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Case:
BGH NJW 1957, 1105 III. Civil Senate
Date:
08 April 1957
Note:
Translated German Cases and Materials under the direction of Professors P. Schlechtriem, B. Markesinis and S. Lorenz
Translated by:
Mr Tony Weir
Copyright:
Professor B.S. Markesinis

The plaintiff and his father, who had been a customer of the defendant's for some time, had bought six one-eighth tickets in the Twelfth North-West German Class Lottery. The draw in the sixth class began on 1 July, and one of these tickets won DM 24. The defendant so informed the plaintiff on a printed form, crediting him with his winnings and charging him the price of the follow-up ticket which was enclosed. It requested the recipient to return the attached acceptance form by the first post or, in the unexpected event he did not wish to take it, to send the follow-up ticket back on the same day. The plaintiff and his father did nothing. On 19 July the follow-up ticket won 40,300 DM, and the defendant wrote to the plaintiff asking him to return it forthwith since he had not accepted it on 2 July when it was sent to him. On 20 July the father of the plaintiff sent the defendant a letter which he said he had written four days earlier and in which he accepted the follow-up ticket.

The plaintiff now claims its winnings. The two lower courts dismissed the claim. On the plaintiff's appeal those judgments were vacated and the case remanded.

Reasons

I. The court of Appeal was right to hold that no contract could be formed by the plaintiff's declaration of acceptance in his letter of 20 July. It is to acquire a chance of winning that one buys a lottery ticket, but once the ticket has been drawn this chance has gone, and with it the object of the contract. We need not dwell on this point, since even the appellant accepts the Court of Appeal's judgment on it.

II. Nor, according to the Court of Appeal, was there any contract between the parties before the follow-up ticket was drawn: there was no possibility of acceptance under para. 151 BGB, and in the circumstances of the case no implicit declaration of acceptance for the purposes of para. 148 BGB could be inferred from 'the silent retention of the follow-up ticket'. Here the essential question is: when a lottery agent makes such an offer to a customer with whom he has already had dealings, does para. 157 BGB, with its reference to the good faith observed by businessmen, make it right to treat the customer as agreeing to the contract so proposed, although he does nothing whatever? The answer is 'no'.

The interests of the parties speak against treating the customer's silence as agreement. If the customer wants to continue playing, all he need do is send in the printed form of acceptance; this at least he can be expected to do in order to clarify the rights of the parties. The interests of the ticket agent point to the same conclusion. If the customer's inactivity were to be treated as a declaration of acceptance, the agent who received no reply 'by return of post' would immediately find himself bound by a contract which prevented him from disposing of the follow-up ticket elsewhere. This would be intolerable, since the agent whose customer has failed to respond to his proposal or request must in all equity be allowed to make his legal position clear and safe. Of course the agent will often act on the assumption that the customer does agree to his offer, and either retain the ticket for him or, if time presses, play it on his account; but in cases where the agent's reliance is justified, he can be protected without holding that a contract has been formed (negotiorum gestio, negligence of the customer in fresh dealings in an existing relationship).

Most importantly, there is no general business practice (Verkehrssitte) inconsistent with the conclusion we have reached. A general business practice in the sense of para. 157 BGB includes a professional opinion held by all those involved in the business in question (see RGZ 114, 9; 135, 340), but the Court of Appeal has found that there is no unanimity on the effect of a customer's silence when he is invoiced for the price of a follow-up ticket enclosed with a statement of his recent winnings. Nor did the parties to the present litigation believe that there was any such unanimity.

2. Regarding the possible formation of a contract under para. 151 BGB, the Court of Appeal did not consider whether before the follow-up ticket was drawn, any intention to accept was evinced by the plaintiff or his father, the statutory representative with whose consent he played. This was because it believed that no contract could come about by an uncommunicated acceptance under para. 151, seeing that the defendant had not dispensed with the need for communication and that it was not normal practice to regard a declaration of acceptance as superfluous.

So far as the substantive law is concerned, the Court of Appeal was right to hold that the way the defendant conducted his business might imply a waiver (Verzicht) of the need to communicate acceptance, such as para. 151 BGB refers to. Since the form letter, as the Court of Appeal correctly held, does not make it absolutely clear that the customer would not be entitled to take further part in the lottery with the follow-up ticket unless he returned the acceptance form, it is necessary to construe it in the light of paras 133, 157 BGB, and to take into account not only what the defendant wrote but also what he did.

The essential question here is whether the plaintiff could honestly and realistically conclude from the way the defendant had behaved when customers, including his father, had done nothing, that the defendant was content with an uncommunicated acceptance of its offer under para. 151 BGB. When it was considering the two instances put forward by the plaintiff, the Court of Appeal did not ask itself this question, and so went wrong in law.

In a letter which the defendant wrote to the plaintiff's father on 20th March 1953 the defendant had said 'I now realise that you did not receive the follow-up ticket which I sent you and accordingly [emphasis added] I hold your winnings at your disposal.' From this the plaintiff argues that the defendant had treated his offer as accepted despite the absence of any declaration of acceptance, and had charged him the price by setting it off against the winnings he held; indeed, that would have been the end of the matter had the customer not established that he never received the substitute ticket. It is not enough to ask, as the Court of Appeal did, whether there really was a contract under para. 151 in this case. The critical question is whether by his conduct the defendant could have induced the other party to believe that he would hold a contract formed on the failure to return the follow-up ticket.

Then in a letter of 19 March 1954, the defendant stated in terms that since the plaintiff's father had not sent back the follow-up ticket, the defendant had had to assume that he was ready to accept it and play. Whether or not the defendant 'stuck' to this position - which is all that occupied the Court of Appeal - is irrelevant. Here, too, the question is whether, in view of the terms of the 1954 letter and his understanding of the letter of the previous year, the plaintiff, not having made any express declaration of acceptance, could suppose that the defendant, given his particular attitude, might treat his failure to send back the follow-up ticket as implicit acceptance of his offer.

It cannot be said to be futile to evaluate the defendant's conduct from this point of view. If the Court of Appeal concludes, after reviewing the evidence, that the two instances mentioned are simply 'isolated cases', not amounting to any declaration of waiver in the sense of para. 151 BGB, it still has to check the plaintiff's assertion that the defendant had adopted the general position that a contract could be formed under para. 151 BGB; for if that were the defendant's practice and it were generally recognised, his statements to the plaintiff's father would cease to stand on their own, and could be seen as expressing an intention which was to apply in all similar cases.

Whether this is in fact the case is another matter. One must concede to the appellant that the fact that the plaintiff's father sent off the form of acceptance on 20 July does not show that he and the plaintiff had dismissed the possibility of a contract's having come about under para. 151 BGB (para. 286 ZPO). It is not true that the intentions for forming a contract under para. 148 or under para. 151 BGB are mutually exclusive: both possibilities concur, and a person who believes that it is not in law necessary that his declaration of acceptance reach the offeror may nevertheless send such a declaration with the aim of giving formal expression to a contract which in his view is already concluded.

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