Concept and Legal Classification of Breach of Duty to Perform
The breach of duty to perform is a term used in German civil law that describes a debtor’s violation of obligations within a contractual relationship in cases of non-performance, defective performance, or improper fulfillment of an owed obligation. It is a central element in the law concerning disruption of performance and forms the foundation for the creditor’s claims to damages, withdrawal, or other secondary rights.
Definition and General Significance
A breach of duty to perform describes the violation of an existing obligation for performance between creditor and debtor. In contrast to mere delay or partial non-performance, a breach of duty to perform constitutes a legally relevant breach of duty, which can trigger the legal consequences defined under German contract law. The precise legal classification is determined by the provisions of the German Civil Code (BGB) as well as supplementary regulations for special contractual relationships.
Types of Breach of Duty to Perform
Non-performance (Disruption of Performance)
Non-performance of the owed obligation is a typical case of breach of duty to perform. This includes, in particular:
- Non-performance: The debtor does not perform the owed obligation at all within the period specified by law or contract.
- Incomplete Performance: The owed performance is only rendered in part, so the contractually owed result is not fully achieved.
Defective Performance (Imperfect Performance)
A defective performance occurs when the debtor does perform, but the performance is not of the agreed quality or quantity. Examples include:
- Defect in the Object (Section 434 BGB): The delivered item does not have the agreed qualities under the contract.
- Legal Defect (Section 435 BGB): The creditor does not receive the unrestricted right to the item.
- Delay (Section 286 BGB): The debtor delays in fulfilling the obligation if performance is not rendered despite maturity and reminder.
Breach of Ancillary Obligations
A breach of ancillary obligations, such as duties to inform, protect, or safeguard, can also constitute a breach of duty to perform. These are explicitly regulated in Section 241 (2) BGB and expand the scope of obligations in a contractual relationship.
Legal Foundations
German Civil Code (BGB)
The central legal foundation for the breach of duty to perform is the German Civil Code. In particular, the provisions of Sections 280 et seq. BGB regulate liability for breach of duty, specify the conditions for a claim for damages, and distinguish between different forms of disruption of performance, such as delay, impossibility, and defective performance.
Section 280 BGB – Damages for Breach of Duty
Section 280 BGB provides the legal basis for the creditor’s claim in the event of a breach of duty. The following requirements must be cumulatively fulfilled:
- Existing contractual relationship
- Breach of an obligation arising from the contractual relationship
- Fault on the part of the debtor
- Damage incurred
Other Relevant Provisions
- Section 281 BGB – Damages in lieu of performance
- Section 282 BGB – Damages in lieu of performance in the event of ancillary obligation breach
- Section 283 BGB – Damages in lieu of performance when obligation is excluded
- Section 286 BGB – Debtor’s delay
- Section 323 BGB – Withdrawal due to non-performance or improper performance
Special Provisions in Commercial and Contract Law
In addition to the BGB, commercial law and certain contract types (such as contracts for work and services, purchase contracts, or tenancy agreements) contain specific rules concerning breach of duty to perform, which deviate from or supplement the general principles.
Legal Consequences of Breach of Duty to Perform
Claims for Damages
In the case of an attributable breach of duty to perform, the creditor may claim damages in accordance with Sections 280 et seq. BGB. The debtor must be at fault for the breach, whereby negligence and intent are generally sufficient.
Damages in Lieu of Performance
In cases of final non-performance or significant defective performance, damages in lieu of performance may be claimed (Section 281 BGB).
Damages in Addition to Performance
In cases of temporary disruptions or minor breaches of duty, damages may be claimed in addition to performance (Section 280 (1) BGB).
Right of Withdrawal
Under certain conditions, the creditor has the right to withdraw from the contract (Section 323 BGB). This requires that a reasonable deadline for performance or subsequent performance has expired unsuccessfully.
Right of Retention
In the event of a breach of duty to perform, the right of retention under Section 273 BGB may apply, particularly if the debtor has not fulfilled their obligation in a reciprocal arrangement.
Reduction
In the case of defective performance, certain contracts, such as purchase agreements (Section 441 BGB) or tenancy agreements, grant the right to reduce the agreed price.
Distinctions and Particularities
Distinction from Duty of Care Violations
Unlike breach of duty to perform, which involves a breach of duty by the debtor, a violation of duties of care normally describes a – usually legally irrelevant – breach of duty by the creditor.
Breach of Duty to Perform and Delay
Not every breach of duty to perform automatically results in delay. Only non-performance despite maturity and reminder or failure to perform an ancillary obligation can fulfill the requirements of delay and trigger the special legal consequences.
Enforcement by Legal Action
Claims arising from a breach of duty to perform are typically enforced by legal action. The creditor bears the burden of pleading and proof for the existence and culpable breach of the obligation.
Practical Significance
Breach of duty to perform is of central importance to all obligations in civil law. It serves as the basis for the most common disputes in contract law and is a key instrument for controlling civil liability.
Literature and Case Law
For further study, standard legal commentaries and textbooks on the law of obligations, as well as relevant decisions by the Federal Court of Justice (BGH), are recommended; these regularly deal with fundamental questions regarding the interpretation and application of breach of duty to perform.
This comprehensive presentation offers a sound overview of the term “breach of duty to perform,” its classification and relevance in German civil law, and the resulting legal consequences for debtor and creditor.
Frequently Asked Questions
What legal options does a creditor have in the event of a breach of duty to perform?
If a debtor fails to meet his obligations arising from a claim, or does so improperly, the creditor has various legal remedies. First, he may declare the debtor in default under Section 286 BGB if the prerequisites are met, often automatically after the expiry of a calendar-specified due date. Due to the default, the creditor is entitled to compensation for any resulting damages and default interest according to Section 288 BGB. Furthermore, under certain circumstances, particularly in reciprocal contracts, the creditor may withdraw from the contract (Section 323 BGB) if performance is not rendered within a set grace period. In addition to withdrawal and damages in lieu of performance, the creditor can assert the outstanding amount in court by means of a dunning or performance claim. If necessary, after judgment and an unsuccessful payment request, enforcement can be initiated. The exact procedure depends on the nature of the claim, the terms of the contract, and the specific circumstances of the case.
What role does a reminder (Mahnung) play in relation to a breach of duty to perform?
The reminder is a central element in relation to breach of duty to perform, particularly regarding the commencement of debtor’s default (Section 286 BGB). As a rule, a reminder is required to put the debtor in default unless there is a calendar-specified obligation to perform or, exceptionally, default arises without a reminder (e.g. clear and final refusal to perform). The reminder is a clear and definite request to the debtor to render the owed performance (e.g. payment). It must be proven to have been received by the debtor for legal consequences such as default damages or default interest to be asserted. In practice, it is advisable to send the reminder in writing by registered mail to be able to prove receipt in case of dispute.
What deadlines must be observed when asserting claims arising from a breach of duty to perform?
Claims arising from a breach of duty to perform are generally subject to the regular limitation period of three years (Section 195 BGB), beginning at the end of the year in which the claim arose and the creditor became aware of the circumstances giving rise to the claim or should, without gross negligence, have become aware of them (Section 199 BGB). However, there are different, sometimes shorter or longer, limitation periods for certain types of claims, e.g. warranty claims under contracts for work and services (two or five years) or restitution claims for the violation of property rights (ten years). It must be noted that the initiation of court proceedings, such as obtaining a default summons or filing a lawsuit, suspends the limitation period (Sections 204 et seq. BGB). Missing a deadline can result in the loss of the claim.
What are the differences between damages in addition to and instead of performance in case of breaches of duty to perform?
In the event of a breach of duty to perform, the law differentiates between damages in addition to performance and damages in lieu of performance. Damages in addition to performance (Section 280 (1) BGB) cover losses resulting from delayed or defective performance, while the creditor still demands the primary performance. By contrast, damages in lieu of performance (Sections 280 (3), 281, 283, 311a BGB) apply when the creditor no longer demands the performance or no longer as originally agreed, and seeks compensation for delay or non-performance. This generally requires that a reasonable grace period for performance has expired unsuccessfully, except in situations where such a period is dispensable (e.g. final refusal to perform, Section 281 (2) BGB).
What requirements does the law place on setting a grace period in the event of a breach of duty to perform?
For withdrawal from contract and for damages in lieu of performance, the law often requires prior unsuccessful setting of a reasonable grace period for performance or subsequent performance (Section 323 (1), Section 281 (1) BGB). The grace period must be communicated to the debtor clearly and explicitly; it must be evident by when the performance is expected and that further legal consequences may arise after expiry of the period. It is not mandatory for the deadline to be set for a specific date; a reasonable grace period depends on the circumstances of the individual case. In exceptional cases (such as clear and final refusal to perform, special urgency, or unreasonableness of performance for the creditor), setting a grace period may be dispensable (Section 323 (2), Section 281 (2) BGB).
How is a claim asserted in court in the event of a breach?
If a creditor wishes to pursue a claim after a breach of duty to perform, he has various legal options available. The simplest and most cost-effective is the dunning procedure (Sections 688-703d ZPO), suitable for clearly quantifiable monetary claims. If the debtor objects or does not pay, a lawsuit must be filed to obtain an enforceable title. In contentious cases, a performance claim must be filed before the competent court from the start. After obtaining an enforceable title (e.g. judgment, enforcement order), enforcement is commenced, for example by attachment or compulsory auction, to recover the claim. The choice of route depends on the situation and the conduct of the debtor.
What is the significance of default interest and in what amount can it be claimed in the event of a breach of duty to perform?
Default interest is a statutory entitlement of the creditor as soon as the debtor falls into default in performing his obligation (mainly payment) (Section 288 BGB). For legal transactions between consumers, the default interest rate is generally 5 percentage points above the base rate (Section 288 (1) BGB). For legal transactions without consumer participation (i.e. between entrepreneurs), it is 9 percentage points above the base rate (Section 288 (2) BGB). In addition to interest, the creditor may also, where applicable, claim flat-rate fees or further default damages. Default interest serves to compensate the creditor for late payment and to create an incentive for timely fulfillment. The rate of default interest is regularly set and published semi-annually by the Bundesbank.
