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B├╝rgerliches Gesetzbuch

FIRST BOOK - GENERAL PART

FIRST SECTION - Persons

[…]

§ 2 Attainment of majority
Majority occurs at completion of the eighteenth year of a person’s life.
[…]

§ 13 Consumers
A consumer is any natural person who concludes a legal transaction for a purpose which can neither be attributed to his business nor to his independent vocational activity.

§ 14 Undertakings
(1) An undertaking is a natural or legal person or a legally competent company (Gesellschaft) of persons who or which, in concluding a legal transaction, acts in exercise of his or its business or independent vocational activity.

(2) A legally competent company of persons is one which is equipped with the capacity to acquire rights and enter into obligations.
[…]

THIRD SECTION - Legal transactions

First Title - Legal competence

§ 104 Lack of legal competence
A person lacks legal competence if he:
1. has not completed the seventh year of his life

2. is in a state of disturbance of mental activity through disease which would exclude free determination of the will, in so far as the state is not by its nature a transitory one.

§ 105 Invalidity of a declaration of will
(1) A declaration of will by a person who lacks legal competence is invalid.

(2) A declaration of will is also invalid if it is given in a condition of unconsciousness or a transitory disturbance of mental activity.
[…]

§ 106 Limited legal competence of minors
A minor who has completed the seventh year of his life is limited in his legal competence in accordance with §§ 107 to 113.

§ 107 Consent of statutory representative
A minor needs the consent of his statutory representative for a declaration of will by which he does not merely obtain a legal advantage.

§ 108 Conclusion of contract without consent
(1) If a minor concludes a contract without the necessary consent of the statutory representative, the effectiveness of the contract depends on ratification of the representative.

(2) If the other party invites the representative to make a declaration about the ratification, the declaration can only take effect as against him; a ratification or refusal of ratification declared to the minor before the invitation becomes ineffective. The ratification can only be declared up until the expiry of two weeks after the receipt of the invitation; if it is not declared, it is deemed to have been refused.

(3) If the minor has acquired unlimited legal competence, his ratification takes the place of the representative’s ratification.

§ 109 Right of revocation for the other party
(1) The other party is entitled to revoke until the contract is ratified. Revocation can also be declared as against the minor.

(2) If the other party knew about the minority, he can only revoke if the minor has claimed that the representative consented when this is untrue; he cannot revoke even in this case if he knew of the absence of consent at the conclusion of the contract.

§ 110 Effecting performance with own means
A contract concluded by a minor without the approval of the statutory representative is deemed to be effective from the start if the minor effects performance in accordance with the contract with means which have been given to him for this purpose or for his free disposition by the representative or, with his approval, by a third party.

§ 111 Unilateral legal transactions
A unilateral legal transaction which a minor undertakes without the necessary consent of the statutory representative is ineffective. If the minor undertakes such a transaction with this consent in favour of another person, the transaction is ineffective if the minor does not produce the consent in written form, and the other person rejects the transaction on this ground without delay. Rejection is excluded if the representative had apprised the other person of the consent.
[…]

Second Title - Declaration of will

§ 116 Secret reservation
A declaration of will is not void just because the declarant secretly makes the reservation of not having intended what was declared. The declaration is void if it is to be given as against another person and he knows of the reservation.

§ 117 Sham transaction
(1) If a declaration of will which is to be given as against another is only given as a sham with that person’s agreement, then it is void.
(2) If another legal transaction is concealed by a sham transaction, the provisions effective for the concealed transaction will be applied.

§ 118 Lack of seriousness
A declaration which is not seriously intended which is given in the expectation that there will be no failure to recognise the absence of seriousness is void.

§ 119 Avoidability for mistake
(1) A person who, when he gave a declaration of will, was mistaken about its content, or did not intend to give a declaration with this content at all, can avoid the declaration if it is to be assumed that he would not have given it if he had known the state of affairs and on a rational assessment of the case.
(2) A mistake about those characteristics of a person or a thing which are regarded as significant in human affairs is deemed to be a mistake about the content of the declaration.

§ 120 Avoidability for incorrect communication
A declaration of will which has been incorrectly communicated by the person or facility used for the communication can be avoided under the same prerequisite as a declaration of will given by mistake according to § 119.

§ 121 Period for avoidance
(1) Avoidance must in the cases of §§ 119 and 120 occur without culpable delay (promptly) after the person entitled to avoid has acquired knowledge of the ground for avoidance. Avoidance as against an absent person counts as occurring punctually if the declaration of avoidance has been dispatched promptly.
(2) Avoidance is excluded if ten years have elapsed since the giving of the declaration of will.

§ 122 Duty of person avoiding to compensate for harm
(1) If a declaration of will is void under § 118 or avoided on the basis of §§ 119 or 120, the declarant must, if the declaration had to be given as against another, compensate this other person, or otherwise any third party, for the harm which the other person or the third party suffers as a result of trusting in the validity of the declaration, but not however beyond the amount of the interest which the other person or the third party has in the validity of the declaration.
(2) The duty to compensate for harm does not arise if the party suffering harm knew of the ground of invalidity or avoidability or did not know of it as a result of negligence (ought to have known it).

§ 123 Avoidability because of deception or threat
(1) A person who has been caused to make a declaration of will by fraudulent deception or unlawfully by threat can avoid the declaration.
(2) If a third person has practised the deception, a declaration which was to be given as against another is only avoidable if this person knew of the deception or ought to have known of it. In so far as a person other than the one to whom the declaration was to be given has acquired a right directly from the declaration, the declaration is avoidable as against him if he knew of the deception or ought to have known of it.

§ 124 Period for avoidance
(1) Avoidance of declaration of will which is avoidable under § 123 can only take place within a year.
(2) The period begins in the case of fraudulent deception at the point in time at which the person entitled to avoid discovers the deception and in the case of threat at the point in time at which the state of compulsion ceases. The provisions of §§ 206, 210 and 211 applying to limitation of actions apply correspondingly to the running of the period.
(3) Avoidance is excluded if ten years have elapsed since the giving of the declaration of will.

§ 125 Invalidity because of absence of form
A legal transaction which lacks the form prescribed by statute law is void. The absence of form provided for by a legal transaction likewise results in invalidity in case of doubt.

§ 126 Written form
(1) If written form is prescribed by statute law, the document must be signed by the author with his own hand by the signature of his name or by means of a notarially attested mark.
(2 In the case of a contract, the signature of the parties must be made on the same document. If several documents in identical terms are drawn up in respect of the contract, it suffices if each party signs the document intended for the other party.
(3) Written form can be replaced by electronic form unless a different conclusion follows from statute law
(4) Notarial authentication can take the place of written form.
[…]

§ 126b Text form
If text form is prescribed by statute law, the declaration must be given in a document or in another manner appropriate for permanent reproduction in written characters, the declarant must be named and conclusion of the declaration must be made recognisable by reproduction of the signature or otherwise.

§ 127 Agreed form
(1) The provisions of § 126, § 126a or § 126b also apply in case of doubt for form provided for by a legal transaction.
(2) Transmission by telecommunication and exchange of letters in the case of a contract suffice for the observance of written form provided for by a legal transaction, in so far as a different intention is not to be assumed. If such a form is chosen, an authentication corresponding with § 126 can be demanded afterwards.
(3) […]

§ 128 Notarial authentication
If notarial authentication of a contract is prescribed by statute law, it is sufficient if first the offer and then the acceptance of the offer is authenticated by a notary.
[…]

§ 130 Declaration of will becoming effective as against absent persons
(1) A declaration of will which is to be given as against another person is, when it is given in that person’s absence, effective at the point in time at which it reaches him. It is not effective if a revocation reaches the other person previously or at the same time.
(2) It has no influence on the effectiveness of the declaration of will if the declarant dies or becomes legally incompetent after it is given.
(3) These provisions also apply if the declaration of will is to be given as against an authority.
[…]

§ 133 Interpretation of a declaration of will
In the interpretation of a declaration of will the real intention is be ascertained and the literal sense of the statement is not to be followed.

§ 134 Statutory prohibition
A legal transaction which violates a statutory prohibition is void unless a different consequence is to be deduced from the statute.
[…]

§ 138 Immoral legal transaction; extortion
(1) A legal transaction which violates good morals is void.
(2) In particular a legal transaction is void by which someone through exploitation of the predicament, inexperience, lack of judgement or significant weakness of will of another person causes to be promised or granted to himself or a third party in return for a performance economic advantages which are conspicuously disproportionate to the performance.

§ 139 Partial invalidity
If part of a legal transaction is void, the whole transaction is void unless it can be assumed that it would have been undertaken even without the void part.

§ 140 Conversion
If a void legal transaction corresponds to the requirements of another legal transaction, the latter is valid if can be assumed that its validity would have been desired on knowledge of such invalidity.
[…]

§ 142 Effect of avoidance
(1) If an avoidable legal transaction is avoided, it is to be regarded as void from the start.
(2) A person who knew of the avoidability or ought to have known of it will, when the avoidance occurs, be treated as if he had known of the invalidity of the transaction or ought to have known of it.

§ 143 Declaration of avoidance
(1) Avoidance occurs by declaration as against the opposing party.
(2) The opposing party is, in the case of a contract, the other party, and in the case of § 123 paragraph 2 sentence 2 the person who has acquired a right directly from the contract.
(3) In the case of a unilateral legal transaction which was to be undertaken as against another person, the other person is the opposing party. The same applies to a legal transaction which was to be undertaken as against another person or against an authority, even if the transaction has been undertaken as against the authority.
(4) In the case of a unilateral legal transaction of a different kind, the opposing party is everyone who has obtained a legal advantage directly on the basis of the transaction. If the declaration of will was to be given as against an authority, the avoidance can however take place by way of a declaration as against the authority; the authority must communicate the avoidance to the person who has been directly affected by the transaction.

§ 144 Confirmation of the avoidable legal transaction
(1) Avoidance is excluded if the avoidable legal transaction is confirmed by the person entitled to make the avoidance.
(2) The confirmation does not need the form determined for the legal transaction.

Third Title - Contract

§ 145 Binding effect of offer
A person who offers to another that he will conclude a contract is bound by the offer, unless he has excluded this binding effect.

§ 146 Extinguishment of offer
An offer lapses if it is refused as against the offeror, or if it is not accepted in time as against him under §§ 147 to 149.

§ 147 Time for acceptance
(1) An offer made to a person who is present can only be accepted immediately. This also applies to an offer made by telephone or other technical apparatus from person to person.
(2) An offer made to an absent person can only be accepted up to the point in time at which the offeror may expect arrival of the answer in usual circumstances.

§ 148 Determination of a period for acceptance
If the offeror has determined a period for the acceptance of the offer, acceptance can only occur within that period.

§ 149 Declaration of acceptance arriving belatedly
If a declaration of acceptance reaching the offeror belatedly has been sent in such a way that it would have reached him in time on regular dispatch, and if the offeror ought to have recognised this, he must notify the delay to the acceptor promptly after receipt of the declaration in so far as this has not already occurred. If he delays in sending the notification, the acceptance does not count as delayed.

§ 150 Delayed and conditional acceptance
(1) Delayed acceptance of an offer counts as a new offer.
(2) An acceptance with extensions, limitations or other amendments counts as a refusal combined with a new offer.

§ 151 Acceptance without a declaration as against the offeror
A contract will come into existence by acceptance of an offer without acceptance needing to be declared to the offeror if such a declaration is not to be expected in accordance with custom (Verkehrssitte), or if the offeror has renounced his right to it. The point in time at which the offer lapses is determined by the intention of the offeror which is to be deduced from the offer or the circumstances.

§ 152 Acceptance by notarial authentication
If a contract is notarially authenticated without both parties being present simultaneously, the contract comes into existence by authentication of the acceptance occurring in accordance with § 128, if no other provision is made. The provisions of § 151 sentence 2 apply.

§ 153 Death or legal incompetence of offeror
The formation of the contract is not prevented by the offeror dying or becoming legally incompetent before acceptance, unless a different intention on the part of the offeror must be assumed.

§ 154 Patent lack of agreement; absence of authentication
(1) As long as the parties have not agreed on all points of the contract about which an agreement is to be made according to the declaration of even only one party, the contract is not concluded in case of doubt. An understanding about individual points is not binding even if a record has been made.
(2) If authentication of the intended contract has been arranged, in case of doubt the contract is not concluded until the authentication has occurred.

§ 155 Hidden lack of agreement
If the parties have, in relation to an agreement which they regard as concluded, not in reality agreed about a point as to which agreement should be made, what has been agreed is valid in so far as it is to be assumed that the contract would have been concluded even without a provision about this point.
[…]

§ 157 Interpretation of contracts
Contracts are to be interpreted as required by good faith and having regard to custom (Verkehrssitte).

Fifth Title - Agency and Power of Attorney

§ 164 Effect of agent’s declaration
(1) A declaration of will which someone, within the agent’s authority which he has, gives in the principal’s name takes effect directly for and against the principal. It makes no difference whether the declaration is made expressly in the name of the principal or whether the circumstances indicate that it is made in his name.
(2) If the intention to act in the name of another is not evident, the absence of an intention to act in one’s own name should not be considered.
(3) The provisions of paragraph 1 apply correspondingly if a declaration of will to be given as against another is made to that person’s agent.

§ 165 Agent with limited legal competence
The effectiveness of a declaration of will given by or to an agent is not impaired by the fact that the agent has limited legal competence.

§ 166 Absence of intention; attribution of knowledge
(1) In so far as the legal consequences of a declaration of will are influenced by absence of intention or by the fact that certain circumstances are known or ought to be known, it is the situation of the agent and not of the principal which should be considered.
(2) If in the case of an agent’s authority (a power of attorney) given by a legal transaction the agent has acted in accordance with certain directions of the donor of the power, the latter cannot in respect of those circumstances which he knew himself rely on the agent’s lack of knowledge. The same applies in respect of circumstances which the donor of the power ought to have known in so far as the fact that he ought to have known can be equated with knowledge.

§ 167 Creation of power of attorney
(1) A power of attorney is created by way of a declaration to the person to be authorised or to the third party against whom the agency is to take place.
(2) The declaration does not need to be in the form which is determined for the legal transaction to which the power of attorney relates.

§ 168 Extinguishment of power of attorney
The extinguishment of the power of attorney is determined in accordance with the legal relationship on which its creation is based. The power of attorney is revocable even if the legal relationship continues to exist, in so far as no different consequence is to be deduced from this relationship. The provisions of § 167 paragraph 1 apply correspondingly to the revocation declaration.

§ 169 Power of attorney of delegate and executive member of company (Gesellschaft)
In so far as the extinguished power of attorney of a delegate or an executive member is deemed still to be existing under §§ 674, 729, it does not operate in favour of a third party who knows or ought to know of the extinguishment when undertaking a legal transaction.

§ 170 Period of effect of power of attorney
If the power of attorney is created by a declaration as against a third party, it will remain in effect as against this person until the extinguishment is notified to him by the donor of the power attorney.

§ 171 Period of effect in case of announcement
(1) If someone has announced by special communication to a third party or by public advertisement that he has authorised another person, this person has the authority of agency on the basis of the announcement in the former case as against the third party and in the latter case as against every third party.
(2) The agent’s authority continues to exist until the announcement is revoked in the same manner as it was made.

§ 172 Power of attorney
(1) It is equivalent to special communication of an authorisation by the donor of a power of attorney when the latter has handed over a power of attorney to the agent and the agent produces this to a third party.
(2) The agent’s authority continues in existence until the power of attorney is given back to the donor or is declared to be ineffectual.

§ 173 Period of effect in case of knowledge or negligent lack of knowledge
The provisions of § 170, § 171 paragraph 2 and § 172 paragraph 2 do not apply if the third party knows of the extinguishment of the agent’s authority when the legal transaction is undertaken or if he ought to know of it.

§ 174 Unilateral legal transaction by attorney
A unilateral legal transaction which an attorney undertakes as against another is ineffective if the attorney does not produce a power of attorney, and the other person rejects the legal transaction on this ground without delay. Rejection is excluded if the donor of the power of attorney had apprised the other party of the power of attorney.

§ 175 Return of power of attorney
After the extinguishment of the power of attorney, the attorney must give back the power of attorney to the donor; he does not have a right of retention.
[…].

§ 177 Conclusion of contract by agent without agent’s authority
(1) If someone concludes a contract in the name of another person without any agent’s authority, the effectiveness of the contract for and against the principal depends on the latter’s ratification.
(2) If the other party invites the principal to make a declaration about ratification, the declaration can only take place as against him; a ratification or refusal of ratification declared as against the agent before the invitation is ineffective. The ratification can only be declared up until the expiry of two weeks after receipt of the invitation; if it is not declared, it is deemed to have been refused.

§ 178 Right of revocation by other party
Until ratification of the contract the other party is entitled to revoke, unless he knew of the lack of agent’s authority on conclusion of the contract. Revocation can also be declared as against the agent.

§ 179 Liability of agent without agent’s authority
(1) A person who has concluded a contract as an agent is, in so far as he does not prove his agent’s authority, obliged to the other party to effect fulfilment or compensate (according to that party’s election), if the principal refuses to ratify the contract.
(2) If the agent did not know of the lack of agent’s authority, he is only obliged to compensate for that harm which the other party suffers as a result of relying on the agent’s authority, but not beyond the amount of the interest which the other party has in the effectiveness of the contract.
(3) The agent is not liable if the other party knew of the absence of agent’s authority or ought to have known of it. The agent is also not liable if he had limited legal competence, unless he acted with the consent of his statutory representative.

§ 180 Unilateral legal transaction
In the case of a unilateral legal transaction, agency without agent’s authority is not permissible. If however the person as against whom such a transaction was to be undertaken has not objected to the agent’s authority asserted by the agent when the transaction was undertaken, or if he was in agreement with the agent acting without agent’s authority, the provisions about contracts apply correspondingly. The same applies if a unilateral legal transaction is undertaken as against an agent without agent’s authority with that person’s agreement.

§ 181 Transactions with oneself
An agent cannot, except in so far as he is permitted to do otherwise, undertake a legal transaction in the name of the principal with himself in his own name or as agent of a third party, unless the transaction is exclusively in fulfilment of a commitment.

Sixth Title - Consent and ratification

§ 182 Approval
(1) If the effectiveness of a contract or of a unilateral legal transaction which is to be undertaken as against another is dependent on the approval of a third party, the giving and the refusal of the approval can be declared as against the one as well as against the other party.
(2) Approval does not need the form determined for the legal transaction.
(3) If a unilateral legal transaction the effectiveness of which depends on the approval of a third party is undertaken with the consent of the third party, the provisions of § 111 sentences 2, 3 apply correspondingly.
[…]

§ 184 Retrospective effect of ratification
(1) Subsequent approval (ratification) takes effect retrospectively at the point in time when the legal transaction was undertaken, in so far as no other provision is made.
(2) Retrospective effect does not render dispositions prior to ratification ineffective if they have been made in respect of the subject matter of the legal transaction by the ratifier or have occurred by way of execution or seizure or by the insolvency administrator.

FIFTH SECTION - Limitation

First Title - Subject matter and length of limitation period

§ 194 Subject matter of limitation
(1) The right to demand that another person shall do or refrain from doing something (a claim) is subject to limitation.
(2) Claims from a family law relationship are not subject to limitation in so far as they are aimed at the restoration for the future of the situation corresponding to the relationship.

§ 195 Standard limitation period
The standard limitation period is three years.

§ 196 Limitation period in respect of rights in land
Claims to transfer of property in land as well as to the creation, transfer or termination of a right in land or to the alteration of the content of such a right as well as claims to counterperformance are subject to a limitation period of ten years.

§ 197 Three year limitation period
The following are subject to a 30-year limitation period in so far as no other provision is made:

  1. Claims to delivery arising from property and other rights in rem,
  2. Family and inheritance claims,
  3. Claims established in a legally binding way,
  4. Claims arising from directly enforceable settlements or directly enforceable documents, and
  5. Claims which have become enforceable by a finding which has been made in insolvency proceedings.

(2) In so far as claims under paragraph 1 no 2 have regularly recurring services or support services as their content and claims under paragraph 1 nos 3 to 5 have regularly recurring services becoming due in the future as their content, the standard limitation period takes the place of the limitation period of 30 years.

§ 198 Limitation in case of succession
If a thing in relation to which a claim in rem exists enters the possession of a third party by succession, the successor has the benefit of the limitation period which elapsed during the possession of the legal predecessor.

§ 199 Commencement of standard limitation period and maximum periods
(1) The standard limitation period commences with the end of the year in which

  1. the claim arises, and
  2. the creditor acquires knowledge of the circumstances forming the basis of the claim and the identity of the debtor, or would have done so had he not been grossly negligent.

(2) Claims to compensation which are based on violation of life, body, health, or freedom have a limitation period (without regard to when they arose and knowledge, or absence of knowledge due to gross negligence) of 30 years from the commission of the act, the violation of duty or the other event giving rise to the harm.

(3) Other claims to compensation

  1. without regard to knowledge, or absence of knowledge due to gross negligence, have a limitation period of ten years from when they arise, and
  2. without regard to when they arise and knowledge, or absence of knowledge due gross negligence, have a limitation period of 30 years from the commission of the act, the violation of duty or the other event giving rise to the harm,
    whichever period ends soonest.

(4) Claims other than claims to compensation have a limitation period of ten years from the date they arise without regard to knowledge, or absence of knowledge due to gross negligence.

(5) If the claim relates to an omission, the contravention takes the place of the claim arising.

§ 200 Commencement of other limitation periods
The limitation period for claims which are not subject to the standard limitation period begins with the date when the claim arises in so far as no other date for commencement of the limitation period is determined. § 199 paragraph 5 applies correspondingly.

§ 201 Commencement of limitation period for established claims
The limitation period for claims of the kind described in § 197 paragraph 1 nos 3 to 5 begins with the date the decision becomes legally effective, the establishment of the directly enforceable title or the finding in the insolvency proceedings, but not before the date when the claim arose. § 199 paragraph 5 applies correspondingly.

§ 202 Impermissibility of agreements about limitation
(1) Limitation periods cannot be reduced in advance by a legal transaction in the case of liability based on intention.

(2) Limitation periods cannot be increased by a legal transaction beyond a period of 30 years from the statutory commencement of the limitation period.

Second Title - Suspension, expiry of suspension and recommencement of limitation period

§ 203 Suspension of limitation period in case of negotiations
If negotiations about the claim or the circumstances forming the basis of the claim are proceeding between the debtor and the creditor, the limitation period is suspended until one or other of the parties refuses to continue with the negotiations. Expiry of the limitation period occurs no sooner than three months after the end of the suspension.

§ 204 Suspension of limitation period by pursuit of right
(1) A limitation period is suspended by

  1. the commencement of an action for performance or for declaration of existence of a claim, for granting of an execution clause or for issue of an execution judgment,
  2. the submission of an application in the simplified proceedings about the maintenance of minors,
  3. the submission of a warning decision in warning proceedings,
  4. the instigation of notification of a conciliation petition which is delivered at a conciliation office set up or recognised by the Land justice administration or, if the parties make an attempt to reach an agreement conjointly at another conciliation office which manages conflict settlements, if the notification is instigated following the delivery of the application, the suspension of the limitation period occurs with the delivery,
  5. the assertion of set off to the claim in the proceedings,
  6. the submission of an announcement of the dispute,
  7. the submission of an application for the carrying out of independent evidence proceedings,
  8. the commencement of agreed expert opinion proceedings or the commissioning of an expert in the proceedings in accordance with § 641a,
  9. the submission of an application for the issue of a detention warrant, of an interim order or an interim injunction or, if the application is not submitted, its delivery, if the order for the detention, the interim order or the interim injunction is submitted to the debtor within a month of announcement or submission to the creditor,
  10. the notification of the claim in insolvency proceedings or in shipping law allocation proceedings,
  11. the beginning of arbitration proceedings,
  12. the delivery of an application to an authority if the permissibility of the action is dependent on a prior decision of this authority and the action is brought within three months after the making of the request; this applies correspondingly for applications to be made to a court or to a conciliation office described in no 4, the permissibility of which depends on the prior decision of an authority,
  13. the delivery of an application to the higher court, if this court has to determine the competent court and the action is brought, or the application for which the determination of the place of jurisdiction has to occur, is made within three months after the making of the request, and
  14. the instigation of notification of the first application for granting of assistance for the cost of proceedings; if the notification is instigated following the submission of the application, the suspension of the limitation period occurs with the submission.

(2) The suspension under paragraph 1 ends six months after the legally binding decision or other termination of the proceedings initiated. If the proceedings come to a halt as a result of the parties not pursuing them, then the last step in the proceedings by the parties, by the court, or by the other office concerned with the proceedings is substituted for the termination of the proceedings. The suspension begins again when one of the parties pursues the proceedings further.

(3) §§ 206, 210 and 211 have corresponding application to the period under paragraph 1 nos 9, 12 and 13.

§ 205 Suspension of limitation period in case of right to refuse performance
The limitation period is suspended as long as the debtor is entitled temporarily to refuse performance on the basis of an agreement with the creditor.

§ 206 Suspension of limitation period in case of supervening force (force majeure)
The limitation period is suspended as long as the creditor within the last six months of the limitation period, is prevented from pursuing his rights by supervening force (force majeure).

§ 207 Suspension of limitation period on family and similar grounds
(1) The limitation period in respect of claims between married couples is suspended as long as the marriage exists. The same applies for claims between

  1. life partners as long as the life partnership exists,
  2. parents and children and the spouse of a parent and that person’s children during the minority of the children,
  3. the guardian and the ward during the period of the guardianship,
  4. the person supervised and the supervisor during the length of the supervision relationship, and
  5. the charge and the carer during the length of the care relationship.

The limitation period for claims of a child against the advisor is suspended during the length of the advisor relationship.

(2) § 208 remains unaffected.

§ 208 Suspension of limitation period in relation to claims for violation of sexual self-determination
The limitation period in respect of claims for violation of sexual self-determination is suspended until the creditor attains the age of 21 years. If the creditor in respect of claims for violation of sexual self-determination lives with the debtor in the same household at the beginning of the limitation period, the limitation period is also suspended until the termination of these household arrangements.

§ 209 Effect of suspension
The period of time during which the limitation period is suspended is not included when calculating the limitation period.

§ 210 Expiry of suspension in case of persons who are not fully legally competent
(1) If a person who is not legally competent, or who is restricted in his legal competence, is without a statutory representative, a limitation period running for or against that person will not start before the expiry of six months after the point in time at which the person becomes fully legally competent or the lack of representation is removed. If the limitation period is shorter than six months, the period determined for limitation purposes takes the place of six months.

(2) Paragraph 1 does not apply in so far as a person with limited legal capacity is competent in relation to legal proceedings.

§ 211 Expiry of suspension in estate cases
The limitation period in respect of a claim which belongs to an estate or is directed against an estate does not start before the expiry of six months after the point in time at which the inheritance is accepted by the heir, or the insolvency proceedings regarding the estate are opened, or from which the claim can be made by or against a representative. If the limitation period is shorter than six months, the period determined for limitation purposes takes the place of six months.

§ 212 Recommencement of limitation period
(1) The limitation period begins again if

  1. the debtor acknowledges the claim to the creditor by an interim payment, an interest payment, the giving of security, or in some other way, or
  2. an execution by a court or by an authority is undertaken or proposed.

(2) The fresh commencement of the limitation period as a result of an execution does not count as having occurred if the execution is annulled on the application of the debtor or because of absence of the statutory prerequisites.

(3) The fresh commencement of the limitation period through application to carry out an act of execution does not count as having occurred if the application is not granted or the application is withdrawn before the execution or the act of execution obtained is annulled in accordance with paragraph 2.

§ 213 Suspension, expiry of suspension and fresh commencement of limitation period in relation to other claims
Suspension, expiry of suspension and fresh commencement of the limitation period also apply for claims arising from the same ground which exist either in addition to the claim or instead of it, as desired.

Third Title - Legal consequences of limitation

§ 214 Effect of limitation
(1) On expiry of the limitation period the debtor is entitled to refuse performance.
(2) Any performance rendered in satisfaction of a time expired claim cannot be demanded back, even if the performance was rendered in ignorance of the fact that it was time expired. The same applies for a contractual acknowledgement as well as for a giving of security by the debtor.

§ 215 Set off and right of retention after expiry of limitation period
The expiry of a limitation period does not exclude set off and the claiming of a right of retention if the limitation period for the claim had not yet expired at the point in time at which there could first be set off or the performance could be refused.

§ 216 Effect of limitation on secured claims
(1) The expiry of the limitation period in respect of a claim for which a mortgage, a ship mortgage, or a right of pledge exists does not prevent the creditor from seeking his satisfaction from the encumbered object.
(2) If a right has been procured for the securing of a claim, retransfer cannot be demanded on the basis of the expiry of the limitation period for the claim. If property is reserved, withdrawal from the contract can occur even if the limitation period in respect of the secured claim has expired.
(3) Paragraphs (1) and (2) do not apply to the expiry of the limitation period in respect of claims to interest and other recurring performances.

§ 217 Limitation in respect of subsidiary performances
The limitation period in respect of the claim to subsidiary performances dependent on the main claim expires with that of the main claim, even if the special limitation period applying to the former claim has not yet expired.

§ 218 Ineffectiveness of withdrawal
(1) Withdrawal because performance was not effected or not effected in accordance with the contract is ineffective if the limitation period in respect of the claim to the performance or the claim to subsequent fulfilment has expired and the debtor refers to this. This also applies if the debtor does not need to perform under § 275 paragraphs 1 to 3, § 439 paragraph 3 or § 635 paragraph 3 and the claim to performance or the claim to subsequent fulfilment would be time barred. § 216 paragraph 2 sentence 2 remains unaffected.
(2) §214 paragraph 2 applies correspondingly.
[…]

SECOND BOOK - LAW OF OBLIGATION RELATIONS

FIRST SECTION - Content of obligation relationships

First Title - Duty to perform

§ 241 Duties arising from obligation relationship
(1) By virtue of the obligation relationship, the creditor is entitled to demand performance from the debtor. Performance can also consist in an omission.
(2) The obligation relationship can, according to its content, oblige each party to have regard to the rights, legal entitlements and interests of the other party.

§ 242 Performance in accordance with good faith
A creditor is obliged to effect performance in the manner required by good faith, having regard to custom (Verkehrsitte).

§ 243 Obligation relating to class
(1) A person who is obliged to provide a thing determined only according to its class must provide a thing of average type and quality.
(2) If a debtor has done what is necessary on his side to provide such a thing, the obligation relationship is limited to this thing.

§ 244 Debt in foreign currency
(1) If a money debt expressed in another currency than the euro is to be paid within the country, the payment can be made in euros, unless it is expressly agreed that payment is to be in the other currency.
(2) The conversion will take place according to the currency value which is determinative at the time of the payment for the place of payment.

§ 246 Statutory rate of interest
If a debt is to bear interest according to statute law or a legal transaction, four per cent per annum is to be paid in so far as no other rate has been determined.

§ 247 Basic rate of interest
(1) The basic rate of interest is 3.62 per cent. It changes on the 1st January and 1st July each year by the percentage points by which the base factor rose or fell since the last change of the basic rate of interest. The base factor is the rate of interest for the most recent major refinancing operation of the European Central Bank before the first calendar day of the half year concerned.
(2) The Deutsche Bundesbank will publish in the Bundesanzeiger the applicable basic rate of interest without delay after the points in time mentioned in paragraph 1 sentence 2.
[…]

§ 249 Type and scope of compensation
(1) A person who is under a duty to provide compensation has to restore the state of affairs which would exist if the circumstance giving rise to the duty to compensate had not arisen.
(2) If compensation for harm is to be provided because of injury to a person or because of damage to a thing, the creditor can instead of restoration demand the sum of money necessary for this. In the case of damage to a thing the sum of money necessary under sentence 1 only includes turnover tax if and in so far as it has actually become payable.

§ 250 Compensation in money after setting of time limit
A creditor can determine for the person obliged to compensate an appropriate period for restoration in kind by a declaration that he will refuse restoration in kind after expiry of this period. After the expiry of the period, the creditor can demand compensation in money if the restoration in kind does not take place in time; the claim to restoration in kind is excluded.

§ 251 Compensation in money without setting of time limit
(1) In so far as restoration in kind is not possible or is not sufficient for indemnifying the creditor, the person obliged to compensate must indemnify the creditor in money.
(2) The person obliged to compensate can indemnify the creditor in money if restoration in kind is possible only with disproportionate expenditure. Expenses which have arisen from medical treatment of an injured animal are not disproportionate simply because they substantially exceed its value.

§ 252 Lost profit
The harm for which compensation is to be made also includes lost profit. Profit is deemed to be lost if it could be expected with probability in the usual course of things or the special circumstances, in particular the arrangements and provisions which have been made.

§ 253 Non-material harm
(1) In the case of harm which is not financial harm, compensation in money can only be demanded in the cases determined by statute.
(2) If compensation is to be provided because of injury to the body, health, freedom or sexual self-determination, fair compensation in money can also be demanded for harm which is not financial harm.

§ 254 Contributory fault
(1) If fault on the part of the victim has contributed to the origin of the harm, the duty to compensate as well as the extent of the compensation to be provided depends on the circumstances, and in particular on the extent to which the harm has been predominantly caused by the one or the other party.
(2) This also applies if the victim’s fault is limited to the fact that he has omitted to draw the debtor’s attention to the risk of an unusually high level of harm of which the debtor neither knew nor ought to have known, or that he has omitted to avert the harm or to reduce it. The provisions of § 278 apply correspondingly.

§ 255 Transfer of claims to compensation
A person who has to provide compensation for the loss of a thing or a right is obliged to compensate only in return for transfer of the claims which belong to the person entitled to compensation on the basis of property in the thing or on the basis of the right against third parties.
[…]

§ 266 Partial performances
The debtor is not entitled to make partial performances.

§ 267 Performance by third parties
(1) If the debtor does not have to perform in person, a third party can also effect performance. The consent of the debtor is not necessary.
(2) The creditor can refuse performance if the debtor objects.

§ 268 Right of discharge by third party
(1) If the creditor carries out an execution against an object belonging to the debtor, everyone who runs the risk of losing a right in the object through the execution is entitled to satisfy the creditor. The same right belongs to the person in possession of a thing if he runs the risk of losing possession through the execution.
(2) Satisfaction can also occur by deposit or by setting off.
(3) In so far as the third party satisfies the creditor, the demand transfers to him. The transfer cannot be claimed to the creditor’s disadvantage.

§ 269 Place of performance
(1) If a place for performance is neither determined nor can it be deduced from the circumstances, in particular from the nature of the obligation relationship, performance must occur in the place in which the debtor had his residence at the time the obligation relationship arose.
(2) If the obligation arose in the carrying out of the debtor’s business and if the debtor had his business establishment in another place, the place of establishment is substituted for the place of residence.
(3) It should not be deduced from the mere fact that the debtor has agreed to pay the costs of dispatch that the place to which the dispatch must be made should be the place of performance.

§ 270 Place of payment
(1) In case of doubt the debtor should transmit money at his own risk and cost to the creditor at his residence.
(2) If the demand arose in the carrying out of the creditor’s business and if the creditor has his business establishment in another place, the place of establishment is substituted for the place of residence.
(3) If, as a result of a change in the creditor’s residence or business establishment after the obligation relationship arose, the costs or the risk of transmission increase, the creditor must bear the additional costs in the former case and the risk in the latter case.
(4) The provisions about the place of performance remain unaffected.

§ 271 Time for performance
(1) If a time for performance is neither determined nor can it be deduced from the circumstances, the creditor can demand performance immediately and the debtor can effect it immediately.
(2) If a time is determined, it is to be assumed in case of doubt that the creditor cannot demand performance before this time, but the debtor can effect it earlier.
[…]

§ 273 Right of retention
(1) If the debtor has a claim which has fallen due against the creditor from the same legal relationship on which his obligation is based, he can, in so far as no different conclusion is to be drawn from the obligation relationship, refuse the performance owed until the performance which is due to him has been effected (right of retention).
(2) A person who is obliged to hand over an object has the same right if he is entitled to a claim which has fallen due for expenditure on the object or because of harm caused to him by it, unless he has obtained the object by a tort committed deliberately.
(3) The creditor can prevent the exercise of the right of retention by a providing a security. Security by a guarantee is excluded.

§ 274 Effects of the right of retention
(1) The claiming of a right of retention only has, as against the creditor’s claim, the effect that the debtor must be ordered to perform in return for the performance which is due to him (simultaneous fulfilment).
(2) On the basis of such an order the creditor can pursue his claim by way of execution without effecting the performance which he owes if the debtor is in delay in acceptance.

§ 275 Exclusion of duty to perform
(1) The claim to performance is excluded in so far as this is impossible for the debtor or for anyone.
(2) The debtor can refuse performance in so far as this requires expenditure which is in gross disproportion to the creditor’s interest in performance, having regard to the content of the obligation relationship and the requirement of good faith. When determining the efforts to be expected of the debtor, consideration must also be given to whether the debtor is responsible for the hindrance to performance.
(3) The debtor can further refuse performance if he has to effect performance personally, and on balancing the hindrance to his performance, together with the creditor’s interest in performance, the debtor cannot be expected to do this.
(4) The creditor’s rights are determined in accordance with §§ 280, 283 to 285, 311a and 326.

§ 276 Responsibility of debtor
(1) The debtor is responsible for intention and negligence if no stricter or more lenient liability is either determined or to be deduced from the other content of the obligation relationship, in particular from the adoption of a guarantee or a risk of production. The provisions of §§ 827 and 828 apply correspondingly.
(2) A person acts negligently if he does not have regard to the care necessary in the ordinary affairs of life.
(3) The debtor cannot be released in advance from liability for intention.
§ 277 Care in own affairs
A person who only has to take responsibility for that care which he is accustomed to apply in his own affairs is not freed from liability for gross negligence.

§ 278 Responsibility of debtor for third parties
The debtor has to answer for fault on the part of his statutory representative and of the persons whom he uses for the fulfilment of his obligations to the same extent as for his own fault. The provisions of § 276 paragraph 3 do not apply.
[…]

§ 280 Compensation for violation of duty
(1) If the debtor violates a duty arising from an obligation relationship, the creditor can demand compensation for the harm arising from this. This does not apply if the debtor is not responsible for the violation of duty.
(2) The creditor can only demand compensation for delay in performance under the additional prerequisite of § 286.
(3) The creditor can only demand compensation instead of performance under the additional prerequisites of § 281, § 282 or § 283.

§ 281 Compensation instead of performance, because of non-performance or performance not in accordance with obligation
(1) In so far as the debtor does not effect the performance which is due or does not effect it in accordance with the obligation, the creditor can, under the prerequisites of § 280 paragraph 1, demand compensation instead of performance if he has set a reasonable period for the debtor for the performance or subsequent fulfilment, but without result. If the debtor has effected a partial performance, the creditor can only demand compensation instead of the whole performance if he has no interest in the partial performance. If the debtor has not effected performance in accordance with the obligation, the creditor cannot demand compensation instead of the whole performance if the violation of duty is not substantial.
(2) The setting of a period can be dispensed with if the debtor refuses performance seriously and finally, or if special circumstances are present which, on balancing the interests of both sides, justify the immediate making of a claim to compensation.
(3) If, because of the kind of violation of duty, the setting of a period does not come into consideration, then a warning will take its place.
(4) The claim to performance is excluded as soon as the creditor has demanded compensation instead of performance.
(5) If the creditor demands compensation instead of the whole performance, the debtor is entitled to demand back what has been performed in accordance with §§ 346 to 348.

§ 282 Compensation instead of performance because of violation of duty under § 241 paragraph 2
If the debtor violates a duty under § 241 paragraph 2, the creditor can demand compensation instead of performance under the prerequisites of § 280 paragraph 1 if performance by the debtor can no longer be expected of the creditor.

§ 283 Compensation instead of performance on exclusion of duty to perform
If the debtor does not need to perform according to § 275 paragraphs 1 to 3, the creditor can demand compensation instead of performance under the prerequisites of § 280 paragraph 1. § 281 paragraph 1 sentences 2 and 3 and paragraph 5 apply correspondingly.

§ 284 Reimbursement of abortive expenditure
In the place of compensation instead of performance the creditor can demand reimbursement of expenditure which he has made in reliance on receiving the performance and could fairly make, unless its purpose would not have been attained even without the debtor’s violation of duty.

§ 285 Handing reimbursement over
(1) If the debtor obtains replacement or a claim to replacement for the object which is the subject of the obligation as a result of the circumstance on the basis of which he does not need to effect performance according to § 275 paragraphs 1 to 3, the creditor can demand the handing over of what has been received as replacement or the transfer of the claim to replacement.
(2) If the creditor can demand compensation instead of performance, this will reduce by the value of the replacement obtained or the claim to replacement if he makes use of the right provided for in paragraph 1.

§ 286 Delay by debtor
(1) If the debtor does not perform in response to the creditor’s warning which takes place after performance has become due, then he will be in delay as a result of the warning. The raising of a claim to performance as well as the submission of a warning order in warning proceedings are equivalent to a warning.
(2) A warning is not needed if

  1. a time is determined for the performance according to the calendar,
  2. an event must precede the performance and an appropriate time is determined for the performance in such a way that it can be reckoned from the event onwards according to the calendar,
  3. the debtor refuses performance seriously and finally,
  4. the immediate commencement of delay is justified on special grounds on balancing the interests of both sides.

(3) The debtor in respect of a demand for payment will be in delay at the latest if he does not perform within 30 days after the due date and an account or an equivalent payment statement is received; this only applies as against a debtor who is a consumer if his attention has been particularly drawn to these results in the account or payment statement. If the point in time of the arrival of the account or payment statement is uncertain, the debtor who is not a consumer is in delay at the latest 30 days after the due date and receipt of the counterperformance.
(4) The debtor is not in delay as long as performance does not occur as a result of a circumstance for which he is not responsible.

§ 287 Responsibility during delay
The debtor is responsible for all negligence during the delay. He is liable with regard to the performance even for chance events unless the harm would also have occurred on punctual performance.

§ 288 Interest during delay
(1) A money obligation bears interest during the delay. The rate of interest during delay for the year is five percentage points above the basic rate of interest.
(2) For legal transactions in which no consumer participates, the rate of interest for demands for payment is eight percentage points above the basic rate of interest.
(3) The creditor can demand higher interest on a different legal ground.
(4) A claim for further loss is not excluded."
10. In § 291 sentence 2 the reference to "§ 288 paragraph 1" is to be replaced by a reference to "§ 288 paragraph 1 sentence 2, paragraph 2, paragraph 3.
[…]

Second Title - Delay by creditor

§ 293 Delay in acceptance
The creditor falls into delay when he does not accept the performance offered to him.

§ 294 Actual offer
The performance must be actually offered to the creditor as it is to be effected.

§ 295 Verbal offer
A verbal offer by the debtor suffices if the creditor has declared to him that he will not accept the performance or if action by the creditor is necessary for the effecting of the performance, in particular if the creditor has to collect the thing owed. An invitation to the creditor to undertake the necessary action is equivalent to an offer of performance.

§ 296 Dispensability of offer
If a time is determined in accordance with the calendar for the action to be undertaken by the creditor, an offer is only needed if the creditor carries out the action punctually. The same applies if an event has to precede the action and a reasonable time for the action is determined in such a way that it can be reckoned from the event onwards according to the calendar.

§ 297 Inability on part of debtor
The creditor does not fall into delay if the debtor is not in a position to effect performance at the time of the offer or, in the case of § 296, at the time determined for the action by the creditor.
[…]

§ 300 Effects of delay by creditor
(1) The debtor only has to answer for intention and gross negligence during delay by the creditor.
(2) If a thing is owed which is only determined by its class, the risk transfers to the creditor at the point in time at which he falls into delay by not accepting the thing offered.
[…]

§ 304 Reimbursement of additional expenditure
The debtor can in the case of delay by the creditor demand the reimbursement of the additional expenditure which he had to incur for the unsuccessful offer as well as for the preservation and maintenance of the object owed.

SECOND SECTION - Formulation of obligation relationships in legal transactions by general conditions of business

§ 305 Incorporation of general conditions of business into contract
(1) General conditions of business are all contractual conditions formulated beforehand for many contracts which one contracting party (the user) places before the other at the conclusion of a contract. It does not matter whether the provisions form an outwardly separated component of the contract or are taken into the contractual document itself, what their scope is, in what kind of written form they are composed and what form the contract takes. General conditions of business are not present in so far as the conditions of contract are negotiated individually between the contracting parties.
(2) General conditions of business will only be a component of a contract if the user on conclusion of the contract

  1. refers the other contracting party expressly to them or, if an express reference is only possible with disproportionate difficulties because of the way in which the contract is concluded, by a clearly visible notice at the place of conclusion of the contract, and
  2. provides the other contracting party with the opportunity of becoming acquainted with their content in a reasonable manner which also takes appropriate account of any physical disability of the other contracting party which the user can recognise
    and if the other contracting party is in agreement with their applicability.

(3) The contracting parties can agree the applicability of certain general conditions of business in advance for a certain kind of legal transaction, provided they observe the requirements described in paragraph 2.

§ 305a Incorporation in special cases
Even without observance of the requirements described in § 305 paragraph 2 nos 1 and 2, there will be included, if the other contracting party is in agreement with their applicability:

  1. the tariffs and implementation provisions of the railways issued with the approval of the competent transport authority or on the basis of international treaties and the transportation conditions of trams, buses and motor vehicles providing regular services approved in accordance with the Transportation of Persons Act in the transportation contract,
  2. the general conditions of business published in the official journal of the regulatory authority for telecommunications and post and kept available in the places of business of the user
    a) in transportation contracts which are concluded outside business premises by the insertion of postal packets in letterboxes,
    b) in contracts about telecommunication, information and other services which are effected directly by employment of methods of communication from a distance and during the effecting of a telecommunication service are effected at once if the general conditions of business can only be made accessible to the other contracting party before the conclusion of the contract with disproportionate difficulty.

§ 305b Priority of individual arrangement
Individual contractual arrangements have priority over general conditions of business.

§ 305c Surprising and ambiguous clauses
(1) Provisions in general conditions of business which in the circumstances, in particular the outward appearance of the contract, are so unusual that the contractual partner of the user does not need to take them into account are not part of the contract.
(2) Doubt about the interpretation of general conditions of business will be resolved to the disadvantage of the user.

§ 306 Legal consequences of non-incorporation and ineffectiveness
(1) If general conditions of business have wholly or partially not become part of the contract or are ineffective, the contract remains effective in other respects.
(2) In so far as the provisions have not become part of the contract or are ineffective, the content of the contract will be determined in accordance with the statutory provisions.
(3) The contract is ineffective if adhering to it, even taking into account the alteration provided for in paragraph 2, would represent an unreasonable hardship for a contracting party.

§306a Prohibition of circumvention
The provisions of this section apply even if they are circumvented by other formulations.

§ 307 Control of content
(1) Provisions in general conditions of business are ineffective if they unreasonably disadvantage the user’s contracting partner in a manner contrary to the requirements of good faith. An unreasonable disadvantage can also arise from the fact that the provision is not clear and comprehensible.
(2) An unreasonable disadvantage is to be assumed in case of doubt if a provision

  1. cannot be reconciled with essential basic concepts of the statutory regime from which there is a deviation, or
  2. so limits essential rights or duties which arise from the nature of the contract that the attainment of the purpose of the contract is endangered.

(3) Paragraphs 1 and 2 as well as §§ 308 and 309 only apply for provisions in general conditions of business by which rules are agreed deviating from legal provisions or supplementing them. Other provisions can be ineffective under paragraph 1 sentence 2 in combination with paragraph 1 sentence 1.
§ 308 Prohibition on clauses with possibility of discretion
In general conditions of business, the following in particular are ineffective

  1. (Periods for acceptance and performance)
    a provision by which the user reserves unreasonably long or insufficiently determinate periods for the acceptance or refusal of an offer or the effecting of performance; reservation of performance only after expiry of the period for revocation or return under § 355 paragraphs 1 and 2 and § 356 is excepted from this;
  2. (Additional period)
    a provision by which the user, deviating from the legal provisions, reserves an unreasonably long or insufficiently determinate additional period for the performance to be effected by him;
  3. (Reservation of the right of withdrawal)
    agreement of a right by the user to release himself from his duty to perform without a ground which is objectively justified and given in the contract; this does not apply for long term obligation relationships;
  4. (Reservation of the right of alteration)
    agreement of a right by the user to alter the promised performance or to deviate from it, if the agreement of the alteration or deviation, taking into consideration the interests of the user, cannot be expected of the other contracting party;
  5. (Fictitious declarations)
    a provision according to which a declaration by the contractual partner of the user is, on the undertaking or omission of a certain act, to count as given or not given by him, unless
    a) the contractual partner is allowed an appropriate period for giving an express declaration and
    b) the user commits himself especially to draw the attention of the contractual partner at the beginning of the period to the significance of his conduct as provided for;
    this does not apply to contracts in which Part B of the Order regarding public works contracts (Verdingungsordnung) for building services has been included as a whole;
  6. (Fictitious arrival)
    a provision which provides that a declaration by the user of particular importance is to count as having reached the other contracting party;
  7. (Winding up of contracts)
    a provision under which the user can demand, for the case in which a contracting party withdraws from the contract or terminates the contract by notice,
    a) an unreasonably high recompense for the exploitation or use of a thing or a right or for services effected or
    b) an unreasonably high reimbursement of expenses;
  8. (Non-availability of the performance)
    an agreement permissible under no 3 of a reservation by the user to release himself from the duty to fulfil the contract in the case of non-availability of the performance, if the user does not commit himself,
    a) to inform the contractual partner without delay about the non-availability and
    b) to restore counterperformances of the contractual partner without delay.

§ 309 Prohibition of clauses without possibility of discretion
Even in so far as a deviation from the statutory provisions is permissible, the following are ineffective in general conditions of business:

  1. (Price increases on short notice)
    a provision which provides for increase of the payment for goods or services which are to be delivered or carried out within four months after the conclusion of the contract; this does not apply for goods or services which are delivered or carried out within the framework of long term obligation relationships;
  2. (Rights to refuse performance)
    a provision by which
    a) the right to refuse performance which belongs to the contractual partner of the user under § 320 is excluded or limited, or
    b) a right of retention belonging to the contractual partner of the user, in so far as it is based on the same contractual relationship, is excluded or limited, and in particular is made dependent on the recognition of defects by the user;
  3. (Prohibition of set off)
    a provision which takes away the power from the contractual partner of the user to set off an undisputed demand or one established in a legally binding way;
  4. (Warning, setting of a period)
    a provision by which the user is released from the statutory obligation to warn the other contracting party or to set him a period for performance or subsequent fulfilment;
  5. (Lump sum for claims to compensation)
    the agreement of an all-inclusive claim by the user to compensation or to recompense for a diminution in value, if
    a) the lump sum exceeds the harm to be expected in the cases regulated according to the usual course of events or the diminution in value usually arising, or
    b) the other contracting party is not allowed expressly to prove that harm or a diminution in value did not occur at all or is substantially lower than the lump sum;
  6. (Contractual penalty)
    a provision by which the user is promised payment of a contractual penalty for the case of non-acceptance or delayed acceptance of the performance, of delay in payment or for the case where the other contracting party releases himself from the contract;
  7. (Exclusion of liability on violation of life, body or health and in the case of gross fault)
    a) (Violation of life, body or health)
    an exclusion or a limitation of liability for harm from violation of life, body or health which is based on a negligent violation of the user’s duty or an intentional or negligent violation of the duty of a statutory representative or agent of the user;
    b) (Gross fault)
    an exclusion or limitation of liability for other harm which is based on a grossly negligent violation of duty by the user or on an intentional or grossly negligent violation of duty of a statutory representative or agent of the user;
    a and b do not apply for limitations of liability in the conditions of transport and tariff provisions of trams, buses and powered vehicles on regular services authorised in accordance with the Transportation of Persons Act, in so far as they do not deviate from the Regulation on general conditions of transportation for tram and bus traffic and regular services with powered vehicles of the 27th February 1970 to the disadvantage of the passenger; b does not apply for limitations of liability for state authorised lottery or raffle contracts;
  8. (Other exclusions of liability on violation of duty)
    a) (Exclusion of the right to be released from the contract)
    a provision which excludes or limits the right of the other contracting party to be released from the contract in the case of a violation of duty for which the user is responsible and which does not consist in a defect in the object purchased or in the work; this does not apply for the transportation conditions and tariff provisions described in no 7 under the prerequisites mentioned there;
    b) (Defects)
    a provision by which in relation to contracts about deliveries of newly manufactured things and about work services
    aa) (Exclusion and reference to third parties)
    claims against the user because of a defect are excluded altogether or with reference to individual parts, limited to the granting of claims against third parties or are made dependent on prior court claims against third parties;
    bb) (Limitation to subsequent fulfilment)
    claims against the user are limited altogether, or with reference to individual parts, to a right to subsequent fulfilment in so far as the right is not expressly reserved to the other contracting party on failure of subsequent fulfilment to reduce or, if the defects liability does not relate to building services, at his option to withdraw from the agreement;
    cc) (Expenses on subsequent fulfilment)
    the duty of the user is excluded or limited to bearing the expenses, in particular costs of transportation, road tolls, work and materials, necessary for the purpose of subsequent fulfilment;
    dd) (Withholding of subsequent fulfilment)
    the user makes subsequent fulfilment dependent on the prior payment of the full sum due or of a part of the sum due which is disproportionately high, taking the defect into consideration;
    ee) (Exclusive period for notification of defects)
    the user sets the other party an exclusive period, which is shorter than the period permissible under ff, for the notification of defects which are not obvious;
    ff) (Reduction of the limitation period)
    the limitation period for claims against the user in respect of a defect in the cases of § 438 paragraph 1 no 2 and § 634a paragraph 1 no 2 is reduced or, in the other cases, there is a limitation period consisting of less than a year from the statutory commencement of limitation; this does not apply for contracts in which Part B of the Order regarding public works contracts (Verdingungsordnung) for building services is included as a whole;
  9. (Effective period of long term obligation relationships)
    in respect of a contractual relationship which has as its subject matter the regular delivery of goods or the regular effecting of services or work by the user,
    a) an effective period for the contract binding the other contracting party for longer than two years,
    b) a tacit lengthening by, in each case, more than a year of the contractual relationship binding the other contractual party, or
    c) a longer period of notice than three months before the expiry of the contractual duration provided for initially or extended tacitly and which is to the disadvantage of the other contracting party;
    this does not apply to contracts for the delivery of things sold as related to each other, for insurance contracts and for contracts between the proprietors of copyright rights and claims and exploitation companies in the sense of the Act on the exercise of copyright rights and related protective rights;
  10. (Change of contracting partner)
    a provision according to which in purchase, service or work contracts a third party steps, or can step, into the rights and duties arising from the contract in place of the user, unless
    (a) the third party is described by name in the provision, or
    (b) the provision grants to the other contracting party the right to release himself from the contract;
  11. (Liability of the agent concluding the contract)
    a provision by which the user imposes on an agent who concludes the contract for the other contracting party
    a) a personal liability or duty to indemnify without an express and separate declaration directed at this, or
    b) in the case of an agency without authority, a liability going beyond § 179;
  12. (Burden of proof)
    a provision by which the user alters the burden of proof to the disadvantage of the other contracting party, in particular by
    a) imposing on this person the burden of proof for circumstances which lie within the area of responsibility of the user, or
    b) causing the other contracting party to confirm certain facts;
    b does not apply for acknowledgements of receipt which are signed separately or are provided with a separate qualified electronic signature;
  13. (Form of notifications and declarations)
    a provision by which notifications or declarations which are to be given to the user or a third party are to be in a stricter form than written form or impose special requirements as to receipt.

§ 310 Area of application
(1) § 305 paragraphs 2 and 3 and §§ 308 and 309 do not apply to general conditions of business which are used as against an undertaking, a legal person under public law or a special fund under public law. § 307 paragraphs 1 and 2 also apply in cases within sentence 1 in so far as this leads to the ineffectiveness of the contractual provisions mentioned in §§ 308 and 309; appropriate account is to be taken of the customs and usages applying in trade.
(2) §§ 308 and 309 do not apply to contracts by electricity, gas, district heating and water supply undertakings for the supply of special consumers with electrical energy, gas, district heating and water from the supply network in so far as the conditions of supply do not deviate to the disadvantage of the buyer from the Regulations about general conditions for the supply of tariff customers with electrical energy, gas, district heating and water. Sentence 1 applies correspondingly for contracts about the disposal of sewage.
(3) In relation to contracts between an undertaking and a consumer (consumer contracts) the provisions of this section apply with the following provisos:

  1. general conditions of business count as being inserted by the undertaking, unless they were introduced by the consumer into the contract;
  2. § 305c paragraph 2 and §§ 306 and 307 to 309 of this Code as well as Article 29a of the Introductory Act to the Civil Code also apply to preformulated contractual conditions when these are only intended for use on one occasion and in so far as the consumer could not have any influence on their content because of the preformulation;
  3. in assessing the unreasonable disadvantage under § 307 paragraphs 1 and 2, the circumstances accompanying the conclusion of the contract must also be considered.

(4) This section does not apply to contracts in the area of inheritance, family and company law or to tariff contracts or business or service agreements. In its application to labour contracts, the special features applying in labour law are to be considered as appropriate; § 305 paragraphs 2 and 3 are not applicable. Tariff contracts and business and service agreements are equivalent to legal provisions in the sense of § 307 paragraph 3.

THIRD SECTION- Obligation relationships arising from contracts

First Title - Formation, content and termination

First Sub-title - Formation

§ 311 Obligation relationships arising from legal transactions and similar obligation relationships
(1) A contract between the participants is necessary for the formation of an obligation relationship by a legal transaction as well as the alteration of the content of an obligation relationship, in so far as statute does not prescribe otherwise.
(2) An obligation relationship with duties under § 241 paragraph 2 also arises from

  1. the opening of contractual negotiations
  2. the initiation of a contract, in which initiation one party, having regard to a possible relationship in the nature of a legal transaction, grants to the other party the possibility of exerting an effect on his rights, legal entitlements and interests, or entrusts these to him, or
  3. similar business contacts.

(3) An obligation relationship with duties under § 241 paragraph 2 can also arise in favour of persons who are not themselves to be contracting parties. Such an obligation relationship arises in particular when the third party claims reliance for himself to a special extent and thereby substantially influences the contractual negotiations or the conclusion of the contract.

§ 311a Hindrance to performance on conclusion of contract
(1) It is not inconsistent with the effectiveness of a contract that the debtor does not need to perform under § 275 paragraphs 1 to 3 and the hindrance to performance is already present on conclusion of the contract.
(2) The creditor can demand compensation instead of performance or reimbursement of his expenses to the extent determined in § 284, according to his choice. This does not apply if the debtor did not know of the hindrance to performance on conclusion of the contract and is also not answerable for his lack of knowledge. § 281 paragraph 1 sentences 2 and 3 and paragraph 5 apply correspondingly.

§ 311b Contracts about land, property and estates
(1) A contract by which one party commits himself to transfer or acquire the property in a piece of land needs notarial authentication. A contract concluded without regard to this formality is valid in its entire content if it is followed by transfer and entry in the Land Register.
(2) A contract by which one party commits himself to transfer his future property or a fraction of his future property or to encumber it with a usufruct is void.
(3) A contract by which one party commits himself to transfer his present property or a fraction of his present property or to encumber it with a usufruct needs notarial authentication.
(4) A contract about the estate of a third party who is still alive is void. The same applies to a contract about the part of an estate which must go to the closest relation or a legacy from the estate of a third party who is still alive.
(5) Paragraph 4 does not apply to a contract which is concluded between future statutory heirs about the statutory inheritance or the part of the estate of one of them which must go to the closest relation. Such a contract needs notarial authentication.

§ 311c Extension to accessories
If someone commits himself to transfer or encumber a thing, this duty extends in case of doubt to the accessories of the thing.

Second Sub-title - Special forms of business

§ 312 Right of revocation in doorstep transactions
(1) In a contract between an undertaking and a consumer which has as its subject matter a performance in return for money and which the consumer has been induced to conclude
1. by oral negotiations at his workplace or in the area of a private dwelling,
2. on the occasion of a leisure time event carried out by the undertaking or by a third party at least also in the undertaking’s interests or
3. following on a surprise approach on a vehicle or in a publicly accessible area
(door step transaction), the consumer has a right of revocation in accordance with § 355. The consumer can be allowed a right of return in accordance with § 356 in place of the right of revocation, if in connection with this or a later transaction a continuous association is to be maintained between the consumer and the undertaking.
(2) The necessary information about the right of revocation or return must refer to the legal consequences of § 357 paragraphs 1 and 3.
(3) Without prejudice to other provisions, the right of revocation or return does not exist for insurance contracts, or if

  1. in the case of paragraph 1 no 1 the oral negotiations on which the conclusion of the contract is based have been conducted on the previous order of the consumer, or
  2. the performance is effected and paid immediately on conclusion of the negotiations and the payment does not exceed 40 euros, or
  3. the consumer’s declaration of will has been authenticated by a notary.

§ 312a Relationship to other provisions
If a door step transaction at the same time comes within the rules about consumer credit contracts or financial assistance (§§ 491 to 504) or about time share residence rights contracts (§§ 481 to 487) or if a door step transaction at the same time fulfils the prerequisites of a transaction under § 11 or § 15h of the Act concerning the sale of foreign investment shares and the taxation of the yield from foreign investment shares, under § 23 of the Act concerning capital investment companies or under § 4 of the Act for the protection of the participants in distance learning, then only the provisions about these transactions will apply.

§312b Distance sale contracts
(1) Distance sale contracts are contracts about the delivery of goods or about the effecting of services, including financial services, which are concluded between an undertaking and a consumer by the exclusive use of distance communication methods, unless the conclusion of the contract does not take place within the framework of a sales or services system organised for the distance sale. Financial services in the sense of sentence 1 are bank services and services in connection with a grant of credit, insurance, pensions for individuals, investment and payment.
(2) Distance communication methods are methods of communication which can be employed for the initiation or the conclusion of a contract between a consumer and an undertaking without the simultaneous physical presence of the contracting parties, in particular letters, catalogues, telephone calls, faxes and Emails as well as radio, tele and media services.
(3) The provisions about distance sale contracts do not apply to contracts

  1. about distance learning (§ 1 of the Distance Learning Protection Act),
  2. about time share use of residential buildings (§ 481),
  3. about insurances, as well as their negotiation,
  4. about the transfer of land and rights in the nature of land, the formation, transfer and termination of rights in rem in respect of land and rights in the nature of land as well as about the construction of buildings,
  5. about the delivery of food, drinks or other household objects of daily need, which are delivered at the residence of a consumer, or the place where he stays or works, by undertakings within the framework of frequent and regular journeys,
  6. about the effecting of services in the areas of accommodation, transport, delivery of food and drinks as well as use of leisure time when the undertaking commits itself on conclusion of the contract to carrying out the services at a determined point in time or within a period of time which is exactly stated,
  7. which are concluded
    a) by use of automatic vending machines or automised business premises or
    b) with the operators of telecommunication services on the basis of the use of public telephones in so far as they have the use of such telephones as their subject.

(4) In the case of contractual relationships which include an initial agreement with transactions connected to it following on one another or a sequence of separate transactions of the same kind connected to it, and in a temporal relationship, the provisions about distance sale contracts only apply to the first agreement. If transactions of this kind follow one another without such an agreement, the provisions about the undertaking’s duties to provide information only apply to the first transaction. If however no transaction of the same kind takes place for longer than a year, the next transaction is deemed to be the first transaction in a new sequence in the sense of sentence 2.
(5) More extensive provisions for the protection of the consumer remain unaffected.

§ 312c Advice to consumer in case of distance sale contracts
(1) The undertaking must make information (which is provided for in the Regulation under article 240 of the Introductory Statute to the Civil Code) available to the consumer clearly and comprehensibly in time before he gives his contractual declaration, in a manner corresponding to the distance communication method employed, and giving the business purpose. The undertaking must, in telephone conversations instigated by it, disclose its identity and the business purpose of the contact expressly at the beginning of each conversation.
(2) The undertaking must further communicate to the consumer the contractual provisions, including the general conditions of business, and the information provided for in the Regulation under article 240 of the Introductory Statute to the Civil Code in the scope and manner determined there in text form, and

  1. in the case of financial services punctually before the giving of his contractual declaration, or, if at the wish of the consumer the contract is concluded by telephone (or by use of some other method of distance communication which does not allow the communication in text form before the conclusion of the contract) without delay after the conclusion of the distance sale contract;
  2. in the case of other services and in the case of the delivery of goods, immediately, and at the latest by the complete fulfilment of the contract, and in the case of goods at the latest by delivery to the consumer.

A communication under sentence 1 no 2 can be dispensed with in the case of services which are furnished directly by employment of methods of distance communication, in so far as these services occur instantaneously and are deducted through the supplier of the method of distance communication. The consumer must however in this case be able to inform himself of the address of the undertaking’s establishment at which he can make objections.
(3) In the case of financial services the consumer can demand from the undertaking at any time during the period of the contract that it makes available to him in a document the contractual provisions including the general conditions of business.
(4) Further limitations on the use of distance communication methods and further duties to supply information on the basis of other provisions remain unaffected.

§ 312d Right of revocation and return in relation to distance sale contracts
(1) The consumer has a right of revocation under § 355 in respect of a distance sale contract. The consumer can be granted a right of return under § 356 instead of a right of revocation in the case of contracts about the delivery of goods.
(2) The period for revocation does not, contrary to § 355 paragraph 2 sentence 1, begin before the fulfilment of the duties to give information under § 312c paragraph 2, nor in the case of the delivery of goods before the day of their arrival with the recipient, nor in the case of recurring delivery of goods of the same kind before the day of arrival of the first partial delivery, nor in the case of services before the day of conclusion of the contract; § 355 paragraph 2 sentence 2 does not apply.
(3) The right of revocation in respect of a service lapses in the following cases also:

  1. in the case of a financial service, if the contract has been completely fulfilled by both sides at the express wish of the consumer before the consumer has exercised his right of revocation,
  2. in the case of another service, if the undertaking has begun to carry out the service before the end of the period for revocation with the express consent of the consumer, or the consumer has brought this about himself.

(4) The right of revocation does not exist, in so far as no different provision has been made, in relation to distance sale contracts

  1. for the delivery of goods which are prepared according to a customer specification or are clearly tailored to personal needs or which are not appropriate for return on the basis of their composition or which can perish quickly or the expiry date of which would be exceeded,
  2. for the delivery of audio or video recordings or of software in so far as the data carriers delivered have been unsealed by the consumer,
  3. for the delivery of newspapers, journals and magazines,
  4. for the carrying out of betting and lottery services,
  5. which are concluded in the form of auctions (§ 156), or
  6. which have as their object the delivery of goods or the provision of financial services, the price of which is subject on the financial market to fluctuations over which the undertaking has no influence, and which can occur within the period for revocation, in particular services in connection with shares, share certificates which are issued by a capital investment company or a foreign investment company, and other negotiable securities, foreign currency, derivatives or instruments on the money market.

(5) The right of revocation also does not exist in the case of distance sale contracts in which the consumer already has a right of revocation or return under §§ 355 or 356 on the basis of §§ 495, 499 to 507. In the case of such contracts paragraph 2 applies correspondingly.
(6) In the case of distance sale contracts about financial services, the consumer, deviating from § 357 paragraph 1, only has to provide reimbursement for the value of the service provided under the provisions about statutory withdrawal, if he has been referred to this legal consequence before giving his contractual declaration and if he has expressly agreed that the undertaking should begin to carry out the service before the end of the period for revocation.

§ 312e Duties in electronic business
(1) If an undertaking uses a tele or media service for the purpose of the conclusion of a contract about the delivery of goods or about the carrying out of services (contract in electronic business), it must

  1. make available for the customer appropriate, effective and accessible technical methods with the assistance of which the customer can recognise and correct mistakes in submission before the giving of his order,
  2. communicate to the customer clearly and comprehensibly the information provided for in the Regulation under Article 241 of the Introductory Act to the Civil Code in time before the giving of his order,
  3. confirm to the customer the arrival of his order without delay by electronic means, and
  4. provide to the customer the possibility on conclusion of the contract of calling up the contractual provisions, including the general conditions of business, and storing them in a form capable of being reproduced.

The order and confirmation of receipt in the sense of sentence 1 no 3 count as having arrived when the parties for whom they are intended can call them up in usual circumstances.
(2) Paragraph 1 sentence 1 nos 1 to 3 do not apply if the contract is concluded exclusively by individual communication. Paragraph 1 sentence 1 nos 1 to 3 and sentence 2 do not apply if something different is agreed between contracting parties who are not consumers.
(3) More extensive duties to give information on the basis of other provisions remain unaffected. If the customer has a right of revocation under § 355, the revocation period does not begin, contrary to § 355 paragraph 2 sentence 1, before the fulfilment of the duties regulated in paragraph 1 sentence 1.

§ 312f Divergent agreements
No deviation may be made from the provisions of this subtitle to the disadvantage of the consumer or the customer in so far as no different provision is made. The provisions of this subtitle apply even if they are circumvented by different formulations, in so far as no different provision is made.

Third Sub-title - Adaptation and termination of contracts

§ 313 Disturbance of foundation of transaction
(1) If the circumstances which have become the foundation of the contract have seriously altered after the conclusion of the contract and if the parties would not have concluded the contract, or would have concluded it with a different content if they had foreseen this alteration, then adaptation of the contract can be demanded in so far as adherence to the unaltered contract cannot be expected of one party taking into consideration all the circumstances of the individual case and in particular the contractual or statutory division of risk.
(2) It is equivalent to an alteration of the circumstances if essential preconceptions which have become the foundation of the contract turn out to be wrong.
(3) If an adaptation of the contract is not possible or cannot be expected of a party, the disadvantaged party can withdraw from the contract. For long term obligation relationships, the right to terminate by notice takes the place of the right of withdrawal.

§ 314 Termination of long term obligation relationships by notice on important ground
(1) Long-term obligation relationships can be terminated by any contracting party on an important ground without observing a period of notice. An important ground is present if, taking into consideration all the circumstances of the individual case and balancing the interests of both sides, the continuation of the contractual relationship until the agreed termination or until the expiry of a notice period cannot be expected of the party giving notice.
(2) If the important ground consists of the violation of a duty under the contract, termination by notice is only permissible after the expiry without result of a period determined for the taking of remedial action or after a warning without result. § 323 paragraph 2 applies correspondingly.
(3) The person so entitled can only terminate by notice within a reasonable period after he has obtained knowledge of the ground for termination.
(4) The entitlement to demand compensation is not excluded by termination by notice.
[…]

Second title - Mutual contract

§ 320 Objection of unfulfilled contract
(1) A person who is under an obligation in a mutual contract can refuse the performance which is incumbent upon him until the effectuation of the counterperformance, unless he is obliged to effect performance beforehand. If the performance has to occur in favour of several people, refusal can be made to an individual of the part which is due to him until the whole counterperformance has been effectuated. The provisions of § 273 paragraph 3 are not applicable.
(2) If performance has been partially effected by one party, counterperformance cannot be refused in so far as refusal would in the circumstances violate the principles of good faith, in particular because of the relative triviality of the part remaining to be performed.

§ 321 Objection of uncertainty
(1) A person who is obliged to effect performance beforehand under a mutual contract can refuse the performance which is incumbent upon him if it is evident, after conclusion of the contract, that his claim to performance in return is endangered by the lack of ability to perform on the part of the other party. The right to refuse performance lapses when the counterperformance is brought about or security is provided for it.
(2) The person obliged to effect performance beforehand can determine an appropriate period in which the other party must effect counterperformance simultaneously with performance or provide security, according to his choice. After expiry of the period without result, the person obliged to effect performance beforehand can withdraw from the contract. § 323 applies correspondingly.

§ 323 Withdrawal because performance not carried out or not carried out in accordance with the contract
(1) If the debtor in a mutual contract does not effect performance which is due, or does not effect it in accordance with the contract, the creditor can withdraw from the contract, if he has determined for the debtor an appropriate period for performance or subsequent fulfilment but without result.
(2) The setting of a period can be dispensed with, if

  1. the debtor refuses performance seriously and finally,
  2. the debtor does not effect performance on a date determined in the contract or within a determined period and in the contract the creditor has made the continued existence of his interest in performance dependent on the punctuality of the performance or
  3. special circumstances are present which justify immediate withdrawal, on balancing the interests of both parties.

(3) If the setting of a period does not come into consideration because of the type of violation of duty, then a warning will takes its place.
(4) The creditor can withdraw even before performance becomes due, if it is obvious that the prerequisites for withdrawal will occur.
(5) If the debtor has effected partial performance, the creditor can only withdraw from the whole contract if he has no interest in partial performance. If the debtor has not effected performance in accordance with the contract, the creditor cannot withdraw from the contract if the violation of duty is insignificant.
(6) Withdrawal is excluded if the creditor is solely or overwhelmingly responsible for a circumstance that would entitle him to withdraw or if a circumstance for which the debtor is not responsible occurs at a time at which the creditor is in delay in acceptance.

§ 324 Withdrawal because of violation of duty under § 241 paragraph 2
If the debtor in a mutual contract violates a duty under § 241 paragraph 2, the creditor can withdraw if adherence to the contract can no longer be expected him.

§ 325 Compensation and withdrawal
The right to demand compensation in respect of a mutual contract is not excluded by withdrawal.

§ 326 Release from counterperformance and withdrawal in case of exclusion of duty to perform
(1) If the debtor does not need to perform under § 275 paragraphs 1 to 3, the claim to counterperformance lapses; in the case of partial performance § 441 paragraph 3 applies correspondingly. Sentence 1 does not apply if the debtor does not need to effect subsequent fulfilment under § 275 paragraphs 1 to 3 in the case of performance not in accordance with the contract.
(2) If the creditor is solely or overwhelmingly responsible for a circumstance on the basis of which the debtor does not need to perform under § 275 paragraphs 1 to 3 or if this circumstance for which the debtor is not responsible occurs at a time when the creditor is in delay in acceptance, the debtor retains the claim to counterperformance. He must however allow to be reckoned against him what he saves as a result of release from performance or acquires by some other use of his power to work or wilfully refrains from acquiring.
(3) If the creditor demands the handing over under § 285 of the replacement obtained for the object owed or transfer of the claim to replacement, he remains obliged to effect counterperformance. This is however reduced in accordance with § 441 paragraph 3 in so far as the value of the replacement or of the claim to replacement falls short of the value of the performance owed.
(4) In so far as a counterperformance which is not owed under this provision is effected, what is performed can be demanded back under §§ 346 to 348.
(5) If the debtor does not need to perform according to § 275 paragraphs 1 to 3, the creditor can withdraw; on withdrawal § 323 applies correspondingly with the proviso that the setting of a period can be dispensed with.
[§ 327 is repealed.]

Third Title - Promise of performance to third party

§ 328 Contract for benefit of third party
(1) Performance towards a third party can be stipulated for by contract with the effect that the third party acquires the right directly to demand performance.
(2) In the absence of a special provision, it must be deduced from the circumstances, in particular from the purpose of the contract, whether the third party is to acquire the right, whether the third party’s right is to arise immediately or only subject to certain prerequisites, and whether power should be reserved to the persons concluding the contract to cancel or amend the third party’s right without his consent.

§ 329 Rule of interpretation on taking over of fulfilment
If one party commits himself in a contract to satisfy a creditor of the other party without taking over the obligation, in case of doubt it is not to be assumed that the creditor is to acquire the right directly to demand satisfaction from him.

§ 330 Rule of interpretation in case of a life insurance or life annuity contract
If stipulation is made for the payment of the insured sum or the life annuity in a life insurance or life annuity contract to a third party, it is to be assumed in case of doubt that the third party is to acquire the right directly to demand performance. The same applies if in the case of a gratuitous transfer a performance towards a third party is imposed on the beneficiary or in the case of a transfer of assets or property a performance is promised by the transferee to a third party for the purpose of the settlement.

§ 331 Performance after death
(1) If performance towards a third party is to take place after the death of the person to whom it is promised, in case of doubt the third party acquires the right to the performance on the death of the recipient of the promise.
(2) If the recipient of the promise dies before the birth of the third party, the promise to perform towards the third party can only still be cancelled or amended if authority for this has been reserved.

§ 332 Alteration by disposition on death in case of reservation
If the recipient of a promise has reserved to himself the power to put another person in the place of the third party described in the contract without the consent of the promisor, this can take place in case of doubt in a disposition on death as well.

§ 333 Rejection of right by third party
If the third party rejects the right acquired from the contract as against the promisor, the right is deemed not to have been acquired.

§ 334 Objections by debtor against third party
Objections arising from the contract also belong to the promisor as against the third party.

§ 335 Right of demand by recipient of promise
The recipient of the promise can, in so far as no different intention on the part of the persons concluding the contract is to be assumed, also demand performance towards the third party if this person has the right to the performance.

Fifth Title - Withdrawal, and right of revocation and return in respect of consumer contracts

First Sub-title - Withdrawal

§ 346 Effects of withdrawal
(1) If a contracting party has contractually reserved for himself the right of withdrawal or if he is entitled to a statutory right of withdrawal then in the case of withdrawal the performances received are to be retransferred and the benefits taken are to be handed over.
(2) The debtor has to provide compensation for value instead of retransfer in so far as

  1. retransfer or handing over is excluded by the nature of what has been obtained,
  2. he has consumed, transferred, encumbered, converted or transformed the object received,
  3. the object received has deteriorated or is destroyed; however, deterioration which has arisen by proper operation is left out of consideration. If a counterperformance is determined in the contract, it is to be taken as a basis in the calculation of the compensation for value.

(3) The duty to provide compensation for value lapses:

  1. if the defect giving rise to the entitlement to withdraw has shown itself for the first time during the conversion or transformation of the object,
  2. in so far as the creditor is responsible for the deterioration or destruction or the harm would likewise have occurred in his hands,
  3. if in the case of a statutory right of withdrawal the deterioration or the destruction occurred in the hands of the person entitled even though he observed that care which he usually applies in his own affairs.
    A remaining enrichment must be handed over.

(4) The creditor can demand compensation for violation of a duty under paragraph 1 in accordance with §§ 280 to 283.

§ 347 Benefits and uses after withdrawal
(1) If, contrary to the rules of a proper business, the debtor does not obtain benefits even though he could have done so, then he is obliged to provide the creditor with compensation for value. In the case of a statutory right of withdrawal, the person entitled only has to take responsibility in relation to the benefits for that care which he usually uses in his own affairs
(2) If the debtor gives the object back, provides compensation for value, or his duty to provide compensation for value is excluded in accordance with § 346 paragraph 3 no 1 or 2, then he is to be compensated for necessary expenditure. Other expenses are to be reimbursed in so far as the creditor is enriched by these.

§ 348 Simultaneously fulfilment
The obligations of the parties arising from withdrawal are to be fulfilled simultaneously. The provisions of §§ 320, 322 apply correspondingly.

§ 349 Declaration of withdrawal
Withdrawal takes place by a declaration as against the other party.

§ 350 Extinguishment of right of withdrawal after setting of period
If a period has not been agreed for the exercise of the contractual right of withdrawal, a reasonable period for the exercise can be determined for the person entitled by the other party. The right of withdrawal is extinguished if the withdrawal is not declared before the expiry of the period.

§ 351 Indivisibility of right of withdrawal
If there are several participants on the one or the other side in respect of a contract, the right of withdrawal can only be exercised by all and against all. If the right of withdrawal is extinguished for one of the persons entitled, it is also extinguished for the remainder.

§ 352 Set off after non-fulfilment
Withdrawal because of non-fulfilment of an obligation is ineffective if the debtor could free himself from the obligation by set off and declares the set off without delay after the withdrawal.

§ 353 Withdrawal in return for forfeit
If the right of withdrawal is reserved in return for payment of a forfeit, the withdrawal is ineffective if the forfeit is not paid before or at the time of the declaration and the other party rejects the declaration on this ground without delay. The declaration is however effective if the forfeit is paid without delay after the rejection.

§ 354 Forfeiture clause
If a contract is concluded with the reservation that the debtor is to lose his rights under the contract if he does not fulfil his obligations, the creditor is entitled to withdraw from the contract when this occurs.

Second Sub-title - Right of revocation and return in respect of consumer contracts

§ 355 Right of revocation in respect of consumer contracts
(1) If a right of revocation is granted to a consumer by statute in accordance with this provision, then he is no longer bound by his declaration of will to conclude the contract if he has revoked it within the period. The revocation does not have to contain any reasons and must be declared in text form or by sending the thing back within two weeks to the undertaking; punctual dispatch suffices for the observance of the period.
(2) The period begins with the point in time at which a clearly formulated warning about his right of revocation has been communicated to the consumer in text form, which makes his rights clear to him according to the requirements of the method of communication employed, and which also contains the name and address of the person against whom the revocation must be declared and an indication of the beginning of the period and the regime of paragraph 1 sentence 2. It must be signed separately by the consumer in the case of contracts which are not notarially authenticated, or provided with a qualified electronic signature. If the contract must be concluded in writing, then the period does not begin to run before a contract document, the written application of the consumer or a copy of the contract document or of the application is made available to the consumer. If the commencement of the period is in dispute, the burden of proof falls on the undertaking.
(3) The right of revocation is extinguished at the latest six months after the conclusion of the contract. For the delivery of goods the period does not begin before the day of their arrival with the recipient, and further not in the case of distance sale contracts about financial services if the undertaking has not properly fulfilled its duties of communication under § 312c paragraph 2 no 1.

§ 356 Right of return in respect of consumer contracts
(1) The right of revocation under § 355 can, in so far as this is expressly permitted by statute, be replaced by an unlimited right of return in the contract in respect of conclusion of a contract on the basis of a sale prospectus. It is a prerequisite that

  1. a clearly formulated warning about the right of return is contained in the sale propectus,
  2. the consumer could obtain detailed knowledge of the sale prospectus in the absence of the undertaking and
  3. the consumer is granted the right of return in text form.

(2) The right of return can be exercised within the period for revocation (which does not however begin before the receipt of the thing) and only by sending the thing back or if the thing cannot be sent back as a packet, by a demand to take it back. § 355 paragraph 1 sentence 2 applies correspondingly.

§ 357 Legal consequences of revocation and return
(1) The provisions about statutory withdrawal apply correspondingly to the right of revocation and of return in so far as no different provision is made. § 286 paragraph 3 applies for the obligation to reimburse payments under this provision correspondingly; the period determined there begins with the consumer’s declaration of revocation or return. In this connection the period with respect to an obligation of reimbursement on the part of the consumer begins with the giving of this declaration, and with respect to an obligation of reimbursement on the part of the undertaking with its arrival.
(2) The consumer is obliged to send the thing back when exercising the right of revocation, if it can be sent by a packet. Costs and risks of sending back are born by the undertaking in the cases of revocation and return. If a right of revocation under § 312d paragraph 1 sentence 1 exists, the regular costs of return may be contractually imposed on the consumer if the price of the thing to be sent back does not exceed a sum of 40 euros or if, in the case of a higher price for the thing, the consumer has not yet provided the counter-performance or a part payment at the time of the revocation, unless the goods delivered do not correspond to those ordered.
(3) The consumer must, contrary to § 346 paragraph 2 sentence 1 no 3, provide compensation for value for a deterioration which has arisen through proper operation of the thing, if he has been referred in text form, at the latest at the conclusion of the contract, to this legal consequence and the possibility of avoiding it. This does not apply if the deterioration is to be attributed exclusively to the testing of the thing. § 346 paragraph 3 sentence 1 no 3 does not apply if the consumer has been properly warned about his right of revocation or has obtained knowledge of this in some other way.
(4) More extensive claims do not exist.

§ 358 Connected contracts
(1) If the consumer has effectively revoked his declaration of will to conclude a contract regarding the delivery of goods or the provision of another service by an undertaking, then he is also no longer bound by his declaration of will to conclude a consumer credit contract connected with this contract.
(2) If the consumer has effectively revoked his declaration of will to conclude a consumer credit contract then he is also no longer bound by his declaration of will to conclude a contract connected with this consumer credit contract about the delivery of goods or the provision of another service. If the consumer can revoke the declaration of will to conclude the connected contract in accordance with this subtitle, paragraph 1 alone applies and his right of revocation under § 495 paragraph 1 is excluded. If the consumer nevertheless declares the revocation of the consumer credit contract in the case of sentence 2, this counts as revocation of the connected contract as against the undertaking in accordance with paragraph 1.
(3) A contract about the delivery of goods or the provision of another service and a consumer credit contract are connected if the credit wholly or partially facilitates the financing of the other contract and both contracts form an economic unity. An economic unity is in particular to be assumed when the undertaking itself finances the counterperformance of the consumer, or in the case of financing by a third party if the provider of credit makes use of the co-operation of the undertaking at the preparation or the conclusion of the consumer credit contract.
(4) § 357 applies correspondingly for the connected contract. In the case of paragraph 1 claims for payment of interest and costs from the winding up of the consumer credit contract against the consumer are however excluded. The provider of credit steps into the rights and duties of the undertaking under the connected contract in the relationship to the consumer in respect of the legal consequences of the revocation or the return if the credit has already gone to the undertaking when the revocation or return comes into effect.
(5) The necessary warning about the right of revocation or return must refer to the legal consequences under paragraph 1 and paragraph 2 sentences 1 and 2.

§ 359 Objections in respect of connected contracts
The consumer can refuse to pay back the credit in so far as objections under the connected contract would entitle him to refuse his performance as against the undertaking with whom he has concluded the connected contract. This does not apply if the financed payment does not exceed 200 euros as well as in respect of objections which are based on a contract amendment agreed between this undertaking and the consumer after conclusion of the consumer credit contract. If the consumer can demand subsequent fulfilment, he can only refuse payment back of the credit if the subsequent fulfilment has failed.
[…]

FOURTH SECTION - Extinguishment of obligation relationships

First Title - Fulfilment

§ 362 Extinguishment by performance
(1) An obligation relationship is extinguished when the performance owed is effected in favour of the creditor.
(2) If performance is made to a third party for the purpose of fulfilment, the provisions of § 185 apply.

§ 363 Burden of proof in case of acceptance as fulfilment
If the creditor has accepted as fulfilment a performance offered to him as fulfilment, the burden of proof falls on him if he wants the performance not to be counted as fulfilment because it was a performance different from the one owed or because it was deficient.
[…]

Third Title - Settling of accounts

§ 387 Prerequisites
If two people owe each other performances which are analogous in their subject matter, each party can set off his demand against the demand of the other party as soon as he can demand the performance due to him and effect the performance which he owes.
[…]

Fifth Section - Transfer of demand

§ 398 Assignment
A demand can be transferred (assignment) by the creditor to another person by a contract with this person. The new creditor takes the place of the former creditor at the conclusion of the contract.
[…]

§ 404 Debtor’s objections
The debtor can set against the new creditor the objections which were established at the time of the assignment of the demand against the former creditor.
[…]

§ 407 Legal dealings towards former creditor
(1) The new creditor must allow a performance to take effect against himself which the debtor effects in favour of the former creditor after the assignment, as well as any legal transaction which is undertaken after the assignment between the debtor and the former creditor in respect of the demand, unless the debtor knows of the assignment at the time of the performance or at the time of the undertaking of the legal transaction.
(2) If a legally effective judgment about the demand has been issued in an action which has started between the debtor and the former creditor after the assignment, the new creditor must allow the judgment to apply against him, unless the debtor knew of the assignment when the action began.

§ 408 Multiple assignment
(1) If an assigned demand is assigned again by the former creditor to a third party, if the debtor performs in favour of the third party or if a legal transaction is undertaken between the debtor and the third party or an action has started, the provisions of § 407 apply correspondingly as against the former transferee in favour of the debtor.
(2) The same applies if the demand which has been already assigned is transferred by judicial decision to a third party or if the former creditor acknowledges to the third party that the demand which has already been assigned has passed by virtue of statute law to the third party.

§ 409 Notification of assignment
(1) If the creditor notifies the debtor that he has assigned the demand, he must allow the notified assignment to have effect against himself in his relationship with the debtor, even if it did not occur or is not effective. It is equivalent to notice if the creditor has issued a document about the assignment to the new creditor described in the document who produces it to the debtor.
(2) The notice can only be withdrawn with the consent of the person who has been described as the new creditor.
[…]

§ 412 Statutory transmission of demand
The provisions of §§ 399 to 404, 406 to 410 apply correspondingly to the transfer of a demand by virtue of statute law.

Sixth Section - Taking over of obligation

§ 414 Contract between creditor and transferee
An obligation can be taken over by a third party by a contract with the creditor in such a way that the third party takes the place of the former debtor.

§ 415 Contract between debtor and transferee
(1) If the taking over of the obligation by the third party is agreed with the debtor, its effectiveness depends on the creditor’s ratification. Ratification can only take place when the debtor or the third party has informed the creditor of the taking over of the obligation. Until ratification the parties can alter or cancel the contract.
(2) If ratification is refused, the taking over of the obligation is deemed not to have taken place. If the debtor or the third party invites the creditor to make a declaration about ratification and determines a period, the ratification can only be declared up until expiry of the period; if it is not declared, it is deemed to have been refused.
(3) As long as the creditor has not given the ratification, the transferee in case of doubt is obliged as against the debtor to satisfy the creditor punctually. The same applies when the creditor refuses ratification.
[…]

§ 417 Objections by transferee
(1) The transferee can set objections against the creditor which arise from the legal relationship between the creditor and the former debtor. He cannot set off a demand belonging to the former debtor.
(2) The transferee cannot derive objections against the creditor from the legal relationship between the transferee and the former debtor which forms the basis of the taking over of the obligation.
[…]

Seventh Section - Multiplicity of debtors and creditors

§ 421 Joint debtors
If several people owe a performance in such a way that each is obliged to effect the whole performance, but the creditor is only entitled to demand the performance once (joint debtors), the creditor can demand the performance, as he wishes, entirely or in part from each of the debtors. All the debtors remain under an obligation until the effectuation of the whole performance.

§ 422 Effect of fulfilment
(1) Fulfilment by a joint debtor is also effective for the remaining debtors. The same applies to performance in place of fulfilment, and to deposit and set off.
(2) A demand which belongs to a joint debtor cannot be set off by the remaining debtors.
[…]

§ 426 Duty to settle and transmission of demand
(1) The joint debtors are in their relationship with one another under the obligation in equal fractions, in so far as no other provision has been made. If it is not possible to obtain from one of the joint debtors the contribution which falls to him, the deficit must be born by the remaining debtors who are obliged to settle.
(2) In so far as a joint debtor satisfies the creditor and can demand settlement from the remaining debtors, the creditor’s demand against the remaining debtors passes to him. The transmission cannot be claimed to the creditor’s disadvantage.
[…]

EIGHTH SECTION

First Title - Purchase and exchange

First Sub-title - General provisions

§ 433 Typical contractual duties in purchase contract
(1) The seller of a thing is obliged by a purchase contract to hand the thing over to the purchaser and to provide the property in the thing. The seller has to provide the thing to the purchaser free from physical and legal defects.
(2) The purchaser is obliged to pay the agreed purchase price to the seller and to take the purchased thing.

§ 434 Physical defects
(1) The thing is free from physical defects if it has the agreed composition when the risk passes. In so far as the composition is not agreed, the thing is free from physical defects

  1. if it is suitable for the use assumed according to the contract, or otherwise
  2. if it is suitable for the usual use and has a composition which is usual with things of the same kind and which the purchaser can expect in accordance with the type of thing.

Composition according to sentence 2 no 2 also includes characteristics which the purchaser can expect according to the public statements of the seller, of the manufacturer (§ 4 paragraphs 1 and 2 of the Product Liability Act) or his assistant, in particular in the advertising or in the marking about particular characteristics of the thing unless the seller did not know of the statement and also need not have known of it, it was corrected at the point in time of the conclusion of the contract in an equally valid manner, or it could not influence the decision to purchase.
(2) A physical defect is also present if the agreed assembly has been carried out by the seller or his agent improperly. Further a physical defect is present in a thing intended for assembly if the assembly instructions are defective unless the thing is assembled correctly.
(3) It is equivalent to a physical defect if the seller delivers a different thing or too small a quantity.

§ 435 Legal defects
The thing is free from legal defects if third parties cannot claim any rights against the purchaser in relation to the thing or only those taken over in the purchase contract. It is equivalent to a legal defect if a right which does not exist is entered in the land register.
§ 436 Public burdens on land
(1) In so far as nothing different is agreed, the seller of a piece of land is obliged to bear development contributions and other residents contributions in respect of adjoining land for the steps in construction which have been begun up to the day of the conclusion of the contract, independently of the point in time when the contribution obligation arises.
(2) The seller of a piece of land is not liable for its freedom from other public taxes and from other public burdens which are not appropriate for entry in the land register.

§ 437 Rights of purchaser in respect of defects
If the thing is defective, the purchaser can, if the prerequisites of the following provisions are present and in so far as no different provision is made,

  1. demand subsequent fulfilment under § 439,
  2. withdraw from the contract under §§ 440, 323 and 326 paragraph 5 or reduce the purchase price under § 441 and
  3. demand compensation under §§ 440, 280, 281, 283 and 311a or reimbursement of abortive expenditure under § 284.

§ 438 Limitation of claims in respect of defects
(1) The limitation period for claims described in § 437 nos 1 and 3 expires

  1. in 30 years if the defect consists of
    a) a right in rem of a third party on the basis of which handing over of the purchased thing can be demanded, or
    b) another right which is entered in the land register.
  2. in five years
    a) in the case of a building and
    b) in the case of a thing which has been used for a building in accordance with its usual manner of use and has caused the building’s defectiveness, and
  3. in two years in other cases.

(2) The limitation period begins in relation to pieces of land with the transfer and in other cases with the delivery of the thing.
(3) Contrary to from paragraph 1 nos 2 and 3 and paragraph 2, claims expire after the regular limitation period if the seller has deceitfully kept the defect secret. In the case of paragraph 1 no 2 the limitation does not however take effect before the expiry of the period determined there.
(4) § 218 applies for the right of withdrawal described in § 437. The purchaser can in spite of ineffectiveness of the withdrawal under § 218 paragraph 1 refuse payment of the purchase price in so far as he would be entitled to do so on the basis of the withdrawal. If he makes use of this right, the seller can withdraw from the contract.
(5) § 218 and paragraph 4 sentence 2 apply correspondingly to the right of reduction described in § 437.

§ 439 Subsequent fulfilment
(1) The purchaser can demand as subsequent fulfilment according to his choice the removal of the defect or the delivery of a thing free from the defect.
(2) The seller has to bear the expenditure necessary for the purpose of subsequent fulfilment, in particular transport, road toll, work and materials costs.
(3) The seller can refuse the kind of subsequent fulfilment chosen by the purchaser regardless of § 275 paragraphs 2 and 3 if it is only possible with disproportionate cost. In this connection in particular the value of the thing in a condition free from the defect, the significance of the defect and the question of whether it would be possible to resort to the other kind of subsequent fulfilment without substantial disadvantages for the purchaser are to be taken into consideration. The purchaser’s claim in this case is limited to the other kind of subsequent fulfilment; the right of the seller to refuse even this under the prerequisites of sentence 1 remains unaffected.
(4) If the seller delivers a thing which is free from the defect for the purpose of subsequent fulfilment, he can demand from the purchaser the retransfer of the defective thing in accordance with §§ 346 to 348.

§ 440 Special provisions for withdrawal and compensation
Except in the cases of § 281 paragraph 2 and § 323 paragraph 2 it is not necessary to set a period even if the seller refuses both kinds of subsequent fulfilment in accordance with § 439 paragraph 3 or if the kind of subsequent fulfilment to which the purchaser is entitled has failed or cannot be expected of him. A repair counts after the second unsuccessful attempt as having failed if nothing different follows in particular from the kind of thing or the kind of defect or the other circumstances.

§ 441 Reduction
(1) Instead of withdrawing, the purchaser can reduce the purchase price by declaration made to the seller. The exclusionary ground of § 323 paragraph 5 sentence 2 does not apply.
(2) If there are several participants on the purchaser’s side or on the seller’s side, the reduction can only be declared by all or against all.
(3) In a case of reduction, the purchase price is to be reduced in the ratio in which at the time of the conclusion of the contract the value of the thing in a condition free from the defect would have stood to its real value. The reduction is, so far as is necessary, to be ascertained by valuation.
(4) If the purchaser has paid more than the reduced purchase price, the surplus is to be reimbursed by the seller. § 346 paragraph 1 and § 347 paragraph 1 have corresponding application.

§ 442 Knowledge of purchaser
(1) The rights of a purchaser in respect of a defect are excluded if he knows of the defect on conclusion of the contract. If a defect remains unknown to the purchaser as a result of gross negligence, the purchaser can only claim rights because of this defect if the seller has deceitfully kept the defect secret or has undertaken a guarantee for the composition of the thing.
(2) The seller has to remove a right entered in the land register even if the purchaser knows of it.

§ 443 Guarantee of composition and durability
(1) If the seller or a third party undertakes a guarantee for the composition of the thing or for the fact that the thing will keep a certain composition for a certain length of time (durability guarantee), the purchaser in the guarantee case has, regardless of the statutory claims, the rights from the guarantee to the conditions given in the guarantee declaration and the relevant advertising against the person who has granted the guarantee.
(2) In so far as a durability guarantee has been undertaken, it is presumed that a physical defect arising during its period of validity is the basis of the rights under the guarantee.

§ 444 Exclusion of liability
The seller cannot refer to an agreement by which the purchaser’s rights in respect of a defect are excluded or limited in so far as he has deceitfully kept the defect secret or has undertaken a guarantee about the composition of the thing.

§ 445 Limitation of liability in case of public auctions
If a thing is sold on the basis of a right of lien in a public auction under the description "lien", then the purchaser only has rights in respect of a defect if the seller has deceitfully kept the defect secret or has undertaken a guarantee about the composition of the thing.

§ 446 Transfer of risk and burdens
The risk of accidental destruction and of accidental deterioration passes to the purchaser with the handing over of the thing sold. From the handing over onwards the benefits are due to the purchaser and he bears the burdens of the thing. It is equivalent to handing over if the purchaser is in delay in acceptance.

§ 447 Passing of risk in case of postal purchase by dispatch
(1) If the seller sends the thing sold to another place than the place of fulfilment at the purchaser’s demand, the risk passes to the purchaser as soon as the seller has delivered the thing to the forwarding agent, the carrier or the other person or institution determined for the carrying out of the dispatch.
(2) If the purchaser has given special instructions about the kind of dispatch and if the seller deviates from the instructions without compelling reasons, the seller is responsible to the purchaser for the harm arising from this.

§ 448 Costs of handing over and comparable costs
(1) The seller bears the costs of the handing over of the thing and the purchaser the costs of the acceptance and the dispatch of the thing to a place other than the place of fulfilment.
(2) The purchaser of a piece of land bears the costs of recording the purchase contract and of the transfer, the entry in the land register and of the declarations necessary for the entry.

§ 449 Reservation of property
(1) If the seller of a movable thing has reserved the property until payment of the purchase price, it is to be assumed in case of doubt that the property will be transferred under the condition precedent of complete payment of the purchase price (property reservation).
(2) On the basis of the property reservation the seller can only demand the thing if he has withdrawn from the contract.
(3) Agreement of a property reservation is void in so far as the passing of the property is made dependent on the buyer fulfilling the demands of a third party, in particular of an undertaking connected with the seller.

§ 450 Excluded purchasers in respect of certain sales
(1) In relation to a sale by way of execution, the person commissioned with the undertaking or management of the sale and the assistants called in by him inclusive of the person recording the proceedings are not permitted to buy the object to be sold either for themselves personally or by someone else as agent for another.
(2) Paragraph 1 also applies on a sale outside execution, if the order for the sale has been given on the basis of a statutory provision which empowers the customer to have the object sold for the account of another, in particular in the cases of lien sale and of sale permitted in §§ 383 and 385 as well as on a sale from an insolvent estate.

§ 451 Purchase by excluded purchaser
(1) The effectiveness of a purchase which occurred contrary to § 450 and of the transfer of the object purchased depends on the consent of those participating as debtor, owner or creditor in respect of the sale. If the purchaser challenges a participant to make a declaration about the permission, § 177 paragraph 2 applies correspondingly.
(2) If as a result of the refusal of the permission a new sale is undertaken, the earlier purchaser must bear the costs of the new sale as well as the smaller proceeds.

§ 452 Purchase of ships
The provisions of this subtitle about the purchase of land apply correspondingly to the purchase of registered ships and ship construction work.

§ 453 Purchase of rights
(1) The provisions about the purchase of things apply correspondingly to the purchase of rights and other objects.
(2) The seller bears the costs of the establishment and transfer of the right.
(3) If a right is sold which gives entitlement to possession of a thing, the seller is obliged to hand the thing over to the purchaser free from physical and legal defects.

Second Sub-title - Special types of purchase

First Chapter - Purchase on approval

§ 454 Occurrence of purchase contract
(1) On a purchase on approval or on inspection, the approval of the purchased object is a matter entirely in the purchaser’s discretion. In case of doubt, the purchase is concluded subject to the condition precedent of approval.
(2) The seller is obliged to permit the purchaser to investigate the object.

§ 455 Period for approval
The approval of an object purchased on approval or on inspection can only be declared within the agreed period and in the absence of such a period only until the expiry of a reasonable period determined by the seller for the purchaser. If the thing was handed over to the purchaser for the purpose of approval or inspection, his silence counts as approval.

Second Chapter - Repurchase

§ 456 Occurrence of repurchase
(1) If the seller has reserved the right of repurchase in the purchase contract, the repurchase comes into existence with the seller’s declaration to the purchaser that he is exercising the right of repurchase. The declaration does not need to be in the form for the purchase contract.
(2) The price at which the sale takes place applies in case of doubt for the repurchase as well.

§ 457 Liability of reseller
(1) The reseller is obliged to hand over to the repurchaser the purchased object with its accessories.
(2) If before the exercise of the right of repurchase the reseller is to blame for deterioration, destruction or impossibility of handing over the purchased object arising for some other reason, or if he significantly changes the object, he is responsible for the harm arising from this. If the object has deteriorated without fault on the part of the reseller or if it has only changed insignificantly, the repurchaser cannot demand reduction of the purchase price.

§ 458 Removal of rights of third parties
If before the exercise of the right of repurchase the reseller has exercised his right of disposal over the object purchased, he is obliged to remove the rights of third parties founded on this. A disposition which occurs by way of execution or the implementation of a detention warrant or by the insolvency administrator is equivalent to a disposition by the reseller.

§ 459 Reimbursement of expenditure
The reseller can demand reimbursement of expenditure which he has made in respect of the purchased object before the repurchase in so far as the value of the object is raised by the expenditure. He can take away any equipment which he has provided to the thing to be handed over.

§ 460 Repurchase at valuation
If the assessed value which the object purchased has at the time of repurchase is agreed as the repurchase price, the reseller is not responsible for deterioration, destruction or impossibility of handing over the object arising for some other reason, and the repurchaser is not obliged to reimburse expenditure.

§ 461 Several persons entitled to repurchase
If the right of repurchase belongs to several people jointly, it can only be exercised as a whole. If is has been extinguished for one of the persons entitled or if one of them does not exercise his right, the remaining ones are entitled to exercise the right of repurchase as a whole.

§ 462 Exclusive period
The right of repurchase can only be exercised in relation to land until the expiry of 30 years and in relation to other objects until the expiry of three years after the agreement of the reservation. If a period is determined for the exercise, this takes the place of the statutory period.

Third Chapter - Pre-emption

§ 463 Prerequisites for exercise
A person who is entitled to a right of pre-emption in respect of an object can exercise the right of pre-emption as soon as the person under the obligation has concluded a purchase contract with a third party about the object.

§ 464 Exercise of right of pre-emption
(1) The right of pre-emption is exercised by a declaration made to the person under the obligation. The declaration does not need the form determined for the purchase contract.
(2) On the exercise of the right of pre-emption the purchase comes into existence between the person entitled and the person under the obligation under the provisions which the person under the obligation has agreed with the third party.

§ 465 Ineffective agreements
An agreement by the person under the obligation with the third party by which the purchase is made dependent on the non-exercise of the right of pre-emption or a right of withdrawal is reserved to the person under the obligation for the case of exercise of the right of pre-emption is ineffective as against the person entitled to the right of pre-emption.

§ 466 Subsidiary performances
If the third party has committed himself in the contract to a subsidiary performance which the person entitled to the right of pre-emption is not in a position to effect, the person entitled to the right of pre-emption must instead of the subsidiary performance pay its value. If the subsidiary performance cannot be valued in money, the exercise of the right of pre-emption is excluded; the agreement of the subsidiary performance does not however come into consideration if the contract with the third party would be concluded even without it.

§ 467 Total price
If the third party has purchased the object to which the right of pre-emption relates with other objects at a total price, the person entitled to the right of pre-emption must pay a proportionate part of the total price. The person under the obligation can demand that the right of pre-emption be extended to all things which cannot be separated without disadvantage to him.

§ 468 Deferment of payment of purchase price
(1) If the purchase price has been deferred for the third party in the contract, the person entitled to the right of pre-emption can only claim deferment if he provides security for the deferred sum.
(2) If a piece of land is the subject of the right of pre-emption, it does not need the provision of security in so far as the reservation of a mortgage on the land has been agreed for the deferred purchase price or a debt for which a mortgage on the land exists has been taken over and set against the purchase price. Corresponding provisions apply if a registered ship or ship construction work is the subject of the right of pre-emption.

§ 469 Duty to communicate, period for exercise
(1) The person under the obligation must without delay communicate to the person entitled to the right of pre-emption the content of the contract which has been concluded with the third party. Communication by the person under the obligation can be replaced by communication by the third party.
(2) The right of pre-emption can be exercised in respect of land only until the expiry of a period of two months and in respect of other objects only until the expiry of the period of a week after the receipt of the communication. If a period is determined for the exercise of the right, this takes the place of the statutory period.

§ 470 Sale to statutory heir
The right of pre-emption does not in a case of doubt extend to a sale which occurs with regard to a future right of inheritance to a statutory heir.

§ 471 Sale on execution or insolvency
The right of pre-emption is excluded if the sale occurs by way of execution or from an insolvent estate.

§ 472 Several persons entitled to right of pre-emption
If the right of pre-emption belongs to several people jointly, it can only be exercised as a whole. If it has been extinguished for one of the persons entitled or if one of them does not exercise his right, the others are entitled to exercise the right of pre-emption as a whole.

§ 473 Non-transferability
The right of pre-emption is not transferable and does not pass to the heirs of the person entitled in so far as no different provision is made. If the right is limited to a certain period, then in case of doubt it is inheritable.

Third Sub-title - Purchase of consumer goods

§ 474 Concept of purchase of consumer goods
(1) If a consumer buys a moveable thing from an undertaking (purchase of consumer goods), the following supplementary provisions apply. This does not apply to second hand things which are sold in a public auction in which the consumer can take part personally.
(2) §§ 445 and 447 do not apply to the purchase contracts regulated under this subtitle.

§ 475 Divergent agreements
(1) The undertaking cannot rely on an agreement made before the communication of a defect to the undertaking if that agreement deviates from §§ 433 to 435, 437, 439 to 443 as well as from the provisions of this subtitle, to the disadvantage of the consumer. The provisions described in sentence 1 apply even if they are circumvented by other formulations.
(2) Limitation of the claims described in § 437 cannot be reduced by a legal transaction before the communication of a defect to the undertaking, if the agreement leads to a limitation period from the statutory commencement of limitation of less than two years, or in respect of second hand things of less than one year.
(3) Paragraphs 1 and 2 do not apply for the exclusion or limitation of the claim to compensation, notwithstanding §§ 307 to 309.

§ 476 Reversal of burden of proof
If a physical defect shows itself within six months from the passing of the risk, it is presumed that the thing was already defective at the time the risk passed, unless this presumption is irreconcilable with the kind of thing or defect involved.

§ 477 Special provisions for guarantees
(1) A guarantee declaration (§ 443) must be framed simply and comprehensibly. It must contain

  1. reference to the statutory rights of the consumer as well as to the fact that they are not limited by the guarantee and
  2. the content of the guarantee and all significant information which is necessary for the claiming of the guarantee, in particular the length and the territorial area of validity of the guarantee protection as well as the name and address of the provider of the guarantee.

(2) The consumer can demand that the guarantee declaration be communicated to him in text form.
(3) The effectiveness of the guarantee obligation is not affected by the fact that one of the above requirements is not fulfilled.

§ 478 Right of recourse by undertaking
(1) If the undertaking had to take back a thing sold as newly manufactured as a result of its defectiveness or the consumer has reduced the purchase price, the setting of a period (which would otherwise be necessary) because of the defect claimed by the consumer is not needed for the rights of the undertaking described in § 437 against the undertaking who had sold him the thing (the supplier).
(2) The undertaking can in respect of a sale of a newly manufactured thing demand from its supplier reimbursement of the expenditure which the undertaking had to bear in the relationship to the consumer under § 439 paragraph 2 if the defect claimed by the consumer was already present on the passing of the risk to the undertaking.
(3) In the cases of paragraphs 1 and 2, § 476 applies with the proviso that the period begins with the passing of the risk to the consumer.
(4) The supplier cannot rely on an agreement made before the communication of a defect to the supplier which deviates from §§ 433 to 435, 437, 439 to 443, as well as from paragraphs 1 to 3 and from § 479 to the disadvantage of the undertaking, if no settlement of equal value is granted to the person who is creditor in respect of the right of recourse. Notwithstanding § 307, sentence 1 does not apply for the exclusion or limitation of the claim to compensation. The provisions described in sentence 1 apply even if they are circumvented by other formulations.
(5) Paragraphs 1 to 4 apply correspondingly to the claims of the supplier and of the remaining purchasers in the supply chain against the seller in question if the debtors are undertakings.
(6) § 377 of the Commercial Code remains unaffected.

§ 479 Limitation of recourse claims
(1) The claims to reimbursement of expenses provided for in § 478 paragraph 2 expire two years from delivery of the thing.
(2) The limitation period in respect of the claims of the undertaking provided for in §§ 437 and 478 paragraph 2 against its supplier because of the defect in a newly manufactured thing sold to a consumer commences at the earliest two months after the point in time at which the undertaking has fulfilled the consumer’s claims. This suspension of the expiry of the period ends at the latest five years after the point in time at which the supplier has delivered the thing to the undertaking.
(3) The above paragraphs apply correspondingly to the claims of the supplier and of the remaining purchasers in the supply chain against the seller in question if the debtors are undertakings.

Fourth Sub-title - Exchange

§ 480 Exchange
The provisions about purchase apply correspondingly to exchange.

Second Title - Time-share residence rights contracts

§ 481 Concept of time share residence rights contract
(1) Time-share residence rights contracts are contracts by which an undertaking creates the right (or promises to create it) for a consumer in return for payment of a total price for a period of at least three years to use a residential building in each case for a determined period (or a period to be determined) of the year for the purposes of recreation or residence. The right can be a right in rem or other right and can in particular also be granted through membership of an association or shares in a company.
(2) The right can also consist of choosing the use of a residential building in each case from a stock of residential buildings.
(3) A part of a residential building is equivalent to a residential building.

§ 482 Prospectus duty in respect of time share residence rights contracts
(1) A person who as an undertaking offers to conclude time-share residence rights contracts must hand out a prospectus to every consumer who expresses interest.
(2) The prospectus described in paragraph 1 must contain a general description of the residential building or of the stock of residential buildings as well as the information provided for in the Regulation under Article 242 of the Introductory Act to the Civil Code.
(3) The undertaking can undertake an amendment in relation to the information contained in the prospectus before the conclusion of the contract in so far as this becomes necessary on the basis of circumstances on which it could have no influence.
(4) In every advertisement for the concluding of time-share residence rights contracts it must be stated that the prospectus is obtainable and where it can be requested.

§ 483 Contract and prospectus language in respect of time share residence rights contracts
(1) The contract is to be formulated in the official language (or, if there are several official languages there, in the official language chosen by the consumer) of the member state of the European Union or of the contracting state of the Treaty on the European Economic Area in which the consumer has his domicile. If the consumer belongs to another member state, he can also choose the, or one of the, official languages of the state to which he belongs instead of the language of his state of domicile. Sentences 1 and 2 also apply for the prospectus.
(2) If the contract has to be authenticated by a German notary, §§ 5 and 16 of the Authentication Act apply with the proviso that a certified translation of the contract in the language chosen by him under paragraph 1 is to be handed over to the consumer.
(3) Time-share residence rights contracts which do not comply with paragraph 1 sentences 1 and 2 or paragraph 2 are void.

§ 484 Written form in respect of time share residence rights contracts
(1) The time share residence rights contract needs written form in so far as a stricter form is not prescribed in other provisions. The conclusion of the contract in electronic form is excluded. The information contained in the prospectus described in § 482 handed over to the consumer becomes part of the content of the contract in so far as the parties do not expressly (and making reference to the deviation from the prospectus) make some different agreement. Such amendments must be communicated to the consumer before the conclusion of the contract. Notwithstanding the applicability of the prospectus information according to sentence 2, the contract document must contain the information provided for in the Regulation described in § 482 paragraph 2.
(2) The undertaking must hand over to the consumer a contract document or copy of the contract document. It must also hand over to him, if the language of the contract and the language of the state in which the residential building is situated are different, a certified translation of the contract into the language of the state in which the residential building is situated, or into a language included in the official languages of the European Union or of the Treaty for the European Economic Area. The duty to hand over a certified translation does not arise if the use right refers to a stock of residential buildings which are situated in different states.

§ 485 Right of revocation in respect of time-share residence rights contracts
(1) The consumer is entitled to a right of revocation under § 355 in respect of a time-share residence rights contract.
(2) The necessary warning about the right of revocation must also give the costs which the consumer has to reimburse in the case of revocation in accordance with paragraph 5 sentence 2.
(3) If the prospectus described in § 482 has not been handed over to the consumer before the conclusion of the contract, or is not in the language there prescribed, the period for exercise of the right of revocation consists of one month, contrary to § 355 paragraph 1 sentence 2.
(4) If one of the pieces of information which are provided for in the Regulation described in § 482 paragraph 2 is missing from the contract, the period for the exercise of the right of revocation only begins when this piece of information is communicated in writing to the consumer.
(5) Compensation for the services performed as well as for the transfer of the benefit of residential buildings is excluded, contrary to § 357 paragraphs 1 and 3. If the contract needed notarial authentication, the consumer must reimburse to the undertaking the costs of the authentication, if this is expressly provided for in the contract. In the cases of paragraphs 3 and 4, the duty to reimburse costs does not exist; the consumer can demand from the undertaking reimbursement of the costs of the contract.

§ 486 Prohibition on deposit in respect of time share residential rights contracts
The undertaking is not permitted to demand or accept payments from the consumer before the expiry of the revocation period. Provisions more favourable to the consumer remain unaffected.

§ 487 Divergent agreements
No deviation may be made from the provisions of this subtitle to the disadvantage of the consumer. The provisions of this subtitle apply, in so far as no different provision is made, even if they are circumvented by other formulations.

Third Title - Credit contract; financial assistance and instalment delivery contracts between an undertaking and a consumer

First Sub-title - Credit contract

§ 488 Typical contractual duties in credit contract
(1) By a credit contract, a lender is obliged to make available to a borrower a sum of money of an agreed amount. The borrower is obliged to pay any interest which is owed and to repay the credit made available when it is due.
(2) In so far as no different provision is made, the agreed interest is to be paid after the expiry of each year, and, if the credit is to be repaid before the expiry of a year, on the repayment.
(3) If no time is determined for the repayment of the credit, the due date depends on the lender or the borrower giving notice. The period of notice is three months. If interest is not owed, the borrower is entitled to make repayment even without notice.

§ 489 Ordinary right to give notice by borrower
(1) The borrower can give notice terminating wholly or partially a credit contract for which a fixed rate of interest is agreed for a determined period

  1. if the commitment to pay interest ends before the time determined for the repayment and no new agreement about the rate of interest has been made, provided he gives a notice period of one month, at the earliest for the expiry of the day on which the commitment to pay interest ends; if an adaptation of the rate of interest in certain time periods of up to a year has been agreed, the borrower can give notice in each case only for the expiry of the day on which the commitment to pay interest ends;
  2. if the credit is granted to a consumer and is not secured by a mortgage on land or a ship, after the expiry of six months from complete receipt, provided he gives a period of notice of three months;
  3. in any case after the expiry of ten years from complete receipt, provided he gives a period of notice of six months; if a new agreement is made about the time of repayment or the rate of interest after the receipt of the credit, the point in time of this agreement replaces the point in time of the payment out.

(2) The borrower can give notice at any time terminating a credit contract with a variable rate of interest, provided he gives a period of notice of three months.
(3) Notice by the borrower under paragraphs 1 or 2 does not count as having been given if he does not pay back the sum owed within two weeks after the notice has become effective.
(4) The borrower’s right to give notice under paragraphs 1 and 2 cannot be excluded or made more onerous contractually. This does not apply in respect of loans to the Federation, a special fund of the Federation, a Land, a commune, a group of communes, the European Communities or foreign regional bodies.

§ 490 Extraordinary right to give notice
(1) If a substantial deterioration occurs or threatens to occur in the financial circumstances of the borrower or in the value of a security lodged for the credit, by which the repayment of the credit, even using the security, is endangered, the lender can give notice having immediate effect terminating the credit contract, in case of doubt always before the paying out of the credit, and after paying out only as a rule.
(2) The borrower can terminate prematurely a credit contract in respect of which a fixed rate of interest is agreed for a determined period and the credit is secured by a mortgage on land or a ship, observing the periods in § 489 paragraph 1 no 2, if his legitimate interests require this. Such an interest is in particular present if the borrower has a need for a different utilisation of the thing lent for security for the loan. The borrower has to compensate the lender for the loss which he incurs as a result of the premature notice (compensation for early termination).
(3) The provisions of §§ 313 and 314 remain unaffected.

§ 491 Consumer credit contract
(1) The following provisions apply supplementarily for credit contracts for money between an undertaking as lender and a consumer as borrower (consumer credit contract) subject to paragraphs 2 and 3.
(2) The following provisions do not apply to consumer credit contracts

  1. in respect of which the credit to be paid out (net amount of credit) does not exceed 200 euros;
  2. which an employer concludes with his employee with interest below market rates;
  3. which are concluded within the framework of the furtherance of housing and of town planning on the basis of public law grant awards or on the basis of subsidies from public budgets directly between the public law institution awarding the means of furtherance and the borrower at rates of interest which are below market rates.

(3) The following are also not to be applied:

  1. §§ 358, 359, § 492 paragraph 1 sentence 5 no 2, § 495, § 497 paragraphs 2 and 3 and § 498 to consumer credit contracts in respect of which the granting of the credit is made dependent on securing by a mortgage on land and which takes place on conditions which are usual for credit contracts secured by mortgages on land and their intermediate financing; it is equivalent to securing by a mortgage on land if no such security is given in accordance with § 7 paragraphs 3 to 5 of the Building Savings Bank Act;
  2. § 358 paragraphs 2, 4 and 5 and §§ 492 to 495 to consumer credit contracts which are drawn up in a court record established in accordance with the provisions of the Civil Proceedings Order or are notarially authenticated if the record or the notarial document contains the annual interest, the costs of the credit taken into account on conclusion of the contract and the prerequisites under which the annual interest or the costs can be changed;
  3. § 358 paragraphs 2, 4 and 5 and § 359 to consumer credit contracts which finance the acquisition of securities, foreign currency, derivatives or precious metals.

§ 492 Written form and contractual content
(1) In so far as no stricter form is prescribed, consumer credit contracts are to be concluded in writing. Conclusion of the contract in electronic form is excluded. The requirement of written form is satisfied if the offer and acceptance are declared by the contracting parties separately in writing in each case. The declaration of the lender does not need to be signed if it is drawn up with the assistance of automatic equipment. The contractual declaration to be signed by the lender must give

  1. the net credit sum or the maximum limit of the credit;
  2. the total amount of all the instalments to be paid by the borrower for the repayment of the loan, as well as the payment of interest and other costs, if the total sum is established in its amount on conclusion of the consumer credit contract for the total loan period. Further, in respect of credit with conditions which can be altered and which is repaid in instalments, a total sum is to be given on the basis of the credit conditions applying at the conclusion of the contract. No total sum is to be given in respect of credit for which an option is given to claim it up to a maximum limit.
  3. the method of repayment of the loan or, if an agreement about this has not been provided for, the regime for termination of the contract;
  4. the rate of interest and all other costs of the loan which, in so far as their amount is known, are to be described individually and in other respects are to be given according to their basis, inclusive of possible negotiation costs to be borne by the borrower;
  5. the effective annual interest or, if an alteration of the rate of interest or other price determining factors is reserved, the original effective annual interest; together with the original effective annual interest there must also be stated the prerequisites under which the price determining factors can be altered and over what period burdens which arise from an incomplete payment out or from an addition to the credit are to be taken into account in the calculation of the effective annual interest;
  6. the costs of a remaining debt insurance or other insurance which is concluded in connection with the consumer credit contract;
  7. securities to be arranged.

(2) Effective annual interest is the total burden per year, to be given as a percentage rate of the net credit sum. The calculation of the effective and the original effective annual interest is determined in accordance with § 6 of the Regulation of Price Information Order.
(3) The lender must make a copy of the contract declarations available to the borrower.
(4) Paragraphs 1 and 2 also apply for the authority which a borrower gives on the conclusion of a consumer credit contract. Sentence 1 does not apply for an authority relating to court process and an authority which is notarially authenticated.

§ 493 Overdraft credit
(1) The provisions of § 492 do not apply for consumer credit contracts in respect of which a credit institution grants to a borrower the right to overdraw his current account to a certain amount, if, apart from the interest for the credit claimed, no further costs are taken into account and the interest is not charged in shorter periods than three months. The credit institution has to inform the borrower before the claiming of such a credit about

  1. the maximum limit of the loan;
  2. the annual interest applying at the point in time of the information;
  3. the conditions under which the rate of interest can be changed;
  4. the regulation of the termination of the contract.

The contract conditions in accordance with sentence 2 nos 1 to 4 are to be confirmed to the borrower at the latest after the credit is first claimed. The borrower must further be informed while the credit is being claimed about every alteration of the annual interest. The confirmation in accordance with sentence 3 and the information in accordance with sentence 4 must take place in text form; it suffices if they take place on a statement of account.
(2) If a credit institution allows a current account to be overdrawn and if the account is overdrawn for longer than three months, the credit institution must inform the borrower of the annual interest, the costs and the amendments in this connection; this can occur in the form of a notice on a statement of account.

§ 494 Legal consequences of defects in form
(1) The consumer credit contract and the authority given by the consumer for the conclusion of such a contract are void if written form is not entirely observed or if one of the items of information prescribed in § 492 paragraph 1 sentence 5 nos 1 to 6 is absent.
(2) Notwithstanding a defect under paragraph 1, the consumer credit contract is valid in so far as the borrower receives the credit or claims it. However the rate of interest (§ 492 paragraph 1 sentence 5 no 4) which is used as a basis for the consumer credit contract reduces to the statutory rate of interest if it, the effective or original effective annual interest (§ 492 paragraph 1 sentence 5 no 5) or the total sum (§ 492 paragraph 1 sentence 5 no 2) is not given. Costs not stated are not owed by the borrower. Agreed instalments are to be calculated afresh taking into consideration the reduced interest or costs. If the prerequisites under which price-determining factors can be altered are not stated, these can not be altered to the disadvantage of the borrower. Securities cannot be demanded if information about them is absent; this does not apply if the net credit sum exceeds 50,000 euros.
(3) If the effective or the original effective annual interest is given at too low a level, the rate of interest on which the consumer credit contract is based reduces by the percentage rate by which the effective or the original effective annual interest is understated.

§ 495 Right of revocation
(1) The borrower has a right of revocation under § 355 in respect of a consumer credit contract.
(2) If the borrower has received the credit, the revocation counts as not having occurred if he does not pay back the credit within two weeks either after declaration of the revocation or after payment out of the credit. This does not apply in the case of § 358 paragraph 2. The necessary information about the right of revocation must refer to the legal consequence under sentence 1.
(3) Paragraphs 1 and 2 do not apply to the consumer credit contracts mentioned in § 493 paragraph 1 sentence 1 if the borrower can pay back the credit at any time after the contract without observing a notice period and without additional costs.

§ 496 Renunciation of objections, prohibition on bills of exchange and cheques
(1) An agreement by which the borrower renounces the right to raise against a creditor in respect of the transfer (the transferee) in accordance with § 404 objections which he has against the lender, or to set off also against the creditor in respect of the transfer (the transferee) in accordance with § 406, a demand which he has against the lender, is ineffective.
(2) The borrower cannot be obliged to enter into a commitment by way of a bill of exchange for the claims of the lender under the consumer credit agreement. The lender cannot accept a cheque from the borrower for the securing of his claims under the consumer credit agreement. The borrower can demand from the lender at any time the handing over of a bill of exchange or cheque which has been issued contrary to sentence 1 or 2. The lender is liable for all harm which is suffered by the borrower as a result of such an issue of a bill of exchange or cheque.

§ 497 Treatment of interest for delay, attribution of partial payments
(1) In so far as the borrower delays in making payments which he owes on the basis of the consumer credit contract, he must pay interest on the sum owed in accordance with § 288 paragraph 1, unless it is a consumer credit contract secured on a mortgage on land in accordance with § 491 paragraph 3 no 1. The rate of interest for delay in respect of these contracts is two and a half percentage points per year above the basic rate of interest. In an individual case the lender can prove a higher or the borrower a lower level of loss.
(2) Interest falling due after commencement of delay must be credited to a special account and may not be put into an open account with the sum owed or other demands of the lender. § 289 sentence 2 applies in relation to this interest with the proviso that the lender can demand compensation only to the limit of the statutory rate of interest (§ 246).
(3) Payments by the borrower which do not suffice for the repayment of the total debt due are attributed (contrary to § 367 paragraph 1) first to legal costs, then to the remaining sum owed (paragraph 1), and last to interest (paragraph 2). The lender may not reject instalments. The limitation period for claims to reimbursement of the credit and interest is suspended from the commencement of the delay (in accordance with paragraph 1) onwards to its establishment in a manner described in § 197 paragraph 1 nos 3 to 5, but not for longer than ten years from when it arises. § 197 paragraph 2 does not apply to claims for interest. Sentences 1 to 4 do not apply in so far as payments are made in respect of an execution the chief demand under which is for interest.

§ 498 Complete repayment in respect of instalment credit
(1) The lender can only terminate the consumer credit contract by notice because of delay in payment by the borrower in the case of a credit which is to be paid off in instalments, if

  1. the borrower is in delay with at least two consecutive instalments wholly or partially and at least ten per cent or, with a consumer credit contract period of over three years, with five per cent of the nominal amount of the loan or of the instalment price and
  2. the lender has set the borrower a two-week period for payment of the outstanding amount by a declaration that he demands the total remaining debt on non-payment within the period, but without result.
    The lender is to offer to the borrower, at the latest with the setting of a period, a discussion about the possibilities of a regime based on agreement.

(2) If the lender terminates the consumer credit contract by notice, the remaining debt reduces by the interest and other costs of the credit dependent on the period of the credit which, on an apportioned calculation, are allocated to the period after the notice becomes effective.

Second Sub-title - Financial assistance between an undertaking and a consumer

§ 499 Deferred payment, other financial assistance
(1) The provisions of §§ 358, 359 and 492 paragraphs 1 to 3 and of §§ 494 to 498 apply (subject to paragraphs 2 and 3) correspondingly to contracts by which an undertaking grants to a consumer deferral of payment in return for money of more than three months or other financial assistance in return for money.
(2) For finance leasing contracts and contracts which have as their object the delivery of a certain thing or the carrying out of a certain other service in return for instalments (instalment transactions), the details regulated in §§ 500 to 504 apply, subject to paragraph 3.
(3) The provisions of this subtitle do not apply to the extent determined in § 491 paragraphs 2 and 3. The cash payment price takes the place of the net credit amount mentioned in § 491 paragraph 2 no 1 in respect of an instalment transaction.

§ 500 Finance leasing contracts
Only the provisions of §§ 358, 359, 492 paragraph 1 sentences 1 to 4, § 492 paragraphs 2 an d 3 and § 495 paragraph 1 as well as §§ 496 to 498 apply correspondingly to finance leasing contracts between an undertaking and a consumer.

§ 501 Instalment transactions
Only the provisions of §§ 358, 359, 492 paragraph 1 sentences 1 to 4, § 492 paragraphs 2 and 3, § 495 paragraph 1 as well as §§ 496 to 498 apply correspondingly to instalment transactions between an undertaking and a consumer. In other respects the following provisions apply.

§ 502 Necessary information, legal consequences of defects in form in respect of instalment transactions
(1) The contractual declaration to be signed by the consumer in respect of instalment transactions must give

  1. the cash payment price;
  2. the instalment price (total amount of deposit and all instalments to be paid by the consumer inclusive of interest and other costs);
  3. amount, number and due date of the individual instalments;
  4. the effective annual interest;
  5. the costs of an insurance which is concluded in connection with the instalment transaction;
  6. the agreement for a reservation of property or another security to be lodged.

The giving of a cash payment price and effective annual interest are not needed if the undertaking delivers things or carries out services only in return for instalments.
(2) The requirements of paragraph 1, § 492 paragraph 1 sentences 1 to 4 and § 492 paragraph 3 do not apply for instalment transactions for distance sales, if the information described in paragraph 1 sentence 1 nos 1 to 5, with the exception of the amount of the individual instalments, is communicated to the consumer in text form in sufficient time for him to take cognisance in detail of the information before the conclusion of the contract.
(3) The instalment transaction is void if the written form of § 492 paragraph 1 sentences 1 to 4 is not observed or if one of the items of information prescribed in paragraph 1 sentence 1 nos 1 to 5 is absent. Notwithstanding a defect under sentence 1, the instalment transaction is valid if the thing is handed over to the consumer or the service is carried out. The cash payment price is however to bear interest at the statutory interest rate at the most, if the instalment price or the effective annual interest has not been supplied. If a cash payment price is not mentioned, then in case of doubt the market price applies as cash payment price. The lodging of securities cannot be demanded if no information be given on this subject. If the effective or the original effective annual interest is given at too low a level, the instalment price reduces by the percentage rate by which the effective or the original effective annual interest is understated.

§ 503 Right to return and withdrawal in respect of instalment transactions
(1) Instead of the right of revocation which belongs to the consumer under § 495 paragraph 1, the consumer can be granted a right to return in accordance with § 356.
(2) The undertaking can only withdraw from an instalment transaction because of the consumer’s delay in payment under the prerequisites described in § 498 paragraph 1. The consumer must also reimburse the undertaking for the expenses incurred as a result of the contract. In measuring the reimbursement of benefits from a thing which has to be given back, regard must be had to the diminution in value occurring in the meantime. If the undertaking takes back the thing which was delivered on the basis of the instalment transaction, this counts as the exercise of the right of withdrawal, unless the undertaking agrees with the consumer to reimburse him for the ordinary sale value of the thing at the point in time that it was taken away. Sentence 4 applies correspondingly if a contract for the delivery of a thing is connected with a consumer credit contract (§ 358 paragraph 2) and if the lender appropriates the thing; in the case of withdrawal, the legal relationship between the lender and the consumer is determined in accordance with sentences 2 and 3.

§ 504 Early payment in respect of instalment transactions
If the consumer fulfils his obligations under the instalment transaction early, the instalment price reduces by the interest and other costs dependent on the operative period of the transaction which, on an apportioned calculation, are allocated to the period after the early fulfilment. If a cash payment price is not to be given in accordance with § 502 paragraph 1 sentence 2, the statutory rate of interest (§ 246) is to be taken as a basis. The undertaking can however also demand interest and other costs dependent on the operative period of the transaction for the first nine months of the operative period originally provided for, even if the consumer fulfils his obligations before the expiry of this period.

Third Sub-title - Contracts for delivery by instalments between undertaking and consumer

§ 505 Contracts for delivery by instalments
(1) The consumer is entitled, subject to sentence 2, to a right of revocation in accordance with § 355 in respect of contracts with an undertaking in which the consumer’s declaration of will is directed to the conclusion of a contract which has as its object

  1. the delivery by way of partial performances of several things sold as belonging together and in respect of which the payment for all the things is to be made in instalments, or
  2. the regular delivery of things of the same kind, or
  3. the obligation repeatedly to acquire or to purchase things.

This is inapplicable to the extent determined in § 491 paragraphs 2 and 3. The sum of all the instalments to be paid by the consumer until the earliest possible point in time for termination by notice corresponds to the net credit sum mentioned in § 491 paragraph 2 no 1.
(2) The contract for delivery by instalments under paragraph 1 needs written form. Sentence 1 does not apply if the possibility is created for the consumer to call up the provisions of the contract, inclusive of the general conditions of business, on conclusion of the contract and to store them in a form capable of being reproduced. The undertaking must communicate the content of the contract to the consumer in text form.

Fourth Sub-title - Unalterability, application to new start businesses

§ 506 Divergent agreements
No deviation may be made from the provisions of §§ 491 to 505 to the disadvantage of the consumer. These provisions apply even if they are circumvented by other formulations.

§ 507 Application to new start businesses
§§ 491 to 506 also apply to natural persons who have credit, deferral of payment or other financial assistance granted to them to take up a commercial or independent vocational activity or conclude a contract for delivery by instalments for this purpose, unless the net amount of the credit or cash payment price exceeds 50,000 euros.
[…]

EIGHTH SECTION - Individual obligation relationships

Fourth Title - Gift

§ 516 Concept of gift
(1) A transfer by which someone enriches another out of his assets is a gift if both parties are in agreement that the transfer should occur without payment.
(2) If the transfer occurs without any intention by the other party, the transferor can invite him to declare his acceptance, and set a reasonable period for this. After the expiry of this period, the gift is deemed to be accepted if the other party has not previously refused it. In the case of a refusal, the handing over of what has been transferred can be demanded in accordance with the provisions about the handing over of an unjustified enrichment.
[…]

§ 518 Form for promise of gift
(1) Notarial authentication of the promise is necessary for the validity of a contract by which a performance is promised by way of gift. When a promise of an obligation or an acknowledgement of an obligation of the kind described in §§ 780 and 781 is given by way of gift, the same applies to the promise or declaration of acknowledgement.
(2) The lack of form is cured by the effectuation of the performance promised.
[…]

§ 521 Liability of donor
The donor only has to answer for intention and gross negligence.
[…]

§ 528 Demand for return because of impoverishment of donor
(1) In so far as the donor is not in a position after the completion of the gift to pay for his reasonable maintenance and to fulfil the duty to maintain his relatives, his spouse, his life partner or his former spouse or life partner imposed on him by statute law, he can demand the handing over of the subject matter of the gift from the donee in accordance with the provisions about the handing over of an unjustified enrichment. The donee can avoid the handing over by payment of the sum necessary for the maintenance. The provisions in § 760 and the provisions of § 1613 applying to the duty to maintain relatives, and (in the case of the donor’s death) the provisions of § 1615, apply correspondingly to the donee’s duty.
(2) Amongst several donees, the earlier donee is only liable in so far as the later donee is not under the obligation.
[…]

§ 530 Revocation of gift
(1) A gift can be revoked if the donee is guilty of severe ingratitude by a serious misdemeanour against the donor or a near relative of his.
(2) The donor’s heir only has a right of revocation if the donee has intentionally and unlawfully killed the donor or prevented his revocation.
[…]

Fifth Title - Hiring contract and lease contract

First Sub-title - General provisions for hiring

§ 535 Content and principal duties in hiring contracts
(1) The hirer is obliged by the hiring contract to grant to the hiree the use of the hired object during the hiring period. The hirer must let the hiree have the hired object in a condition appropriate for use in accordance with the contract and maintain it in this condition during the hiring period. He must bear the encumbrances to which the hired object is subject.
(2) The hiree is obliged to pay the hirer the agreed hiring charge.

§ 536 Reduction in hiring charge in case of material and legal defects
(1) If at the time it is made over to the hiree the hired object has a defect which deprives it of its fitness for use in accordance with the contract, or if such a defect arises during the hiring period, the hiree is freed from payment of a hiring charge for the period in which it is deprived of its fitness. For a period during which its fitness is reduced, he only has to pay an appropriately reduced hiring charge. An insignificant reduction in fitness should be left out of consideration.
(2) Paragraph 1 sentences 1 and 2 also apply if a promised characteristic is absent or later ceases to exist.
(3) If the hiree is wholly or partly deprived of use of the hired object in accordance with the contract by the right of a third party, paragraphs 1 and 2 apply correspondingly.
(4) In a hiring relating to residential accommodation, an agreement which diverges to the disadvantage of the hiree is ineffective.

§ 536a Claim by hiree to reimbursement of expenses and loss because of a defect
(1) If a defect in the sense of § 536 is present at the conclusion of the contract or if such a defect arises later because of a circumstance for which the hirer must answer or if the hirer delays in removing a defect, the hiree can demand compensation without prejudice to the rights under § 536.
(2) The hiree can remove the defect himself and demand reimbursement of the necessary expenses if

  1. the hirer is in delay in removing the defect or
  2. the immediate removal of the defect is necessary for the maintenance or restoration of the continued existence of the hired object.

[…]

§ 537 Payment of hiring charge in case of personal hindrance by hiree
(1) The hiree is not released from payment of the hire charge by the fact that he is hindered in the exercise of his right of use for a reason relating to himself personally. The hirer must however permit the value of expenditure saved and of those advantages which he obtains by some other exploitation of the use to be charged against him.
(2) As long as the hirer is not in a position to grant use to the hiree because he has let a third party have such use, the hiree is not obliged to pay the hire charges.
[…]

§ 542 End of hiring
(1) If the hiring period is not determined, any contracting party can terminate the hiring by notice in accordance with the statutory provisions.
(2) A hiring which is entered into for a determined period ends with the expiry of this period in so far as it is not

  1. terminated by extraordinary notice in the cases permitted by statute law, or
  2. extended.

§ 543 Immediate termination by extraordinary notice for substantial reason
(1) Any contracting party can terminate the hiring by extraordinary notice immediately for a substantial reason. A substantial reason is present if the person giving notice cannot reasonably be expected to continue the hiring until the expiry of the notice period or until some other termination of the hiring, having regard to all the circumstances of the individual case, in particular fault of the contracting parties, and balancing the interests of both sides.
(2) A substantial ground is in particular present if

  1. use of the hired object in accordance with the contract is wholly or partly not granted to the hiree punctually or is taken back again,
  2. the hiree violates the rights of the hirer to a substantial degree by substantially endangering the hired object through neglect of the care which he owed or by letting a third party have it without authority, or
  3. the hiree
    a) is in delay with payment of the hire charge, or a not insubstantial part of the hire charge, for two consecutive charge periods, or
    b) in a period which extends over more than two charge periods is in delay with payment of the hire charge by a sum which amounts to the hire charge for two months.

In the case of sentence 1 no 3, termination by notice is excluded if the hirer has previously received satisfaction. It becomes ineffective if the hiree could release himself from his obligation by setting off, and declares the setting off without delay after the termination notice.
(3) If the substantial ground consists in the violation of a duty in the hiring contract, termination by notice is only permissible after the ineffectual expiry of a reasonable period determined for redress or after an ineffectual warning. This does not apply if

  1. a period or warning obviously promises no result,
  2. an immediate termination notice on special grounds is justified, balancing the interests on both sides, or
  3. the hiree is in delay with the payment of the hire charge in the sense of paragraph 2 no 3.

(4) §§ 536b and 536d are to be applied correspondingly to the right of termination by notice belonging to the hiree under paragraph 2 no 1. If there is dispute as to whether the hirer has granted use of the hired object punctually or has effected redress before the expiry of the period determined for this purpose, the burden of proof falls on him.
[…]

Second Sub-title - Hirings of residential accommodation

[…]

§ 550 Form of hiring contract
If a hiring contract for a longer period than a year is concluded otherwise than in written form, it is deemed to be for an indeterminate period. Termination by notice is however permissible at the earliest at the expiry of a year after the handing over of the residential accommodation.
[…]

§ 557 Increase of hire charge under agreement or statute law
(1) During the hiring the parties can agree an increase of the hire charge.
(2) The parties can agree future alterations of the level of the hire charge in steps under § 557a or as index-linked under § 557b.
(3) Otherwise, the hirer can demand increases in the hire charge only in accordance with §§ 558 to 560, in so far as an increase by agreement is not excluded or the exclusion follows from the circumstances.
(4) An agreement which deviates from this to the disadvantage of the hiree is ineffective.
[…]

§ 558 Increase of hire charge to comparable hire charge usual for locality
(1) The hirer can demand consent to an increase of the hire charge up to the comparable hire charges usual for the locality if the hire charge has been unchanged for 15 months at the point in time at which the increase is to take place. The demand for increase in the hire charge can be claimed one year after the last increase in the hire charge at the earliest. Increases under §§ 559 to 560 are not to be taken into account.
(2)-(5) […]
(6) An agreement which deviates from this to the disadvantage of the hiree is ineffective.
[…]

§ 566 Purchase does not override hiring
(1) If the residential accommodation which is hired out is transferred by the hirer to a third party after it has been handed over to the hiree, the transferee takes the place of the hirer in respect of the rights and duties arising from the hiring during the period of his ownership.
(2) If the transferee does not fulfil the duties, the hirer is liable for the harm which the transferee has to make good like a guarantor who has renounced his right to the Vorausklage objection (that there has been no execution against the main debtor). If the hiree is informed of the transmission of ownership by the hirer, the hirer is released from liability if the hiree does not terminate the hiring by notice at the first date at which such termination is permissible.
[…]

§ 568 Form and content of termination notice
(1) Termination of the hiring by notice needs written form.
(2) The hirer must inform the hiree punctually of the possibility, the form and the period for objection in accordance with §§ 574 to 574b.
[…]

Second Sub-chapter - Hirings for indefinite period

§ 573 Ordinary termination notice by hirer
(1) The hirer can only terminate by notice if he has a justified interest in the termination of the hiring. Termination by notice for the purpose of raising the hiring charge is excluded.
(2) A justified interest on the part of the hirer in the termination of the hiring is present in particular if

  1. the hiree has culpably and not insubstantially violated his contractual duties
  2. the hirer needs the accommodation as a residence for himself, members of his family or members of his household or
  3. the hirer would be prevented from an appropriate economic utilisation of the property by the continuation of the hiring, and would thereby suffer substantial disadvantages; the possibility of obtaining a higher hire charge by a further hiring out as residential accommodation remains out of consideration; the hirer can also not rely on the fact that he wants to transfer the hired premises in connection with an intended establishment of residential ownership or one occurring after handing over to the hiree.

(3) The grounds for a justified interest on the part of the hirer are to be given in the written termination notice. Other grounds will only be considered in so far as they have arisen subsequently.
(4) An agreement which deviates from this to the disadvantage of the hiree is ineffective.
[…]

Fourth Sub-title - Lease contract

§ 581 Typical contractual duties in lease contract
(1) The lessor is under a duty in a lease contract to grant to the lessee the use of the leased object and the enjoyment of its products, in so far as they are to be regarded as yield according to the rules of a regular business, during the term of the lease. The lessee is under a duty to pay the agreed rent to the lessor.
(2) The provisions about hiring contracts are to be applied correspondingly to lease contracts (with the exception of land lease contracts), in so far as no other conclusion follows from §§ 582 to 584b.
[…]

Sixth Title - Loan

§ 598 Typical contractual duties in relation to loan
The lender of a thing is under a duty in a loan contract to allow to the borrower the use of the thing without payment.

§ 599 Liability of the lender
The lender only has to answer for intention and gross negligence.

§ 600 Liability for defects
If the lender is deceitfully silent about a defect in law or a fault in the thing loaned, he is under a duty to compensate the borrower for the harm arising from this.
[…]

Seventh Title - Contract for loan of thing

§ 607 Typical contractual duties in contract for loan of thing
(1) By a contract for loan of a thing, the lender is obliged to hand over to the borrower an agreed fungible thing. The borrower is obliged to make payment for the loan and on the due date restitution of things of the same kind, quality, and quantity.
(2) The provisions of this title do not apply to the handing over of money.

§ 608 Notice
(1) If no period is determined for the return of the thing handed over, the due date depends upon the lender or the borrower giving notice to terminate.
(2) A contract for the loan of a thing concluded for an indefinite period can be wholly or partially terminated by notice at any time by the lender or the borrower, in so far as nothing different has been agreed.

§ 609 Payment
The borrower must make payment, at the latest on return of the thing handed over.
[…]

Eighth Title - Service contract

§ 611 Typical contractual duties in service contract
(1) The person who promises services is under a duty by a service contract to perform the services promised and the other party to pay the agreed remuneration.
(2) The object of the service contract can be services of any kind.
[…]

§ 612 Remuneration
(1) Remuneration is deemed to be tacitly agreed if in the circumstances the service should only be expected to be given in return for remuneration.
(2) If the level of the remuneration is not determined, when a rate exists remuneration in accordance with the rate should be regarded as agreed, and when there is no rate the usual remuneration.
(3) In the case of an employment relationship remuneration cannot be agreed for the same work or work of equal value which is smaller because of the sex of the employee than for an employee of the other sex. Agreeing a smaller remuneration will not be justified by the fact that because of the employee’s sex special protective provisions apply. § 611a paragraph 1 sentence 3 is to apply correspondingly.
[…]

§ 618 Duty to take protective measures
(1) The person entitled to the service must so arrange and maintain premises, apparatus or implements which he has to provide for the carrying out of the services and so regulate services which are to be undertaken under his direction or management that the person under the duty is protected against risk to life and health in so far as the nature of the service allows it.
(2) If the person under the duty is taken into the domestic establishment, the person entitled to the service must in respect of living and sleeping accommodation, board and work and recreation time make those facilities and arrangements which are necessary having regard to the health, morality and religion of the person under the duty.
(3) If the person entitled to the service does not fulfil the obligations he owes in respect of the life and health of the person under the duty, the provisions of §§ 842 to 846 applying for torts apply correspondingly to his obligation to provide compensation.
[…]

§ 619a Burden of proof in respect of liability of employee
Contrary to § 280 paragraph 1, the employee must provide compensation to the employer for the harm arising from the violation of a duty under the work relationship only if he is responsible for the breach of duty.

§ 620 Termination of service relationship
(1) The service relationship ends with the expiry of the period for which it is entered into.
(2) If the length of the service relationship is neither determined nor capable of being deduced from the nature or the purpose of the services, each party can terminate the service relationship by notice in accordance with §§ 621 to 623.
(3) The Part Time and Fixed Term Act applies for employment contracts which are concluded for a determined period.
[…]

§ 623 Written form for termination notice
The termination of employment relationships by notice or by a termination contract requires written form to be effective; electronic form is excluded.
[…]

§ 626 Immediate termination by notice on a substantial ground
(1) The service relationship can be terminated by notice by any party on a substantial ground without the observance of a period for the notice, if facts are present on the basis of which it cannot reasonably be expected of the person giving the notice that the service relationship should continue until the expiry of the notice period or until the agreed termination of the service relationship, taking into consideration all the circumstances of the individual case and balancing the interests of both contracting parties.
(2) Notice can only be given within two weeks. The period begins at the point in time at which the person entitled to give notice obtains knowledge of the facts which are crucial for the notice. The person giving notice must on request inform the other party in writing of the ground for the notice without delay.
[…]

Ninth Title - Work contract and similar contracts

First Sub-title - Work contract

§ 631 Typical contractual duties in work contract
(1) The undertaking is obliged by a work contract to produce the work promised and the customer is obliged to pay the agreed remuneration.
(2) The subject matter of a work contract can be the production or alteration of a thing as well as another result to be brought about by work or a service.

§ 632 Remuneration
(1) Remuneration is considered to be tacitly agreed if the production of the work is, in the circumstances, only to be expected in return for remuneration.
(2) If the level of the remuneration is not determined, if a valuation exists remuneration in accordance with the valuation is to be regarded as agreed and in the absence of a valuation the usual remuneration.
(3) In case of doubt an estimate of costs is not to be remunerated.

§ 633 Physical and legal defects
(1) The undertaking must provide the customer with the work free from physical and legal defects.
(2) The work is free from physical defects if it has the agreed composition. In so far as the composition is not agreed, the work is free from physical defects

  1. when it is appropriate for the assumed use under the contract, or otherwise
  2. for the usual use and has a composition which is usual for works of the same kind and which the customer can expect according to the type of work.

It is equivalent to a physical defect if the undertaking produces a different work from that ordered or produces the work in too small a quantity.
(3) The work is free from legal defects if third parties cannot claim any rights against the customer in respect of the work or only those accepted in the contract.

§ 634 Rights of customer in respect of defects
If the work is defective, the customer can, if the prerequisites of the following provisions are present and in so far as no different provision is made

  1. demand subsequent fulfilment under § 635,
  2. demand under § 637 the right to eliminate the defect himself and reimbursement of the necessary expenses,
  3. withdraw from the contract under §§ 636, 323 and 326 paragraph 5 or reduce the reimbursement under § 638 and
  4. demand compensation under §§ 636, 280, 281, 283 and 311a or reimbursement of abortive expenditure under § 284.

§ 634a Limitation of claims in respect of defects
(1) The limitation period for claims described in § 634 nos 1, 2 and 4 expires

  1. subject to no 2, in two years in respect of work the result of which consists in the production, servicing or alteration of a thing or in the carrying out of planning or surveillance services for this,
  2. in five years in respect of a building and work the result of which consists in the carrying out of planning or surveillance services for this, and
  3. in other cases in the ordinary limitation period.

(2) The limitation period begins in the cases of paragraph 1 nos 1 and 2 with the acceptance.
(3) Contrary to paragraph 1 nos 1 and 2 and paragraph 2, the limitation period for the claims is the ordinary limitation period, if the undertaking has deceitfully kept the defect secret. In the case of paragraph 1 no 2 the limitation period does not however commence before the expiry of the period determined there.
(4) § 218 applies for the right of withdrawal described in § 634. The customer can in spite of ineffectiveness of the withdrawal according to § 218 paragraph 1 refuse payment of the reimbursement in so far as he would be entitled to do so on the basis of the withdrawal. If he makes use of this right, the undertaking can withdraw from the contract.
(5) § 218 and paragraph 4 sentence 2 apply correspondingly to the right of reduction described in § 634.

§ 635 Subsequent fulfilment
(1) If the customer demands subsequent fulfilment, the undertaking can according to its choice remove the defect or produce new work.
(2) The undertaking must bear the expenses necessary for the purposes of the subsequent fulfilment, in particular costs of transport, road tolls, work and materials.
(3) The undertaking can refuse subsequent fulfilment notwithstanding § 275 paragraphs 2 and 3 if it is only possible with disproportionate cost.
(4) If the undertaking produces new work, it can demand from the customer the return of the defective work in accordance with §§ 346 to 348.

§ 636 Special provisions for withdrawal and compensation
Except in the cases of §§ 281 paragraph 2 and 323 paragraph 2, the setting of a period is not necessary even if the undertaking refuses subsequent fulfilment in accordance with § 635 paragraph 3 or if subsequent fulfilment has failed or cannot be expected of the customer.

§ 637 Self help
(1) In the case of a defect in the work, the customer can remove the defect himself after the expiry without result of an appropriate period determined by him for subsequent fulfilment, and demand reimbursement of the necessary expenses, unless the undertaking justifiably refuses subsequent fulfilment.
(2) § 323 paragraph 2 applies correspondingly. The determination of a period is not necessary even if subsequent fulfilment has failed or cannot be expected of the customer.
(3) The customer can demand from the undertaking an advance for the expenditure necessary for the removal of the defect.

§ 638 Reduction
(1) Instead of withdrawing, the customer can reduce the reimbursement by a declaration to the undertaking. The ground for exclusion in § 323 paragraph 5 sentence 2 does not apply.
(2) If there are several participants on the customer’s side or on the undertaking’s side, the reduction can only be declared by all or against all.
(3) In a case of reduction, the reimbursement is to be reduced in the ratio in which, at the time of the conclusion of the contract, the value of the work in a defect-free state would have had to the real value. Reduction is, so far as is necessary, to be ascertained by valuation.
(4) If the customer has paid more than the reduced reimbursement, the additional amount is to be reimbursed by the undertaking. § 346 paragraph 1 and § 347 paragraph 1 apply correspondingly.

§ 639 Exclusion of liability
The undertaking cannot refer to an agreement by which the rights of the customer in respect of a defect are excluded or limited in so far as it has deceitfully kept the defect secret or has assumed a guarantee for the composition of the work.

§ 640 Acceptance
(1) The customer is obliged to accept work produced in accordance with the contract in so far as the acceptance is not excluded because of the composition of the work. Acceptance cannot be refused because of insignificant defects. It is equivalent to acceptance if the customer does not accept the work within a reasonable period determined for him by the undertaking even though he is obliged to do so.
(2) If the customer accepts defective work in accordance with paragraph 1 sentence 1 even though he knows of the defect, he only has the rights described in § 634 nos 1 to 3 if on the acceptance he reserves his rights in respect of the defect.

§ 641 When remuneration is due
(1) Remuneration is to be paid on acceptance of the work. If the work is to be accepted in parts and the remuneration is determined for the individual parts, the remuneration is to be made for each part on its acceptance.
(2) - (4) […]
[…]

§ 644 Bearing of risk
(1) The undertaking bears the risk until acceptance of the work. If the client falls into delay in acceptance, the risk passes to him. The undertaking is not responsible for accidental destruction and an accidental deterioration of the material delivered by the client.
(2) If the undertaking dispatches the work at the client’s request to a different place than the place for fulfilment, the provisions of § 447 which apply to purchase apply correspondingly.

§ 645 Responsibility of client
(1) If the work has been destroyed, has deteriorated or has become impracticable before acceptance as a result of a defect in the material delivered by the client or as a result of a direction given by the client for the execution without the contribution of a circumstance for which the undertaking is responsible, the undertaking can demand the part of the payment corresponding to the work performed and refund of the outlay not included in the payment. The same applies if the contract is cancelled in conformity with § 643.
(2) Further liability on the part of the client on the basis of fault remains unaffected.

§ 646 Completion instead of acceptance
If acceptance is excluded because of the composition of the work, completion of the work takes the place of acceptance in the cases of § 634a paragraph 2 and §§ 641, 644 and 645.

§ 647 Undertaking’s right of lien
The undertaking has a right of lien for his demands under the contract in respect of the customer’s moveable things produced or repaired by it if they have come into its possession in connection with the production or for the purpose of the repair.

§ 648 Security mortgage for building undertaking
(1) The undertaking in respect of a building or an individual part of a building can ask for the grant of a security mortgage on the customer’s building site in respect of its demands under the contract. If the work is not yet completed, he can ask for the grant of the security mortgage for a part of the remuneration corresponding to the work performed and for the expenses not included in the remuneration.
(2) The proprietor of a shipyard can ask for the grant of a ship’s mortgage in the customer’s ship or ship under construction in respect of his demands for the construction or the repair of a ship; paragraph 1 sentence 2 applies in accordance with its sense and § 647 does not apply.

§ 648a Skilled building worker security
(1) The undertaking in respect of a building, an external structure or a part of them can ask for a security from the customer for the prior performances to be provided by it, inclusive of the subsidiary claims appertaining to them, by determining for the customer a reasonable period for the provision of the security by a declaration that it will refuse his performance after the expiry of the period. Security can be demanded up to the level of the foreseeable claim for remuneration as it arises from the contract or a subsequent additional order as well as for subsidiary claims; the subsidiary claims are to be fixed at 10 per cent of the claim to remuneration which is to be secured. The security is to be regarded as sufficient even if the provider of the security reserves the right to revoke his promise in the case of a significant worsening of the customer’s financial circumstances with effect for claims for remuneration from the building services which the undertaking has not yet performed at the time of arrival of the revocation declaration.
(2) The security can also be provided by a guarantee or other promise of payment by a credit institute or credit insurer authorised to carry on business in the area of application of this statutory provision. The credit institute or credit insurer may only make payments to the undertaking in so far as the customer recognises the undertaking’s claim to remuneration or has been ordered to pay the remuneration by a provisionally executable judgment and the prerequisites are present under which the execution may be begun.
(3) The undertaking must reimburse the customer for the usual costs of the provision of the security up to a maximum rate of 2 per cent per annum. This does not apply in so far as a security must be maintained because of the customer’s objections to the undertaking’s claim to remuneration and the objections show themselves to be unfounded.
(4) In so far as the undertaking has obtained a security for its claim to remuneration under paragraphs 1 or 2, the claim to the grant of a mortgage security under § 648 paragraph 1 is excluded.
(5) If the customer does not provide the security within the specified period, the rights of the undertaking are determined under §§ 643 and 645 paragraph 1. If the contract accordingly counts as rescinded, the undertaking can also ask for compensation for the harm which it has suffered as a result of having trusted in the validity of the contract. The same applies if the customer terminates the contract in accordance with paragraph 1 at a point in time associated with the demand for the security, unless the notice was not given in order to escape the placing of the security. It is presumed that the harm consists of 5 per cent of the remuneration.
(6) The provisions of paragraphs 1 to 5 do not apply if the customer

  1. is a legal person under public law or a special fund under public law, or
  2. is a natural person and is having the building works carried out for the construction or repair of a single family house, with or without a subsidiary apartment; this does not apply in the case of supervision of a building project by a building supervisor authorised to dispose of the customer’s financial means.

(7) An agreement deviating from the provisions of paragraphs 1 to 5 is ineffective.

§ 649 Customer’s right to give notice
The customer can terminate the contract by notice at any time until the completion of the work. If the customer gives notice, the undertaking is entitled to ask for the agreed remuneration; it must however allow what it saves in expenditure or acquires (or wilfully refrains from acquiring) by other use of his power to work as a result of the cancellation of the contract to be charged against it.

§ 650 Estimate of costs
(1) If an estimate of costs formed the basis of the contract, but without the undertaking taking on a guarantee for the correctness of the estimate, and if it occurs that the work cannot be carried out without a significant exceeding of the estimate, the undertaking only has the claim determined in § 645 paragraph 1 if the customer terminates the contract by notice on this ground.
(2) If such an exceeding of the estimate is to be expected, the undertaking must inform the customer without delay.

§ 651 Application of law of purchase
The provisions about purchase apply to a contract which has as its subject matter the delivery of movable things to be manufactured or to be produced. § 442 paragraph 1 sentence 1 also applies in respect of these contracts if the defect is attributable to the material delivered by the customer. In the case of moveable things to be manufactured or to be produced, in so far as it is a question of things which are not fungible, §§ 642, 643, 645, 649 and 650 are also to be applied with the proviso that the determinative point in time under §§ 446 and 447 takes the place of acceptance.
[…]

Second Sub-title - Travel contract
[…]

§ 651f Compensation
(1) The traveller can, without prejudice to the right of abatement or termination by notice, demand compensation for non-fulfilment unless the defect in the travel is based on a circumstance for which the travel organiser is not responsible.
(2) If the travel is frustrated or substantially impaired, the traveller can also demand an appropriate indemnification in money for holiday time spent fruitlessly.
[…]

Tenth Title - Brokerage contract

Subtitle 2 - Credit negotiation contract

§ 655a Credit negotiation contract between undertaking and consumer
The following provisions apply subject to sentence 2 for a contract under which an undertaking undertakes to negotiate for a consumer a consumer credit contract in return for money or to indicate to him the opportunity to conclude a consumer credit contract. This does not apply to the extent determined in § 491 paragraph 2.

§ 655b Written form
(1) The credit negotiation contract needs to be in written form. In particular, subject to other information duties, the compensation of the credit negotiator must be given in the contract as a percentage of the credit; if the credit negotiator has also agreed compensation with the undertaking, this must also be given. It is not permissible for the contract to be connected with the application for giving of the credit. The credit negotiator must communicate the contents of the contract to the consumer in text form.
(2) A credit negotiation contract which does not satisfy the requirements of paragraph 1 sentences 1 to 3 is void.

§ 655c Compensation
The consumer is only obliged to pay the compensation if, as a result of the negotiation or the indication of the credit negotiator, the credit has been provided to the consumer and a revocation by the consumer under § 355 is no longer possible. In so far as the consumer credit contract facilitates the early redemption of another loan (debt conversion) and this is known to the credit negotiator, a claim only arises to the compensation if the effective annual interest or the original effective annual interest does not increase; in calculating the effective or originally effective annual interest for the loan to be redeemed, possible negotiation costs are left out of consideration.

§ 655d Ancillary payments
The credit negotiator is not permitted to agree a payment for services which are connected with the negotiation of the consumer credit contract or the indication of the opportunity to conclude a consumer credit contract, except the compensation under § 655c sentence 1. It is however possible to agree that the credit negotiator is to be reimbursed for necessary expenses which have actually arisen.

§ 655e Divergent agreements, application to new start businesses
(1) It is not permissible to deviate from the provisions of this subtitle to the disadvantage of the consumer. The provisions of this subtitle apply even if they are circumvented by other formulations.
(2) This subtitle also applies for credit negotiation contracts between an undertaking and a new start business in the sense of § 507.
[…]

Twelfth Title - Mandate and contract for transacting business

First Sub-title - Mandate

§ 662 Typical contractual duties in relation to mandate contract
On the acceptance of a mandate, the delegate commits himself to transact business entrusted to him by the delegator on the delegator’s behalf without payment.
[…]

§ 667 Duty to hand over
The delegate is under a duty to hand over to the delegator everything which he receives for the carrying out of the mandate and which he obtains from transacting the business.
[…]

§ 670 Refund of expenditure
If the delegate, for the purpose of carrying out the mandate, incurs expenditure which in the circumstances he may regard as necessary, the delegator is obliged to refund it.

Second Sub-title - Contract to transact business

§ 675 Transacting business without payment
(1) The provisions of §§ 663, 665 to 670, 672 to 674 and, if the person under the duty has the right to terminate by notice without observing any notice period, the provisions of § 671 paragraph 2 as well apply correspondingly to a service contract or a work contract which has transaction of business as its object, in so far as no different provision is made in this sub-title.
(2) A person who gives advice or a recommendation to another person is, without prejudice to the responsibility arising from a contractual relationship, a tort or another statutory provision, not obliged to compensate for the harm arising from following the advice or the recommendation.
[…]

Thirteenth Title - Conduct of business without mandate

§ 677 Duties of person conducting business
A person who conducts business for another without a mandate from or being otherwise entitled to do so as against him must conduct the business in the manner required by the interest of the person in control of the business, having regard to his actual or presumed will.
[…]

§ 683 Refund of expenditure
If taking over conduct of the business corresponds with the interest and the actual or presumed will of the person in control of the business, the person conducting the business can demand refund of his expenses in the same way as a delegate. In the cases mentioned in § 679 the person conducting the business has this claim even if taking over conduct of the business is in conflict with the intention of the person in control of it.
[…]

Twentieth Title - Guarantee

§ 765 Typical contractual duties in relation to guarantee
(1) In a guarantee contract the guarantor commits himself to the creditor of a third party to be responsible for the fulfilment of the liability of the third party.
(2) The guarantee can also be taken on for a future or a conditional liability.

§ 766 Written form for guarantee declaration
The guarantee declaration must be given in writing for the guarantee contract to be valid. Giving the guarantee declaration in electronic form is excluded. In so far as the guarantor fulfils the main obligation, the defect in form is cured.

§ 767 Scope of guarantee obligation
(1) The existence for the time being of the main obligation is crucial for guarantor’s obligation. This applies in particular if the main obligation is altered by fault or delay on the part of the main debtor. The guarantor’s obligation will not be increased by a legal transaction which the main debtor takes on after the guarantee is taken on.
(2) The guarantor is liable for any costs of a termination notice and legal action which are to be refunded by the main debtor to the creditor.

§ 768 Objections by guarantor
(1) The guarantor can claim any objections which the main debtor has. If the main debtor dies, the guarantor cannot rely on the fact that the heir has only limited liability.
(2) The guarantor does not lose an objection by the main debtor renouncing it.
[…]

§ 774 Statutory transmission of demand
(1) The creditor’s demand against the main debtor transfers to the guarantor in so far as he satisfies the creditor. The transmission cannot be claimed to the creditor’s disadvantage. Objections (Einwendungen) by the main debtor from a legal relationship existing between him and the guarantor remain unaffected.
(2) Co-guarantors are liable to each other only under § 426.
[…]

Twenty-sixth Title - Unjustified enrichment

§ 812 Claim to handing over
(1) A person who obtains something without a legal ground by the performance of another or in some other way at his cost is obliged to hand it over to him. This obligation also exists if the legal ground later disappears or the result intended by the performance according to the content of the legal transaction does not occur.
(2) The recognition of the existence or non-existence of an obligation relationship occurring by way of a contract also counts as a performance.

§ 813 Fulfilment in spite of objection
(1) What is provided (das Geleistete) for the purpose of fulfilment of an obligation can be demanded back even if there was an objection against the claim by which the making of the claim was permanently excluded. The provisions of § 214 paragraph 2 remain unaffected.
(2) If a time-limited obligation is prematurely fulfilled, a demand for its reversal is excluded; refund of interim interest cannot be demanded.

§ 814 Knowledge of absence of obligation
What is provided for the purpose of fulfilment of an obligation cannot be demanded back if the person making the performance knew that he was not obliged to make it or if the performance corresponded to a moral duty or regard to propriety.
[…]

§ 817 Violation of statute law or good morals
If the purpose of a performance was determined in such a way that the recipient has by acceptance violated a statutory prohibition or good morals, the recipient has an obligation of handing over. Demand for return is excluded if the person providing the performance may likewise be charged with such a violation, unless the performance consisted of entering into an obligation; what is provided in fulfilment of such an obligation cannot be demanded back.

§ 818 Scope of claim for enrichment
(1) The duty to hand over extends to the benefits derived as well as to what the recipient obtains on the ground of an acquired right or as compensation for the destruction, damage or removal of the object obtained.
(2) If handing over is not possible because of the nature of what is obtained or if the recipient is on some other ground not in a position to hand over, he must compensate for its value.
(3) The duty to hand over or to compensate for value is excluded in so far as the recipient is no longer enriched.
(4) From the point in time when the case becomes pending the recipient is liable in accordance with the general provisions.

§ 819 Increased liability in case of knowledge and violation of statute law or morals
(1) If the recipient knows of the absence of the legal ground at the time of receipt or if he discovers it later, he is obliged to hand over from the time of receipt or the obtaining of knowledge as if the claim to handing over had become pending at this time.
(2) If the recipient violates a statutory prohibition or good morals by acceptance of the performance, he is under the same obligation from receipt of the performance onwards.
[…]

§ 821 Objection of enrichment
A person who enters into an obligation without legal ground can refuse fulfilment even if the claim to release from the obligation is time barred.

§ 822 Duty of third party to hand over
If the recipient transfers what has been obtained to a third party without payment, the third party is obliged, in so far as the recipient’s duty to hand over the enrichment is excluded as a result, to hand over as if he had received the transfer from the creditor without legal ground.

Twenty-seventh Title - Tort

§ 823 Duty to compensate
(1) A person who deliberately or negligently unlawfully injures the life, body, health, freedom, property or other right of another is obliged to compensate the other for the harm arising from this.
(2) The same duty applies to a person who violates a statutory provision which has as its purpose the protection of another. If, according to the content of the statutory provision, a violation of it is possible even without fault, the duty to compensate will only arise in the case of fault.
[…]

§ 825 Provisions on sexual acts
A person who induces another by deceit, threat or abuse of a relationship of dependency to carry out or suffer sexual acts is obliged to compensate him from the harm arising from this.
[…]

§ 828 Minors; deaf mutes
(1) A person who has not completed the seventh year of his life is not responsible for harm which he inflicts on another.
(2) A person who has completed his seventh but not his tenth year is not responsible for the harm which he inflicts on another in an accident with a motor vehicle, a railway or a hover rail. This does not apply if he has caused the injury deliberately.
(3) A person who has not yet competed his eighteenth year is, in so far as his responsibility is not excluded under paragraphs 1 or 2, not responsible for the harm which he inflicts on another if, on the commission of the action causing the harm, he does not have the necessary intelligence to realise his responsibility.
[…]

§ 831 Liability for work assistants
(1) A person who employs another for work is obliged to compensate for the harm which the other unlawfully inflicts on a third party in carrying out the work. The duty to compensate does not arise if the employer observes the care necessary in the affairs of life in the selection of the person employed and, in so far as he has to provide apparatus or implements or has to supervise the carrying out of the work, in such provision or supervision; or if the harm would still have arisen despite application of this care.
(2) The same responsibility applies to a person who takes over for an employer by contract the control of one of the matters described in paragraph 1 sentence 2.
[…]

§ 839 Liability on violation of official duty
(1) If an official intentionally or negligently violates an official duty which is incumbent on him as against a third party, he must compensate the third party for the harm arising from this. If the official can only be charged with negligence, a claim can only be made against him if the victim cannot obtain compensation in another manner.
(2) If an official violates his official duty by a decision in a legal issue, he is only responsible for the harm arising from this if the violation of duty consists of a criminal act. This provision has no application to a refusal or delay which is contrary to duty in exercise of the office.
(3) The duty to compensate does not arise if the victim has intentionally or negligently refrained from averting the harm by the use of a legal remedy.

§ 839a Liability of court expert
(1) If an expert appointed by the court presents an incorrect opinion intentionally or with gross negligence, he is obliged to compensate for the harm which is incurred by a party to the proceedings through a judicial decision which is based on this opinion.
(2) § 839 paragraph 3 is to be applied correspondingly.
[…]

§ 852 Claim for handing over after expiry of limitation period
If the person obliged to make compensation as a result of a tort has acquired something at the cost of the victim, he is obliged even after expiry of the limitation period for the claim to compensation for the harm which has arisen from a tort to make restitution in accordance with the provisions about handing over an unjustified enrichment. This claim expires ten years after it arises and, without regard to the time when it arises, 30 years from the commission of the act causing the injury or the other event giving rise to the harm.
[…]

THIRD BOOK - LAW OF PROPERTY

SECOND SECTION - General provisions about rights to land

§ 873 Acquisition by agreement and register entry
(1) Agreement of the person entitled and the other party about the coming into existence of the alteration in rights and the entry of the alteration in the Land Register is necessary for transfer of ownership in land, for encumbering land with a right and transfer or encumbering of such a right, in so far as statute law does not provide otherwise.
(2) Before the register entry the parties are only bound to the agreement if the declarations are notarially authenticated, given before the Land Registry Office or handed in at this office, or if the person entitled has handed to the other party a permission for register entry corresponding with the provisions of the Land Register Order.
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§ 892 Public faith in Land Register
(1) The contents of the Land Register are deemed to be correct in favour of the person who acquires a right to land or a right to such a right by a legal transaction, unless an objection to such correctness is entered or the incorrectness is known to the transferee. If the person entitled is restricted in disposing of a right entered in the Land Register in favour of a certain person, the restriction is only effective against the transferee if it is evident from the Land Register or known to the transferee.
(2) If a register entry is necessary for the acquisition of the right, the time of making the application for entry (or, if the agreement necessary under § 873 only comes into existence later, the time of agreement) is crucial for the transferee’s knowledge.
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THIRD SECTION - Ownership

First Title - Content of ownership
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Second Title - Acquisition and loss of ownership in land

§ 925 Conveyance
(1) The agreement of the transferor and the transferee (conveyance) to the transfer of ownership in land which is necessary under § 873 must be declared when both parties are simultaneously present before a competent authority. Any notary is competent for the acceptance of a conveyance, without prejudice to the competence of other authorities. A conveyance can also be declared in a court settlement or in an insolvency plan which is confirmed with legal effect.
(2) A conveyance which takes place subject to a condition or a provision as to time is ineffective.
Third Title
Acquisition and loss of ownership in movable things

First Sub-title - Transfer

§ 929 Agreement and delivery
For the transfer of property in a movable thing it is necessary that the owner delivers the thing to the transferee and both are in agreement that the ownership should pass. If the transferee is in possession of the thing, agreement about the transmission of ownership suffices.
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§ 932 Acquisition in good faith from person not entitled
(1) The transferee becomes the owner by a transfer occurring under § 929 even if the thing does not belong to the transferor, unless he did not act in good faith at the time at which he would acquire ownership under these provisions. However, this applies in the case of § 929 sentence 2 only if the transferee had obtained possession from the transferor.
(2) The transferee is not acting in good faith if he knows that the thing does not belong to the transferor (or his ignorance of this is due to gross negligence).