Breach of Contract in Germany

When facing a claim of breach of contract, determining whether a breach of a duty has arisen from the contractual obligation is critical. Such a breach of duty is defined in law as where the non-fulfillment of a duty owed has happened.

Breaches of contractual obligations can take the form of primary obligations, ancillary obligations and secondary obligations. Primary obligations refer to the main provision of the contractual relationship. In a purchase contract for example, the seller should provide the desired object, free of any defects, while the purchaser should be able to make a full payment for that object. Such interactions are the primary obligations. The secondary obligations refers to other aspects that may arise in the course of the transaction such as maintenance, acceptance of other clauses, and advice.

Where a contract has broken down, the person responsible for the breach of duty is often obliged to pay damages. However, crucial factors such as the liability level plays an essential role. Often, the claimant must demonstrat that the contract was breached due to intent or negligence, however, in some circumstances stricter rules can apply regarding the liability. In certain circumstances, the actions of another individual can still result in a breach by one of the parties. For example, if an employee of a company breaches a contract, the company or the employee’s manager can be found liable.

At S&E, our lawyers will examine the breach of contract from all angles and determine whether the party involved is liable for it. Should you be accused of breaching a contract, our team will examine the claim and determine the best strategy applicable to your situation.

Even without a clear breach of contract, parties can claim compensation in specific situations as outlined by law. In cases of bodily injury, damage to property and motor accidents, damages can be claimed even if there is no contract between the parties. Generally, these cases involve damage caused to the physical well-being of the claimant, or to their property or possessions.

In such cases, it needs to be demonstrated that there was damage or injury caused by the person’s act or failure to act (omission), the act was unlawful, the person is at fault due to intent or negligence, and the damage can be compensated.

However, cases also examine the actions of the claimant and assess whether they contributed to the damage caused. Should the claimant be found to be completely responsible for what happened, their claim for damages can be reduced to zero. In strict liability cases, the person can be found liable even without fault on their part. The very action they were involved in is deemed to be dangerous, and therefore they are liable.

Our lawyers advise on all these matters and more.

Just because a breach of contract claim is made does not mean it will succeed. Our lawyers provide their defence services against such claims.

For example, it may be the case the claim is time-barred. The claim against the individual may have taken too long to be made, and now has exceeded the limitation period. There is no general rule that applies to all contracts regarding time limits, and it is best to consult with a legal professional regarding such limits for your particular situation. Buyers’ claims relating to defective goods generally apply for two years but other contracts will have other limitation periods.

If you seek to suspend the limitation period, it may be necessary to bring the claim to court.

Another avenue available is to examine whether it was impossible to fulfill the obligations within the contract. Impossibility can be examined from several avenues: objectively or subjectively, legally or factually. The recent crises arising from the coronavirus pandemic have shown how businesses can fall victim to decisions made outside their control. If your contract has a force majeure clause, our lawyers will examine how it applies to the current situation.

In such cases, our lawyers often support clients in negotiations outside the courtroom. If the parties have a solid working relationship, it is usually preferable to resolve the matter in an amicable manner, and examine where changes can be made or what solutions can be found.

It should be noted, that impossibility can leave the defendant free from needing to fulfill their end of the contract. However, it may not free them from needing to pay compensation/damages. Once again, these matters depend on the case itself.

A third avenue to examine is whether there was a valid contract in the first place. Our lawyers will examine the situation and advise our clients on how to proceed in such cases. It may be the case that the contract was created under duress or elements within it were inherently unfair or in breach of public policy.