business Archives - Page 2 of 74

Advice Before the Insurance Policy

Before a German insurance contract is signed, the insurer must ask and advise. Section 6 of the Insurance Contract Act says that the insurer must question the customer nach seinen Wünschen und Bedürfnissen, about his wishes and needs. It must advise him. It must also state die Gründe für jeden zu einer bestimmten Versicherung erteilten Rat, the reasons for each piece of advice about a particular insurance. How much advice is needed depends on how hard the product is to judge and on the customer and his situation. The effort should also be in reasonable proportion to the premium.

The duty continues during the contract when the insurer can see a reason to ask. A customer can give up the advice only in a separate written declaration. The insurer must warn him that this can weaken a later claim for damages. An insurer that breaks the duty must pay for the damage, unless it is not at fault.

The Bond Ruling

In March 1989 a married couple sat down with an adviser at their Volksbank. They had been customers for more than 20 years. Their savings of about 55,000 marks were in safe products such as fixed deposits and federal savings bonds. A bonus savings contract of 20,000 marks had just matured. The adviser showed them a list from the bank’s own program. On 16 March 1989 they bought 20,000 marks’ worth of bonds of Bond-Finance Ltd., a company of the Australian Alan Bond group. A rating agency had already downgraded the bond to B. It became practically worthless.

On 6 July 1993 the Federal Court of Justice ruled for the couple (XI ZR 12/93). No one had signed an advice contract. The court found that one existed anyway. The bank had accepted it stillschweigend durch die Aufnahme des Beratungsgesprächs, tacitly, by starting the advice meeting. The advice had to be anlegergerecht, suited to the investor, and the product had to suit him as well. German lawyers call the case the Bondurteil, the Bond ruling.

The ID.3 Without Its Software

Volkswagen began delivering its electric ID.3 in September 2020. The first cars went to buyers in the ID.3 1st Mover Club. Some digital functions were not ready. App Connect, the link to Apple CarPlay and Android Auto, was not active. Nor was the far range of the head-up display. According to Der Spiegel, the module for updates over the mobile network was also missing. VW promised a software update for the two missing functions early the next year. The update would require at least one visit to a workshop. For this reason, VW waived the first three lease payments for these buyers.

When the Date Is Essential

If a German supplier delivers late, the customer usually cannot withdraw from the contract at once. He must first set a reasonable further period. Section 323 of the Civil Code makes an exception. No further period is needed if the contract fixed a date or a deadline, and the customer told the supplier before signing that delivery on time was essential to him. The same applies if the circumstances of the deal made the date essential. Lateness alone does not end a German contract. The parties must have made clear in advance that the date itself matters.

No Right to Deliver in Parts

Section 266 of the German Civil Code has one sentence. Der Schuldner ist zu Teilleistungen nicht berechtigt. The debtor is not entitled to perform in parts. Unless the parties have agreed otherwise, the creditor may refuse a partial delivery and wait for the whole. The starting point of German contract law is that what was agreed is delivered complete.

Not Before the Agreed Time

Section 271 of the German Civil Code governs the time of performance. If no time has been set, the creditor can demand performance at once. If a time has been set, the second paragraph applies. Ist eine Zeit bestimmt, so ist im Zweifel anzunehmen, dass der Gläubiger die Leistung nicht vor dieser Zeit verlangen, der Schuldner aber sie vorher bewirken kann. If a time has been set, it is to be assumed, in case of doubt, that the creditor may not demand performance before that time, but the debtor may perform earlier. Once the date is agreed, the creditor waits. The debtor may deliver early.

Only When It Is Obvious

Many German construction contracts include the standard terms known as VOB/B. Section 5 sets the deadlines for the work. It gives the client the right to demand more effort from the contractor in one case. Wenn Arbeitskräfte, Geräte, Gerüste, Stoffe oder Bauteile so unzureichend sind, dass die Ausführungsfristen offenbar nicht eingehalten werden können, muss der Auftragnehmer auf Verlangen unverzüglich Abhilfe schaffen. If workers, equipment, scaffolding, materials or components are so insufficient that the deadlines obviously cannot be met, the contractor must remedy this without delay on request. The condition is in the word offenbar, obviously.

No Keylogger Without Suspicion

In April 2015, a German employer told its staff by e-mail that internet traffic would be logged. The next day, it installed software on a web developer’s computer. The software recorded every keystroke and took regular screenshots. The data showed some private use during working hours, and the employer dismissed the developer. On 27 July 2017, the Federal Labor Court ruled the dismissal invalid. The employer could not use the keylogger data in court. The court held that such software is allowed only if there is a durch konkrete Tatsachen begründeter Verdacht einer Straftat oder anderen schwerwiegenden Pflichtverletzung, a suspicion of a crime or another serious breach of duty that rests on concrete facts. Monitoring ins Blaue hinein, into the blue, without such a suspicion, is not allowed.

Every Point, or No Contract

Section 154 of the German Civil Code says: Solange nicht die Parteien sich über alle Punkte eines Vertrags geeinigt haben, über die nach der Erklärung auch nur einer Partei eine Vereinbarung getroffen werden soll, ist im Zweifel der Vertrag nicht geschlossen. As long as the parties have not agreed on every point that even one of them wants settled, the contract is, in case of doubt, not concluded. The next sentence adds that agreement on single points is not binding, even if it has been written down. One side only has to name a point as open. Until that point is settled, there is no contract.

No Sales Calls Without a Yes

In Germany, a company may call a consumer for advertising only if the consumer has agreed in advance. The rule is Section 7 of the Act Against Unfair Competition. The Federal Network Agency explains it on its website. Jeder, der Sie zu Werbezwecken anrufen möchte, muss zuvor Ihre ausdrückliche Einwilligung einholen. Anyone who wants to call you for advertising must first obtain your express consent. The company must record the consent at once and in detail, and it must show the record to the agency on request. Fines can reach 300,000 euros. A consumer does not have to say no to such a call. Without an earlier yes, the call is already unlawful.