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Case:
OLG Braunschweig NJW 1976, 570
Date:
31 July 1975
Note:
Translated German Cases and Materials Under the direction of Professors P. Schlechtriem, B. Markesinis and S. Lorenz
Translated by:
Mrs Irene Snook
Copyright:
Professor B.S. Markesinis

The defendant intended to take part in the International Automobile Exhibition to be held in September 1971 in Frankfurt. On 20 January 1971 he asked the plaintiff, a hotel owner, by telephone for 22 beds distributed among rooms containing from one to three beds. The plaintiff confirmed the reservation by letter on the same day.

On 28 January 1971 the defendant asked the plaintiff to cancel the reservations because the exhibition had been cancelled. The plaintiff replied on 13 February 1971 that he would try to let the rooms to other customers, but reserved the right to make a claim if he should be unsuccessful. On 1 November 1971 the plaintiff sent the defendant a bill for 1,000 DM having credited the defendant with 1500 DM in respect of alternative lettings and about 2800 DM for savings of expenditure which he would have incurred if the order had stood.

The District Court allowed the claim. Upon appeal by both parties, the Court of Appeal allowed the claim for approximately 11,000 DM for the following

Reasons

The parties have entered into a contract of accommodation (contract for the reception by an hotel [reference]). The defendant, by a telephone call made on 20 January 1971 offered to conclude this contract (para. 145 BGB). He asked the defendant to "reserve" for a certain period six double rooms at 85 DM each, 3 treble bedrooms at 80 DM each and one single room at 45 DM excluding VAT and breakfast. The offer was so unambiguous that a simple affirmation (acceptance) sufficed to bring about an agreement as to its contents and object. It displayed the essential marks of a contract of accommodation, which is in substance a contract of hire of lodgings [reference] specifying the rooms to be let, the duration of the hire and the rent. The plaintiff accepted this offer unconditionally. The contract of accommodation concluded on 20 January 1971 is not merely an agreement to enter into a contract (Vorvertrag). Such an agreement can only be said to exist if special circumstances indicate that exceptionally the parties wished to bind themselves already before all details of the contract had been settled finally and the corresponding declarations had been made [reference]. In order, therefore, to assume that an agreement to enter into a contract of accommodation exists, certain reasons would have to have been present, why the parties in concluding a contract did not seek to achieve the normal purpose of such an agreement, which is to achieve the contract of accommodation forthwith and without further conditions, but only intended to be bound to enter into such a contract [reference]. No such reasons existed on 20 January 1971. All details necessary for the conclusion of a contract of accommodation were finally settled on that day. In addition, the defendant believed firmly that the International Automobile Exhibition would take place in September. According to his letter of 28 January 1971 the Exhibition was cancelled unexpectedly and at short notice. According to the defendant it could not be imagined that this Fair, which had constituted a well-established part of the schedule of Fairs for many years, should be cancelled in 1971. If thus on 20 January 1971 the situation was clear for both parties, it is to be assumed, following the normal course, that the parties intended to conclude already the substantive contract of accommodation and that they did so [reference]. By binding himself at an early stage and unconditionally, the defendant obtained the desired guarantee that his collaborators were certain of a bed during the Fair at Frankfurt. If someone "reserves" a room in a hotel, he hires it, in common parlance [reference]. Moreover it would be contrary to the interest of the defendant if it were assumed that no unconditional contractual relationship with the plaintiff had come into the existence at that time. An understanding that no contractual obligation should arise immediately and unconditionally but only at the time of the Fair would not have served the interest of the defendant. It would not have been in the plaintiff's interest either, for since his hotel had only eleven beds [six], he could not really take the risk whether in eight months all the reserved ten [six] beds would be taken or not.

The validity of this contract of accommodation is also not affected by a suspensive or a resolutive condition (para. 158 BGB). The defendant does not contend that a condition had been agreed expressly between the parties to the effect that the Fair would take place (suspensive condition) or that it would not (resolutive). It cannot be assumed either that the parties made a tacit agreement to this effect ...

It follows that the defendant bears the risk that the International Automobile Exhibition will not take place and that he cannot use the bedrooms for this occasion. It has not become part of the contract and remained a motive of the defendant. The defendant is also not entitled to give notice for special reasons. No such right can be derived from the principles concerning the failure of the basis of a transaction. However, even if the motives of the defendant are not part of the contract, they may nevertheless have become a basis of the contract [reference]. The basis of a contract also includes those circumstances which moved one party only, provided that the other party realises that his opposite number was induced to conclude the contract by these notions [reference]. However, circumstances which fall into the sphere of risk of one or the other of the contracting parties cannot ever be the objects forming the basis of a transaction. The function of para. 242 BGB is not to eliminate the distribution of risks laid down by the contract [references]. If these principles are followed, it cannot have been a basis of the contract of accommodation that the International Automobile Exhibition will take place. Moreover it is only possible to rely exceptionally on the argument that the basis of the transaction has disappeared and that the plaintiff cannot claim to enforce his right under the contract (para. 242 BGB) in face of the principle that contracts must be honoured. It is only possible if the defendant can no longer be expected, having regard to the situation, to perform the contract entirely or in part because its basis has disappeared [reference]. If, as a result of an unforeseen development, the debtor is forced to make very considerable material sacrifices, it cannot be said that this act alone excuses him from performing [references]. Nor has the defendant alleged that such circumstances exist. The fact that the purpose connected with the contract of accommodation had disappeared (erection of a stand at the Fair, advertising, gaining customers) may cause the defendant a perceptible loss is not, however, a result which is altogether incompatible with law and justice.

The defendant has not either been absolved from paying by a generally binding practice (para. 157 BGB) [references]. It need not be decided here whether such a practice exists which is in fact observed in dealings of the hotel industry in Frankfurt - the plaintiff runs only a small business. In the present case it cannot lead to a dissolution of the contract of accommodation since there is no occasion for a supplementary interpretation of the contract. It is only possible to interpret a contract according to good faith having regard to general practice if the transaction to be interpreted contains a gap which is capable of being interpreted [references]. The aim of this requirement is to avoid that by a misuse of a supplementary interpretation based on general considerations of equity the courts modify or extend a transaction [references].

It is true that at the time when they concluded the contract of accommodation, the parties did not state expressly whether the defendant was to be allowed unilaterally to withdraw from the contract shortly after it had been concluded without any obligation to pay. It is not, however, permissible to fill in a gap by supplementary interpretation, if legal provisions exist which were enacted with this problem in mind [references]. The relevant provisions in this connection are those concerning the right of a tenant to give notice. They supplement the argument of the parties to the effect that the defendant cannot withdraw from the contract in the manner chosen by him. The defendant has neither an ordinary nor an exceptional right to give notice.

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