § 323 BGB, one is concerned with late performance without proof of fault (see s 4), rather than ‘delay’ in a technical sense, as defined by § 286 BGB; see below B 3.

28 See s B 2.

29 Schultz, M, in: Westermann, HP (ed), Das Schuldrecht 2002 (Boorberg 2002), 17, 21 ffGoogle Scholar; U Huber, in Ernst and Zimmermann n 2 above, 31, 93 ff; Schapp, JZ 2001, 583; Stoll, JZ 2001, 589, 593; Magnus in Schulze, n 19 above, 67 ff; Canaris, JZ 2001, 511 f and 523; Schlechtriem, JHR 2001, 12, 16; Ernst n 21 above, § 280 No 9 ff.

30 Further Ernst n 21 above § 280 No 11–19; similarily now Huber, U, in Eckert, J and Delbrück, J (eds) Reform des Deutschen Schuldrechts (Nomos 2003), 23 ffGoogle Scholar.

31 § 437 BGB1900.

32 Most recently, Bundesgerichtshof, 114 Entscheidungen des Bundesgerichtshofs in Zivilsachen (BGHZ) 118 ff, at 120; U Huber n 8 above § 22 II, s 531 ff (not uncontested).

33 Cf the Bill, BT-Drucks. 14/6040, 132; also Grundmann in Münchner Kommentar, n 2 at § 276 No 180.

34 The Zusicherung of former §§ 459 II, 463 s 1 BGB1900.

35 § 279 BGB 1900.

36 For details see Grundmann, in Münchner Kommentar, n 2 at § 276 No 171 ff.

37 Ernst n 21, § 281 No 1.

38 Ernst n 21, § 280 No 5, 66–70, § 281 No 1, 110 ff.

39 See s II B 2.

40 Ernst n 21, § 280 No 53, 65–71.

41 S Gsell, in: Dauner-Lieb, B et al (eds), Das neue Schuldrecht in der Praxis (Heymanns 2003), 321 ffGoogle Scholar; Huber, P and Faust, F, Schuldrechtsmodernisierung, (CH Beck 2002), ch 1 No 5 ffGoogle Scholar; Ernst n 21, § 284.

42 As was the case under the old law, Cf § 326 IS 2 BGB1900.

43 For proposals to tackle this problem see Ernst n 21, § 323 No 150, 155, 168 ff.

44 It had already been suggested that the provisions in the original BGB could be interpreted so as to permit termination of contract without the requirement of fault: Jakobs, Horst Heinrich, in: Flume, W et al (eds), Festschrift FA Mann (Beck 1977), 35 ffGoogle Scholar; Beinert, D, Wesentliche Vertragsverletzung und Rücktritt (Gieseking 1979)Google Scholar. In the absence of fault, the courts had treated significant delay as tantamount to impossibility, which permitted cancellation of the contract under § 323 BGB1900: see Reichsgericht, , Entscheidungen des Reichsgerichts in Zivilsachen (RGZ) Vol 42, 114, 115Google Scholar; Vol 89, 203, at 206 f.; Vol 90, 102, at 104 f; Vol 94, 45, at 47; Vol 107, 156, at 157; Bundesgerichtshof, Lindenmaier/Moehring (LM) BGB § 275 Nr 7.

45 See Ernst n 21 above, § 325 No. 8 ff; but see also § 326 I BGB, a provision which does not fit well into the new concept of remedies for breach of contract: Ernst, ibidem, § 326 No 13 ff.

46 Doubts about this in Huber and Faust, n 41 above, ch 3, No 189 ff.

47 Above 1.

48 See Canaris JZ 2001, 499 ff.

49 On this issue the 1900 BGB has been most persistently misunderstood: Jakobs, n 7 above, Wahl n 7 above, 100 ff Huber, n 9 above, 251 ff; Wieling, , Melanges F Sturm II (Liege 1999), s 1135 ffGoogle Scholar; J Harke, 2001 Jahrbuch Junger Zivilrechtswissenschaftler (JbJZivRWiss) 29–59, at 30–45; Chr Knütel, 2001 Juristische Rundschau (JR) 353 ff; Wilhelm and Deeg, JZ 2001, 223, 225.

50 Eidenmüller, 2001 Juristische Arbeitsblaetter (JurA) 824, 832.

51 For further details of the requirements of § 275 I–III BGB see Ernst n 21 above, § 275 No 71.

52 § 326 BGB regulates the (automatic) ending of the contract both for impossibility without fault (hitherto § 323 BGB1900) and with fault (previously § 325 BGB1900). Unfortuntately, § 326 BGB seems to prevent the creditor of the now impossible performance from offering and rendering his counter-performance. This seems an unbalanced solution for cases where the impossibility can be attributed to the debtor’s fault and the creditor has an interest in rendering his counter-performance in exchange for damages. See Ernst n 21 above, § 326 No 13 ff.

53 Huber and Faust, n 41 above, ch 1, No 5 ff.

54 Ernst n 21 above, § 311a No 4 with references.

55 Altmeppen, 2001 Der Betrieb (DB) 1399, 1400 ff; and Ernst n 21, § 311a No 15.

56 See Ernst n 21, § 275 No 19–24.

57 See Micklitz, H W, 25 Journal of Consumer Policy 2002, 379–401 CrossRefGoogle Scholar.

58 German doctrine speaks of a ‘Gestaltungsrecht’, a unilateral ‘right to alter a legal relationship’.

59 Given the fundamental permissibility of partial withdrawal (see Ernst n 21, § 323 No 5, § 323 No 197, 199) one could have avoided having a specific provision on reduction.

60 § 434 BGB and §§ 435, 436 BGB respectively.

61 Sale: §§ 434–445; hire: §§ 536–536d; contract for services: §§ 633–639; contract for travel: §§ 651c–651g BGB.

62 For such modifications see § 281 I s 3; § 323 V s 2; § 346 III s 1 No 1 BGB

63 Ernst n 21, No 213–216.

64 Musielak, , NJW 2003, 89 Google Scholar; Schulze, NJW 2003, 1022.

65 Eg, the grace period necessary for rescission and damages in lieu of performance is modified by §§ 440, 636 BGB.

66 § 195 BGB.

67 For contracts for services see § 635 BGB.

68 Additionally, the seller can refuse repair or replacement if these seem ‘disproportionately costly’, § 439 III BGB.

69 Above B 1.

70 In the case of an irremediable deficiency affecting the object of sale from the beginning (not a rare case), § 311a II BGB replaces § 283 BGB.

71 See the cross-reference to §§ 326, 283 and 311a BGB in §§ 437 and 634a BGB.

72 See Ernst n 22 § 280 No 46–78; Huber, U, in: Festschrift für Peter Schlechtriem zum 70. Geburtstag (Mohr Siebeck 2003) 521 Google Scholar; idem, in Festschrift für Peter Ulmer (De Gruyter 2003) 1165.

73 See Huber n 8 above, 455.

74 See Ernst n 21 above § 323 No 46 ff.

75 On this see Dauner-Lieb, n 41 above, § 280 No 43 with n 116; also Ernst and Zimmermann, n 2 above, 305, 312.

76 For details see Ernst n 21 above, § 275 No 13, § 280 No 65–70; similarily Bamberger/Roth/Faust, Kommentar zum Buergerlichen Gesetzbuch (Beck 2003) Vol 1, § 437 No 61.

77 See eg Franzen, M, Privatrechtsangleichung durch die Europäische Gemeinschaft (De Gruyter 1999)CrossRefGoogle Scholar; Gebauer, M, Grundfragen der Europäisierung des Privatrechts (Winter 1998)Google Scholar; W H Roth, in Grundmann et al, n 6, 113 ff at 128 f; idem, in Geiβ, n 9, Vol 2, 847 ff; Grundmann 2002 Juristische Schulung (JuS) 768; Schnorbus, (2001) 201 Archiv fuer die Civilistische Praxis 860 ff.

78 Art 234 EC.

79 On the issue of implementation see Habersack and Mayer, 1999 Juristenzeitung (JZ) 913 ff.

80 ECJ 1997 ECR I–4190, 4201 f (Leur-Bloem v Inspecteur der Belastingdienst); 4295, 4304 (Giloy v Hauptzollamt Frankfurt aM Ost).

81 On the issue of the optional character of an eventual European Civil Code, see Eidenmüller, , ‘Obligatorisches versus optionales europäisches Vertragsgesetzbuch’, in Ott, C and Schäfer, W (eds) Vereinheitlichung und Diversität des Zivilrechts in transnationalen Wirtschaftsräumen, Beiträge zum VIII. Travemünder Symposium zur ökonomischen Analyse des Rechts (Mohr 2002), 237–243 Google Scholar.

82 Lando, O and Beale, H (eds), Principles of European Contract Law Parts I & II (Kluwer 2000)Google Scholar. The Study Group on a European Civil Code under Christian von Bar wants to integrate the PECL in their planned Draft European Civil Code: see von Bar, in Gottwald, P (ed), Festschrift Dieter Henrich (Gieseking 2000), 1–11 Google Scholar, 4.

83 See Basedow, J (ed), Europäische Vertragsvereinheitlichung und deutsches Recht (Mohr Siebeck) 2000 Google Scholar.

84 See the contributions of Canaris, Hager, Ernst, Köhler, Medicus und Schlechtriem in Basedow, n 83 above.

85 See Gandolfi, G, Code Européen des Contrats I, (Giuffrè 2001)Google Scholar, a model codel developed by Academy of European Private Lawyers (Pavia-group).

86 The principles mentioned are the focus of ongoing international academic discussion. A bibliography of German literature up to 1 January 2001 is found in Ernst and Zimmermann, n 2 above, 739–742.

87 COM (2001) 398 of 11 July 2001; cfWagner, G, 39 Common Market Law Review 2002, 995–1023 CrossRefGoogle Scholar.