The defendant is an attorney who represented the plaintiff's father in divorce proceedings. In January 1972 the plaintiff's father and mother met in the defendant's office, where they signed a divorce agreement drawn up by the defendant. It contained the following clause: 'para. 6. As to the house, the parties agree that the half belonging to Mrs. M is to be transferred to the three children in equal parts. Mr. M hereby agrees not to sell his half but to transfer it to his present legitimate children. An appropriate notarial contract to this effect is to be concluded immediately after the divorce is final. Mr. M further promises that once the divorce is final he will indemnify Mrs. M against any liabilities arising from the house or its construction ...' A divorce decree was granted in February 1972, and the defendant, in the name of the plaintiff's father, thereupon waived any rights of appeal, as did the mother's attorney. The plaintiff's mother now refuses to transfer her interest in the property to the plaintiff and his siblings.
The plaintiff claims damages for breach of the defendant's duty as attorney. The Landgericht rejected the claim but the Oberlandesgericht allowed it. The defendant was permitted to appeal, but his appeal was dismissed.
[The reasoning of the Court of Appeal].
Despite the appellant's contentions, this reasoning is sound in law.
1. [The defendant was in breach of his duty as attorney].
2. Nor is there anything wrong in law with the Court of Appeal's holding that although there was no contract between the plaintiff and the defendant, the plaintiff could sue the defendant for damages for his faulty breach of contract.
(a) The Court of Appeal found that there was here a contract with protective effect for third parties and that the plaintiff's claim arose therefrom. We do not have to decide whether this is so.
(aa) Certainly an important factor pointing in that direction is that the plaintiff was the son of the attorney's client and was entitled to care and protection from him (compare BGHZ 61, 227, 233). The usual problem in cases of contracts with protective effects for third parties is whether the victim was someone the debtor could expect to be harmed by a breach of the contract. That is not the problem here. The very words of para. 6 of the divorce agreement drawn up by the defendant show that the children were its sole beneficiaries, the only people apt to suffer if the agreement proved invalid.
The only question here is how far the protective effect of this contract works in favour of the children, in particular whether they have any claim for damages for breach of contract in their own right. Now the contract between client and attorney is such, given its nature and structure, that it can only be very seldom, whether one interprets the contract extensively or invokes para. 242 BGB (see BGHZ 56, 269, 273; NJW 1975, 977), that the duties it generates can be sued on by third parties, for the fiduciary relationship between client and attorney makes it strongly bilateral and self-contained (references omitted). Thus the fact that third parties have an interest in what an attorney does will not normally lead to any extension of his liability, even if those persons are named or known to him. However, an exception must be made where a contract drafted by the attorney is designed to vest rights in third parties specified therein, especially third parties who, as in the present case, are represented by the client. It is true that most of the cases where the courts have granted third parties a claim for damages arising out of a contract to which they were not parties have involved personal injury or property damage and its consequences (BGHZ 49, 350, 355; NJW 1955, 257; other references omitted), but it is not impossible for a third party to have a personal claim for economic loss caused by breach of subsidiary contractual duties (NJW 1968, 1929; BGH NJW 1975, 344). In drawing the line here one must certainly apply an especially stringent test: the circle of persons to whom the protective effect of a contract extends is to be narrowly drawn, so as to avoid blurring the line between contractual and tortious liability in an unacceptable manner (BGHZ 66, 51, 57; NJW 1974, 1189). It must always be borne in mind, in claims for purely economic loss, that the debtor is not to be made liable for the mere ricochet effect of his conduct on third parties.
(bb) Despite this, we cannot, on the special facts of the present case, fault the Court of Appeal's holding that the plaintiff was drawn into the protective ambit of the attorney's contract. The respondent invokes a decision of this court of 6 July 1965 (NJW 1965, 1955), but this is not quite in point. The court there did allow the daughter of a client to sue the attorney although she was not herself a party to the contract, but the court was reluctant to categorise the contract as one with protective effect for third parties (references omitted). Contracts with protective effect for third parties are concerned with breach of subsidiary duties by the contractor (see BGH NJW 1975, 344), whereas in that case the question was really whether the attorney could be made liable towards the client's daughter, the third party, for a breach of specific duties of performance (reference omitted). Our case is clearly distinguishable.
(b) The plaintiff might also base his claim here on the concept of Drittschadensliquidation, a doctrine which borders on, if it does not actually overlap, the area of application of the doctrine of contracts with protective effect for third parties (see BGHZ 49, 350, 355). It would have been quite proper for the defendant's client to indemnify his son, the plaintiff, for the harm he had suffered, and one could then infer from the fact that he brought suit as his son's statutory representative that he was making an assignment of his own claim which the plaintiff, on the threshold of majority, could implicitly accept. But we need not pursue the matter here.
(c) In whatever legal or doctrinal category one puts the present litigated facts, the result must be that the plaintiff has a direct claim against the defendant attorney for compensation for the harm which he suffered as a result of the defendant's failure to tell his father of the need to implement the agreement in para. 6 of the divorce document. Any other conclusion would be inconsistent with the meaning and purpose of the attorney's contract here and of the father-son relationship between the client and the plaintiff of which the defendant was well aware.
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