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The German law of public authority liability (Staatshaft ung – State liability) is regulated in a rather complicated way. A first distinction has to be drawn between the personal liability of the civil servant and the liability of the respective public authority or the State for its servants. The second and even more important distinction is between lawful and unlawful acts of State servants or public authorities. The State can be liable for both kinds of acts though under different conditions. In general, liability requires an unlawful act, but exceptionally a lawful act may suffice.
Liability for unlawful State acts causing loss is based on different sources. First, there is the personal liability of persons acting as formal civil servants (Beamtenhaft ung). This is regulated by statute (§839 Bürgerliches Gesetzbuch, Civil Code – BGB). The provision applies irrespective of whether these persons acted in the public or private field of State activities (acta iure imperii and acta iure gestionis). Second, there is the liability of the State for acts causing loss in the private field: this is regulated by the general provisions of the BGB on liability for the acts of employees (§§31, 278, 831 BGB). Third, there is the liability of the State for unlawful acts of its servants in the public field: this is regulated by art 34 Grundgesetz (Basic Law, GG). Under this provision, which is of central importance for public authority liability, the personal liability of the servant for acta iure imperii is substituted by the liability of the State; the victim has no claim against the civil servant. However the State may claim redress against the servant if the latter acted with intent or grave negligence. Fourth, where the State has unlawfully impaired property rights of a citizen the courts have developed a right to compensation (Haft ung aus enteignungsgleichem Eingriff – liability for an expropriation-like intervention).
The legal history of a special product liability law in Germany started with the famous Hühnerpest case of 1968. In this case a chicken farmer, the claimant, had mandated a veterinarian to vaccinate his chickens against fowl pest. The veterinarian vaccinated the animals with a serum that the defendant pharmaceutical business had produced and which for unknown reasons contained active viruses. The consequence of the vaccination was an outbreak of fowl pest. Over 4,000 chickens died. The claimant sued the defendant for compensation of his loss. Under traditional contract and tort law the claimant would have lost his case because he had no contract with the defendant and could not prove that the latter's negligence had caused the damage as is necessary under §823 (1) Bürgerliches Gesetzbuch (BGB), the central norm of German tort law. The Federal Supreme Court (Bundesgerichtshof, BGH) decided that in such cases of product liability the burden of proof must be reversed. The victim of a product defect need no longer prove that the manufacturer was at fault; the latter now has to prove that he was not. The central argument was that for the victim it is often difficult and sometimes impossible to prove detailed circumstances of production which exclusively occur in the sphere of the manufacturer who organises and controls these circumstances. The manufacturer is closer to them (näherdaran) and should therefore bear the burden to prove the absence of fault. Because in the Hühnerpest case the defendant could not prove that the product defect was not his fault and could not have happened in his factory, the claimant succeeded.
Since the Hühnerpest case many decisions have confirmed and refined this special burden of proof rule for product liability cases; since then product liability became a specifically regulated part of general tort law which already existed before the enactment of the Product Liability Act of 1989 (which implemented the EU Directive of 1985). This product liability under general tort law still continues to exist side by side with the Product Liability Act.
Germany was the world champion of exports for a few years. The economic transactions leading to that result are all based on contracts which possess an international element. Many if not most of these contracts are drafted in English and use common law terminology. Some typical contract clauses stem specifically from the United States. Even between German merchants, contracts that are completely in English are not unfamiliar. However, international contracts other than sales or distribution contracts are frequently written in English, the modern lingua franca. This is particularly true for international construction contracts which are often based on the FIDIC (Fédération International des Ingénieurs-Conseils) contract form. It is thus not rare that German courts – and particularly arbitration tribunals – have to deal with such contracts. A specific problem that can arise in the construction of these contracts is the possible discrepancy between the common law style of the language of the contract and the applicable contract law that, in these cases, will often be German law. To exaggerate only slightly, there may be a ‘clash of legal cultures’.
This specific kind of tension between the terms of a contract and a different applicable law has been the subject of some debate in Germany in recent years. Nonetheless, the general phenomenon that parties act on a legal basis different from the applicable law has long since been well known in German private international law. It is termed ‘Handeln unter falschem/fremdem Recht’ (acting under wrong/foreign law).
The sale of goods is essential for the daily life of everybody, so it is no wonder, therefore, that this type of contract is at the centre of private law. All the European codifications grant it a prominent place. Even jurisdictions which rely on the doctrine of precedent have codified aspects of sales law by enacting legislation, such as Great Britain in the Sale of Goods Act 1979, or Denmark, Finland, Iceland, Norway and Sweden in their Nordic Uniform Act on the Law Applicable to International Sales of Goods 1964. Moreover, since Roman times, the solutions developed for legal problems of sales have regularly been the forerunner and model for general contract law.
Astonishingly, when the European Community cautiously began to harmonise and ‘Europeanise’ commercially relevant private law, particularly consumer contract law, in the mid-1980s it did not start with sales, but with doorstep contracts. But it took until the early 1990s for the EU to extend its activities to the core of civil law and into the field of sale of goods. Finally, on the eve of the new millennium in 1999, Directive 99/44/EC of the European Parliament and the Council of 25 May 1999 on Certain Aspects of the Sale of Consumer Goods and Associated Guarantees was enacted, and the Member States had to implement the directive by the end of 2001.
GOOD FAITH IN THE CISG AND THE UNIDROIT PRINCIPLES
The CISG mentions the good faith principle in Art. 7(1), which rules on the interpretation of the Convention as a uniform international law text. According to that provision, the CISG is to be interpreted and applied in a way that “the observance of good faith in international trade” is promoted. The CISG, however, does not contain an express provision that the individual contract has to obey the maxim of good faith as well.
In contrast, the UNIDROIT Principles address good faith as a principle directed to the parties of international contracts: “Each party must act in accordance with good faith and fair dealing in international trade” (Art. 1.7(1) Principles). Even more specifically Art. 4.8(2)(c) of the Principles refers to good faith and fair dealing as a determining element when and which omitted contract term has to be implied. On the other hand, the provision on the interpretation of the Principles (Art. 1.6) does not mention the maxim of good faith.
But despite these obvious differences of wording, both texts accord in their essence. For, it is commonly held that under the CISG the good faith principle also applies to the interpretation of the individual contract and to the parties' contractual relationship as such. On the other hand the UNIDROIT Commentary to the Principles acknowledges that the good faith principle “may also be seen as an expression of the underlying purpose of the Principles” and may be used in interpreting the Principles.