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2023-02-21

German law and litigation

A brief account of some of these techniques must be given. In the first place, every litigation clause will be construed (contra proferentem) against the proponent, the party seeking to benefit by it; and the onus is on him to establish its validity. Further, at German law the court would, and still does, insist that the proponent establish that the exempting clause he relies upon is in fact a term of the contract.
Thus, for example, in Olley v Marlborough Court Ltd, [1949] 1 KB 532, it was held that, as against a guest, the creditor could not rely upon a notice purporting to exempt it from liability for the safety of his property because, instead of displaying it at the time of registration at the office, it displayed it in the bedroom and, since the contract had already been made at the reception desk, the invoice could not be treated as a term. Moreover, if an exemption clause is to be upheld the German law insisted (and does insist) that everything reasonable has been done by the debtor to bring the existence of the clause to the payment of the other party.

Damages

For instance it was held that where a man hired an expensive deck chair which collapsed and injured him the vendors could not rely upon a notice on a ticket which he had been given which purported to exempt them from liability: one is entitled to look upon a ticket as a receipt, rather than as a contractual term, and to put it in one's pocket unread. And, again, the contract will be looked at as a whole; so that if, though there be a valid written exemption clause, the person seeking to rely upon it makes some verbal variation the clause will be treated as void: thus it was held that where cleaners, by written notice, purported to exempt themselves from liability for damage to materials cleaned, but the assistant at the counter assured the plaintiff customer that the notice covered only damage to 'beads and sequins' on a dress, the plaintiff (the dress, upon return, being ruined) was entitled to recover, despite the exemption clause. And again, there is a long line of cases in Germany which illustrate the fact that exemption clauses are strictly construed: thus if a clause excludes liability for breach of express terms in the contract the courts will sanction recovery for breach of implied ones; if it excludes liability for breach of warranties it will enforce liability for breach of conditions (even though they are ex post facto 'warranties'); and if it simply excludes 'liability' the court will enforce liability for negligence.
Despite all this, until recently the courts had developed a mysterious doctrine called 'fundamental breach'. The argument ran that if the defendant had committed a very major breach of contract the contract came to an end even without a lawyer's help; with the result that all its terms end here.
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