To Close An Agreement German

According to Paragraph 116 of the InsO, business management contracts (§675 BGB) automatically terminate upon the opening of insolvency proceedings concerning the assets of the insolvent client. The reason for this is that the receiver is the only person authorized to manage the insolvency estate. Consequently, commercial agent contracts, contracts of carriage and commission contracts (no franchise, distribution or freight agreements) are automatically extinguished by the opening of insolvency proceedings on the assets of the payer or shipper. The liquidator of the distributor brought legal action against the supplier for compensation. In its decision, the Bundesgerichtshof argued that the fact that the dealer had purchased new vehicles under retention of title and assigned in advance to the supplier its right to pay the existing purchase price against its customers for precautionary purposes was not sufficient to justify an obligation on the dealer to supply its customers to the supplier. The obligation for the distributor to provide the supplier with the information necessary to assert a claim against customers in the event of delay is not comparable to the obligation to provide the supplier with information about its customers. The supplier does not acquire a complete knowledge of the customers acquired by the distributor. In addition, the distributor is only obliged to provide detailed customer information if he negligently violates his obligations under the guarantee agreement, which lead to circumstances in which the supplier can guarantee the guarantee granted to him. Germany`s neighbors, such as Poland, the Czech Republic and Denmark, have already closed their borders or imposed strict restrictions. Operators may agree on further derogations from the rules laid down in the new Article 104 of the Insolvency Regulation and such agreements shall remain effective in the event of insolvency, provided that they comply with the fundamental principles of the relevant provision of paragraph 104.

The question of whether parties to a sales contract can invoke legal provisions due to the COVID-19 pandemic should be increasingly active for (arbitral) courts in the near future: in particular, legal instruments should be at the forefront in the event of a disruption of the business base provided for in Paragraph 313 BGB. These rules allow for the adaptation of the contract or, in the event of impossibility or unreasonability of such adaptation, the cancellation of the contract if the reciprocal conceptions of the parties on which the agreement was based have changed to such an extent that a party cannot reasonably be compelled to adhere to the treaty as it stands. . . .