Some violations may also result in claims of sensitivity, for example. B if a product damages the buyer`s property. A mere pecuniary loss can only be invoked in tort in certain circumstances. B for example if the violation is classified as a criminal offence (e.g. B fraud). Pecuniary damage may also be claimed in tort if the breach is classified as intentional damage to public policy, but the threshold for such claims is high. In practice, claimants usually focus on contractual claims, as these are easier to identify. In reinsurance, an extraordinary express duty of loyalty which goes beyond the general principle of good faith is not applicable in German law for reinsurance contracts. Footnote 59 However, some authors refer to the reinsurance contract as a gentlemen`s agreement that implicitly requires a “higher level” of good faith. Footnote 60 Some say that “extreme good faith” has not been “fully integrated into business practices applicable to reinsurance” anyway. Note 61 However, one could deduce from this declaration a partial adoption of this principle, that is to say, at least an indirect influence through the adoption of declarations of British law characterised by the principle of good faith. While this general rule is clear, there is a discussion about how to calculate the amount of this financial compensation. As a rule, the buyer or customer will demand the amount required to pay for the respective repairs.
Until recently, they could do this even if they did not intend to carry out these repairs. In a decision in early 2018, however, the BGH decided that this was not an option, at least for construction contracts. Instead, the buyer or principal can only claim the difference in monetary value (i.e. between the value as it is and the value as it would be without the defect). Although there is still no corresponding case law on purchase contracts, there is no discernible reason why they should be treated differently. Even after the conclusion of the insurance contract, the economic transfer of risk by the insurer does not alter the fact that the real risk remains in the sphere of the policyholder and is initially carried out in his person or in his assets. The latter therefore has many barely controllable possibilities of obtaining unjustified advantages which imply the intentional or fraudulent causal link of the insured event or its extent. Footnote 32 This phenomenon is referred to as “moral hazard” or “moral hazard” of the policyholder.
Footnote 33 The persistent lack of information results in specific provisions (at least initially based on good faith) that distinguish the insurance contract from other types of contracts. Consequently, German contract law does not contain a principle of good faith in the sense of an obligation to increase good faith. However, the nature of the contract is decisive for the assessment of specifications in good faith and all contracts of any kind are strongly influenced by the principle of good faith. In German contract law, the principle of good faith according to § 242 BGB remains the point of reference for all types of contracts and obligations. From that finding, it cannot be concluded that the principle of good faith is of the utmost importance in German contract law, in particular in German (re)insurance contract law. The basis for the interpretation of the treaty has also remained largely unchanged over time. However, private international law has been largely determined by its European framework. In this context, in particular in Article 3(3) of the Rome I Regulation, commercial parties are free to choose the substantive law governing their contractual relationship. Finally, the principle of good faith may provide for an additional right to terminate the reinsurance contract for a valid reason. This general directive forms part of German general contract law and is an aspect of the principle of good faith.
An important reason is a significant threat to the performance of the contract, which makes compliance with the contract untenable. Footnote 57 These circumstances may constitute a breach of contract under § 313 BGB – the subsequent provision in turn constitutes a concrete implementation of the principle of good faith. Footnote 58 Carter v. Boehm [1766] 3 Burr 1905 (1909); z.B. printed in Han Y Q/Pynt G [ed.], Carter v Boehm and Vorvertragliche Pflichten im Versicherungsrecht, 2018, p. 11 et seq. The foundations of contract drafting in German law have remained largely unchanged over time, case law has been consolidated, and legal law has undergone only a few reforms. If the argument is accepted, the impossibility releases the defendants from their obligation of performance.
Whether they are liable for damages is another issue and a question of contractual allocation of risk. Claims for damages for financial compensation are not affected by the impossibility exception. In other words, a party should not escape claims for damages by arguing that it has no money unless it is willing to declare bankruptcy. The most basic means is the right to benefit from it. In the case of purchase and works contracts, the buyer or customer must in principle give the seller or contractor the opportunity to remedy the defect. This does not prevent the buyer or customer from demanding compensation for damage caused by the defect, such as property damage. B (for example. B, a defective steam boiler in a power plant that damages nearby piping systems). Z .B.
German law does not require the reinsurer to disclose unknown facts, while UK law (at least pre-contractual) requires the reinsured person to disclose anything that is reasonably reasonable to a prudent businessman; Cannawurf S/Schwepcke A, in Lüer D W/Schwepcke A [Eds.], Rückversicherungsrecht, 2013, § 8, para. 50. The prohibition of unlawful or inconsistent conduct (venire contra factum proprium) is a fundamental principle of general German private law and applies to reinsurance contracts. This has an effect, for example. B on a party`s confidence in the expiry of a limitation period. Footnote 54 In BMT Marine and Offshore Survey Ltd v. Lloyd Werft Bremerhaven GmbH [2011] EWCA 32 (Comm) (January 24, 2011), Simon J. applied German contract interpretation law to an insurance contract. The relevant principles of interpretation in the German system can be found in §§ 133 and 157 BGB on declarations of intent.
These provisions (and their application) are remarkable because they are almost identical to those of the DCFR. The same applies to the important role of the civil judge in the application of the law. It has the right not only to determine the content of standards by recognized methods of interpretation (such as formulation, systematics, telos and history), but also to apply fairness in individual cases. Probably the most important instrument for meeting this demand is the principle of good faith. It serves to prevent the injustice that may result from the mere application of a provision and is a necessary remedy for weaknesses in the law. The parties have a number of remedies in the event of a breach of contract. The basic principle of German contract law is the principle of freedom of contract, which is part of the broader concept of “private autonomy” and is therefore protected by the Basic Law. Freedom of contract means that the parties can generally shape their legal relationships as they see fit. They can choose to sign a contract, and they can choose the content they like (with a few exceptions). In addition to influencing the interpretation of the main and ancillary obligations that are expressly stipulated contractually or provided for by certain legal provisions, § 242 BGB can be used to establish several ancillary obligations of the contracting parties. Footnote 11 Important ancillary obligations arising from the application of the principle of good faith are disclosure obligations and protection obligations. When claiming infringement, claimants must prove (and, if necessary, prove) that a contract exists.
The defendants can then claim that the contract is legally invalid. There are several reasons why this could be the case, including the lack of adequate representation of a party in the conclusion of the contract, the violation of formal requirements or a breach of public order. As a result, limitation periods often end on 31 December. Shorter limitation periods may in some cases result from legal law (e.g.B. buyer`s claims about defective goods: usually two years) or corresponding agreements. Contrary to the principles of European contract law, German law does not prescribe a general minimum limitation period. The insurance contract obliges the insurer to assume the risks of the policyholder and therefore bases its premium calculation on the probabilities of occurrence of these risks. However, the insurer has no specific knowledge of the factors for materializing the risk and would regularly miscalculate the premium or take a risk that it would not have signed if it had been aware of the specific circumstances. Of course, the Applicant footnote 27 on an insurance contract is aware of the facts that are decisive for the insurer`s decision. The corresponding obligations of the applicant to disclose facts relevant to the risk therefore arise from the nature of the insurance or.dem principle of good faith – which also obliges the applicant to make a correct and truthful disclosure.
However, footnote 28 This should not be understood to mean that the standard of good faith expected by reinsurers is less onerous than the UK e.B. . . .