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The German Civil Code
(Bürgerliches Gesetzbuch)

Excerpt from Forrester, Goren & Ilgen: The German Civil Code
Attention: Some §§ may have been amended meanwhile, as the quoted book is from 1975.
This excerpt is only for educational purpose.

Content:

BOOK ONE-GENERAL PART §§1-240

Section I: Persons §§1-89

Title 1:Natural Persons §§ 1-12
Title 2: Juristic Persons §§21-89
I. Associations §§ 21-79
1. General Provisions §§21-54
2. Registered Associations §§55-79
II. Foundations §§80-88
III. Juristic Persons §§89

Section II: Things §§90-103

Section III: Legal Transadions §§104-185
Title 1: Competency to Enter Legal Transactions §§104-115
Title 2: Declaration of Intention §§116-144
Title 3: Contract §§145-157
Title 4: Condition. Fixing of Time §§158-163
Title 5: Agency. Power of Attorney §§164-181
Title 6: Approval. Ratification §§182-185

Section IV: Periods of Time. Time Limits §§186-193

Section V: Prescription §§194-225

Section VI: Exercise of Rights. Self-Defense. Self-Help §§226-231

Section VII: Giving of Security §§232-240

PARTICULAR PART:

BOOK TWO–LAW OF OBLIGATIONS §§241-853

Section I: Content of Obligations §§241-304
Title 1: Obligation to Perform §§241-292
Title 2: Default of the Creditor §§293-304

Section II: Contractual Obligations §§305-361
Title 1: Creation, Content of Contract §§305-319

Title 2: Mutual Contract §§320-327
Title 3: Promise of Performance for the Benefit of a Third Party §§328-335
Title 4: Earnest. Contractual Penalties §§336-345
Title 5: Rescission §§346-361

Section III: Extinction of Obligations §§ 362-397
Title 1: Fulfilment §§362-371
Title 2: Deposit §§372-386
Title 3: Set-off §§387-396
Title 4: Release §§397

Section IV: Assign ment of Claims §§398-413

Section V: Assumption of Debt §§414-419

Section VI: Plurality of De btors and Creditors §§420-432

Section VII: Particular Obligations §§433-853
Title 1 : Sale Exchange §§433-515
I. General Provisions §§433-458
II. Warranty against Defects in the Goods §§459-493
III. Particular Kinds of Sale §§494-514
1. Sale by Sample. Sale on Approval §§494-496
2. Repurchase §§497-503
3. Pre-emption §§504-514
IV. Exchange §§515
Title 2: Gift §§516-534
Title 3: Lease, Usufructuary Lease §§535-597
I. Lease §§535-580a
II. Usufructuary Lease §§581-597
Title 4: Gratuitous Loan for Use §§598-606
Title 5: Loan §§607-610
Title 6: Contract of Service §§611-630
Title 7: Contractfor Work §§631-651
Title 8: Broker’s Contract §§652-656
Title 9: Reward §§657-661
Title 10: Mandate §§662-676
Title 11 : Management without mandate §§677-687
Title 12: Deposit §§688-700
Title 13: Delivery of Things to Innkeepers §§701-704
Title 14: Partnership §§705-740
Title 15: Joint Ownership §§741-758
Title 16: Annuity §§759-761
Title 17: Gaming. Betting §§762-764
Title 18: Guaranty §§765-778
Title 19: Compromise §§779
Title 20: Promise of Debt. Ac knowledgement of Debt §§780-782
Title 21: Order §§783-792
Title 22: Bearer Bonds §§793-808a
Title 23: Production of Things §§809-811
Title 24: Unjust Enrichment §§812-822
Title 25: Delicts (Tort) §§823-853

BOOK THREE-LAW OF PROPERTY §§854-1296

Section I: Possession §§854-872

Section II: General Provisions Regarding Rights over Land §§873-902

Section III: Ownership §§903-1011
Title 1: Substance of Ownership §§903-924
Title 2: Acquisition and Loss of Ownership of Land §§925-928
Title 3: Acquisition and Loss of Owne rship of Moveable Property §§929-984
I. Transfer §§929-936
II. Usucaption §§937-945
III. Connection, Mingling, Processing §§946-952
IV. Acquisition of Products and other Components of a Thing §§953-957
V. Appropriation §§958-964
VI. Finding §§965-984
Title 4: Claims arising out of Ownership §§985-1007
Title 5: Co-ownership §§1008-1011

Section IV: Hereditary Building Rights §§1012-1017

Section V: Servitudes §§1018-1093
Title 1: Real Servitudes §§1018-1029
Title 2: Usufruct §§1030-1089
I. Usufruct in Things §§1030-1067
II. Usufructin Rights §§1068-1084
III. Usufructin Personal Wealth §§1085-1089
Title 3: Restricted Personal Servitudes §§1090-1093

Section VI: Right of Preemption §§1094-1104

Section VII: Realty Charges §§1105-1112

Section VIII: Mortgage. Land Ch arge, Annuity Charge §§1113-1203
Title 1: Mortgage §§1113-1190
Title 2: Land Charge. Annuity Charge §§1191-1203
I. Land Charge §§1191-1198
II. Annuity Charge §§1199-1203

Section IX: Rights of Pledge on mov eable Things and on Rights §§1204-1296
Title 1 : Right of Pledge on moveable Things §§1204-1258
Title 2: Right of Pledge on Rights §§1273-1296

BOOK FOUR-FAMILY LAW §§1297-1921

Section I: Civil Marriage §§1297-1588
Title 1: Engagement §§1297-1302
Title 2: Entry into Marriage §§1303-1322 [Repealed] Title 3: Voidness and Voidability of Marriage §§1323-1347 [Repealed] Title 4: Remarriage in Case of Declaration of Death §§1348-1352

Title 5: effects of Marriage in General §§ 1353-1362
Title 6: Marital Property Rights §§1363-1563
I. Statutory Property Rights §§1363-1390
II. Contractual Property Rights §§1408-1518
1. General Provisions §§1408-1413
2. Separation of Property §§1414
3. Community of Property §§1415-1518
a) General Provisions §§1415-1421
b) Management of the Common Property by the Husband or the Wife §§1422-1449
c) Joint Management of the Common Property by the Spouses §§1450-1470
d) Division of Common Property §§1471-1482
e) Continuation of Community of Property §§1483-1518
III. Register of Marital Property §§1558-1563
Title 7: Divorce §§1564-1587
Title 8: Religious Obligations §1588

Section II: Relationship §§1589-1772
Title 1 : General Provisions §§1589, 1590
Title 2: Descent §§1591-1600
I. Legitimate Descent §§1591-1600
II. Illegitimate Descent §§1600a-16000
Title 3: Duty of Maintenance §§1601-16150
I. General Provisions §§1601-1615
II. Special Provisions for the illegitimate Child and its Mother
Title 4: Legal relationship between Pa rents and Child in general §§1616-1625
Title 5: Parental Authority over legitimate Children §§1626-1698b
Title 6: Parentaf Authority over illegitimate Children §§1705-1712
Title 7: Legitimation of illegitimate Children §§1719-1740g
I. Legitimation by subsequent Marriage §§1719-1722
II. Declaration of Legitimacy on Father’s Application §§1723-1739
III. Declaration of Legitimacy on Child’s Application §§1740a-1740g
Title 8: Adoption of a Child §§1741-1772

Section III: Care §§1773-1921
Title 1 : Care of Minors §§1773-1895
I. Establishment of Care §§1773-1792 II. Conduct of the Care §§1793-1836
III. Care and Supervision of the Guardianship Court §§1837-1848
IV. Cooperation of the Youth Welfare Office §§1849-1851a
V. Exempted Guardianship §§1851-1857a VI. Family Council §§1858-1881
VII. Termination of Guardianship §§1882-1895
Title 2: Care over Persons of full Age §§1896-1908
Title 3: Curatorship §§1909-1921

BOOK FIVE-LAW OF SUCCESSION §§1922-2385

Section I: Order of Succession §§1922-1941

Section II: Legal Status of the Heir §§1942-2063
Title 1 : Acceptance and Disclaimer of the Inheritance. Supervision of the Probate Court §§1942-
1966
Title 2: Liability of an Heir for the Obligations of the Estate §§1967-2017 . . 310
I. Obligations of the Estate §§1967-1969

II. Public Notice to the Creditors of an Estate §§1970-1974
III. Limitation of the Liability of the Heir §§1975-1992
IV. Filing of an Inventory §§1993-2013
V. Pleas for Postponement §§2014-2017
Title 3: Claim to the Inheritance §§2018-2031
Title 4: Plurality of Heirs §§2032-2063
I. Legal Relationship as between the Heirs §§2032-2057a
II. Legal Relationship between Heirs and Creditors of the Esta te §§2058-2063 Section
III: Wills §§2064-2063
Title 1: General Provisions §§2064-2086
Title 2: Appointment of Heirs §§2087-2099
Title 3: Appointment of a Reversionary Heir §§2100-2146
Title 4: Legacies §§2147-2191
Title 5: Testamentary Burdens §§2192-2196
Title 6: Executors §§2197-2228
Title 7: The tvlaking and Revocation of a Will §§2229-2264
Title 8: loint Will §§2265-2273

Section IV: Contract of Inheritance §§2274-2302

Section V: Compulsory Portion §§2303-2338a

Section VI: Unworthine ss to Inherit §§2339-2345

Section VII: Renunciation of Inheritance §§2346-2352

Section VIII: Certificate of Inheritance §§2353-2370

Section IX: Purchase of an Inheritance §§2371-2385

The statutes:

§ 1. [Beginning of legal capacity] The legal cap acity of a human being begins with the
completion of birth.

§ 2. (Attainment of major ity] Majority is attained upon the co mpletion of the eighteenth year of
age.

§ 104. [Incompetency to enter into legal transactions] A person is incompetent to enter into legal
transactions:
1. who has not completed his seventh year of age;
2. who suffers from a mental disturbance preven ting the free exercise of his will, unless the
condition is temporary in nature;
3. who has been declared incapable because of mental illness.

§ 105. [Nullity of declaration of intention] (1) A declaration of intention made by an incompetent person is void.
(2) A declaration of intention which is made in a condition of unconsciousness or temporarv,
insanity is also void.

§ 106. [Limited competency of minors] A minor who has completed his seventh year of age is
limited in competency to enter legal transacti ons according to the provisions of §§ 107 to 113.

§ 107. [Consent of legal representative] A minor requires, for a declaration of intention whereby
he does not merely acquire a legal benefit, the consent of his legal representative.

§ 108. [Contracting without consent] (1) If the minor concludes a contract without th e necessary consent of his legal representative,
the validity of the contract depends on the consent of the legal representative.
(2) If the other party requests the legal representa tive to declare his approval the declaration can
be made only to the other party; a declaration or refusal of approval to the minor before the
request is of no effect. The approval can be given only up to the expiration of two weeks
following the receipt of the request; if it is not given it is deemed to have been refused.
(3) If the minor has become unlimited in comp etency to enter legal transactions, his own
approval takes the place of the a pproval of the representative.

§ 109. [Right of revocation by the other party] (1) Before approval is given to the contract the other party is entitled to revoke. Revocation may
also be declared to the minor.
(2) If the other party had notice of the minorit y, he may revoke only if the minor had declared,
falsely, that he had the approval of his representative; even in this case he may not revoke if he
knew, at the time the contract was entered in to, that the approval had not been given.

§ 110. [“Pocket money contracts”] A contract entered into by a minor without the consent of his
legal representative is deemed to be valid from the outset if the minor has performed his part
with means given to him, for this purpose or for his free disposal, by the re presentative or, with
the latter’s consent, by a third party. § 111. [Unilateral legal tr ansactions] A unilateral legal
transaction which the minor enters into without the necessary consent of the legal representative
is ineffective. If the minor enters into such a legal transaction with another party with this
consent, the legal transaction is ineffective if the minor does not produce the consent in writing,
and the other party without delay re jects the legal transaction for thi~ reascn. The right to reject
is barred if the representative had made the other party aware of the consent.

§ 112. [Independent conduct of a business] (1) If the legal representative, with the approval of the guardianship Court, authorizes the minor
to carry on a gainful occupation independently, th e minor is then unlimited in competency to
enter into such legal transactions as are within the scope of the enterprise. Transactions for which
the representative needs the approval of the guardianship Court are not included.
(2) The authorization may be revoked by the legal representative only with the approval of the
guardianship Court.

§ 113. [Entering service or employmentj
(1) If the legal representative authorizes the minor to enter service or employment, the minor is
then unlimited in competency to enter into such legal transactions as relate to the entry into or
the termination of the relationship of service or employment of the kind authorized, or to the
performance of the obligations ar ising from such a relationship. Transactions for which the legal
representative needs the approval of the guardianshi p Court are not included.
(2) The authorization may be recalled or limited by the representative.
(3) If the legal representative is a guardian the authorization may, if refused by him, be
substituted bythe guardianship Courton the app lication of the minor. The guardianship Court
shall substitute such authorization if it is in the interest of the ward.

(4) An authorization given for a particular case is deemed, in case of doubt, to be a general
authorization for entering into relationships of the same kind.

SECOND TITLE
Declaration of Intention
§ 116. [Mental reservation) A declar ation of intention is not void by reason of the fact that the
declarant has made a mental reservation of not being in favor of the declaration made. The
declaration is void ü made to a pers on who is aware of the reservation.

§ 117. [Sham transaction] (1) If a declaration of intention required to be made to a person is, with his knowledge, made
only in pretence, it is void.
(2) If one legal transaction is hidden b,v a sham transaction, the provisions applicable to the
hidden legal transaction apply.

§ 118. [Lack of seriousness] A declaration of inte ntion not seriously intendec which is made in
the expectation that it will be understood not to be seriously intended, is void.

§ 119. [Rescission due to error] (1) A person who, when making a declaration of intent ion, is in error as to its content, or did not
intend to make a declaration of such content at all, may rescind the declaration if it may be
assumed that he would not have made it with knowledge of the facts and with reasonable
appreciation of the situation.
(2) An error as to the content of the declaration is regarded in the same way as an error as to
those characteristics of a pers on or thing which are regarded in business as essential.

§ 120. [Rescission because of incorr ect transmission] A declaration of intention which has been
incorrectly transmitted by the person or in stitution employed for its transmission may be
rescinded under the same condition as a declaratio n of intention made in error as provided for by
§ 119.

BOOK 1: § 121-126
§ 121. [Period for rescission] (1) The rescission must be made, in cases provided for by §§ 119, 120, without ulpable delay
(immediately) after the person entitled to re scind has gained knowedge of the grounds for
rescission. A rescission as against a person who is not present is deem ed to have been effected in
due time if the rescission has been
orwarded immediately. (2) Rescission is barred leclaration of intention.
if thirty years have expired since the making of the

§ 122. [Rescinding party’s obligation to compensate] (1) If a declaration of irten tion is void under § 118, or resc inded under §§ 119, 20, the declarant
shall, if the declaration was re quired to be made to anotherparty, ompensate that party, or
otherwise any third party, for the damage whic h the other or the third party has sustained by
relying u pon the validity of the declaration iot, however, beyond the value of the interest.which
the other or the third party ias in the validitv of the declaration.
(2) The obligation to compensate does not arise if the injured party knew the ;round of the nullity
or rescission or did not know it due to negligence (should iave known it).

123. [Rescission on grounds of fraud or threats] (1) Whoever has been induced to make a declaration of intention bv fraud or nlawfully by threats
may rescind the declaration.
(2) If a third party was gu ilty ot the fraud, a declaration which was requi red to be ~ade to
another person may be rescinded onlv if the latter knew or should have nown of the fraud.
Insofar as a person other than the one to whom the declaration ~as required to be made has
acquired a right directly through the declaration, the eclaration may be rescinded as against him
if he knew or should have known of ie fraud.

124. [Period for rescission] (1) The rescission of a declarati on of intention rescindable under § 123 may take lace only within
the period of one year.
(2) The period begins to run, in th e case of Fraud, from the moment at which the erson entitled to
rescind discovers the fraud, and in case of threat s, from the ioment at which the duress ceases.
The provisions of § 203(2) and of §§ 206, 207, appli cable to prescription, applymutatis mutandis
to the running of this period. (3) The rescission is barred if thirty years have expired since the
making of the. eclaration of intention.

125. [Nullity due to defect in formJ A legal transaction which is not in the form rescribed by law
is void. Lack of the form required by legal tran saction results also, case of doubt, in nullity.

126. [Requirement of writing] (1) If writing is prescribed by law the document must besigned by the maker in his own hand by
signature of his name, or by his mark notarially authenticated.
(2) In the case of a contract the signatures of the parties must be made on the same document. If
several counterparts of the contract are draw n up, it is sufficient if each party signs the copy
intended for the other party.
(3) A notarial record may be substituted for writing..

§ 127. [Optional form] The provisions of § 126 appl y also, in case of doubt, to writing required
by legal transaction. It is suffici ent, however, for compliance with the form, unless a contrary
intention is to be presumed, if it is by telegra phic transmission and, in the case of a contract, by
exchange of letters; if such a form is selected, authentication in accordance with § 126 may be
subsequently demanded.

§ 127a. [Substitution for notarial authentication] In the case of a court settlement, the recording
of the declarations in a protocol drawn up accord ing to the provisions of the Code of Civil
Procedure, will substitute for notarial authentication.

§ 128. [Notarial authentication] If notarial authentication of a contract is pr escribed by law, it is
sufficient if fi rst the offer and later the accep tance of the offer be authenticated by a notary.

§ 129. [Official certification] (1) If it is prescribed by law that a declaration shall be officially certified, the declaration must be
drawn up in writing, and the signatur e of the declarant be certified bya notary. Ifthe declaratiori
is subscribed bythe makerwith his mark, the certi fication of the mark descri6ed in § 126(1) is
necessary and sufficient.
(2) Notarial authentication of the declaration may be substituted for th e public certification.

§ 130. [Effectiveness of declaration as against partyJ

(1) A declaration of intention required to be made to another, if made in his absence, becomes
effective at the moment when it reaches him. It does not become effective if a revocation reaches
him previously or simultaneously.
(2) The effectiveness of the declaration is not a ffected by the fact that the declarant dies or
becomes incompetent to enter into le ga) transactions after making them.
(3) These provisions apply even if the declaration of intention is required to be made to a public
authority.

§ 131. {Effectiveness as against a not fully competent party] (1) If a declaration of intention is made to a person incomp etent to enter legal transactions, it
does not become effective until it reaches his legal representative. (2) The same applies if the
declaration of intention is made to a person limited
in competency to enter legal transactions. If, however, the declaration merely brings a legal
advantage to the person of limited competency, or if the legal representative has given his
approval, the declaration becomes effective at the moment when it reaches the person of limited
competency.

§ 132. [Substitution for deliveryJ
(1) A declaration of intention is also deemed to have become effective if it has been delivered
through the use of a bailiff. The delivery is made in accordance with the provisions of the Code
of Civil Procedure.
(2) If the declarant, not becau se of negligence, does not know the person to whom the
declaration must be made, or if the whereabouts of this person is unknown .the delivery may be
effected in accordance with th e provisions of the Code of Civ il Procedure relatingto the public
service of a summons. In the form er situation the District Court competent to grant approval is
the one in whose district the de clarant has his residence, or, if he has no residence within the
country, his abode; and in the latte r situation the District Court competent to grant approval is the
one in whose district the person to whom delivery is required to be made.had his last residence,
or, if he had no residence within the country, his last abode.

§ 133. [Interpretation of a declarat ion of intention] In interpreting a declarat ion of intention the
true intention shall be sought without re gard to the declaration’s literal meaning.

§ 134. (Statutory prohibition] A legal transaction which violates a statutory prohibition is void,
unless a contrary intenüon appears from the statute.

§ 135. [Statutory prohibition ot alienation] (1) If the disposition of an object violates a st atutory prohibition against alienation which aims
only at the protection of particular persons, the disposition is without effect only as regards these
persons. A contractual disposition is equivalent to a disposition which is effected by means of
compulsory execution or attachment.
(2) Theprovisionsinfavorofthosewhoderiverightsfromapersonwithouttitle apply mutatis mutandis.

§ 136. [Official prohibition of alie nation] A prohibition against alienation which is competently
issued by a Court or by any othe r authority, is equivalent to a statutory prohibition against
alienation of the kind specified in § 135.

§ 137. [Prohibition of alienation in legal transaction] The power to dispose of an alienable right
may not be excluded or limited by legal transaction. The validity of an obligation not to dispose
ofi such a right is not affected by this provision.

§ 138. [Legal transaction against public policy; usury]

(1) A legal transaction which is against public policy is void.
(2) A legal transaction is also void whereby a person exploiting the need, carelessness or
inexperience of another, causes to be promised or granted to himself or to a third party in
exchange for a performance, pecuniary advantages which exceed the value of the performance to
such an extent that, under the circumstances , the pecuniary advantages are in obvious
disproportion to the performance.

§ 139. [Partial nullity] If part of a legal transac tion is void the whole legal transaction is void,
unless it may be assumed that it would have been entered into even if the void part had been
omitted.

§ 140. [Re-interpretation] If a void legal transaction satisfies the requirements of another legal
transaction, the latter is deemed valid if it may be assumed that its validity would have been
intended if there had been knowledge of the nullity.

§ 141. [Confirmation of void legal transadion] (1) If a void legal transa ction is confirmed by the person who en tered into it, the confirmation is
deemed to be a renewed undertaking.
(2) If a void contract is confirmed by the parties, they are oblige d, in case of doubt, to grant each
other what they would have had to grant if the contract had been valid from the outset.

§ 142. [Effect of rescission] (1) If a legal transaction which is liable to be rescinded is rescinded it is deemed to have been
rescinded from the outset.
(2) If a person knew or should have known of the po ssibility of rescission, he is treated, in the
event of rescission, as if he had known or s hould have known of the nullity of the legal
iransaction.

§ 143. [Declaration of rescission] (1) The rescission is effected by declaration to the opposing party.
(2) The opposing party is, in the case of a contract, the other party to the contract, and in the case
of § 123(2) sent. 2, the person who has acqui red a right directly from the contract.
(3) In the case of a unila teral legal transaction to be entered into with another person, that other
person is the opposing party. The same rule applies in the case of a legal transaction required to
be entered into with another person or with a pu blic authority, even if the legal transaction has
already been entered into with the authoritv.
(4) In the case of a unilateral legal transacti on of another kind, the person who has acquired a
legal advantage directly arising out of the legal transaction is the opposing party. The rescission
may, however, if the declaration of intention wa s required to be made to a public authority, be
effected by a declaration to the authority; the authority should communicate the rescission to
whomever is directly affect ed by the legal transaction.

§ 144. [Confirmation of legal tran saction liable to rescission] (1) Rescission is excluded if the legal transaction liable to rescission is confirmed by the
opposing party.
(2) The confirmation need not be in the fo rm prescribed for the legal transaction.

THIRD TITLE
Contract
§ 145. [Binding effect of offer] Whoever offers to another to enter a contract is bound by the
offer, unless he has excluded being so bound.

§ 146. [Expiration of offer] An offer expires if it is refused as against the offerer, or if it is not
accepted by him in due time according to §§ 147 to 149.

§ 147. [fime for acceptance] (1) An offer made to a person who is presen t may be accepted only immediately. This applies
also to an offer made by one person to another by telephone.
(2) An offer made to a person who is not present may be accepted only up to the
moment when the offerer may expect to recei ve an answer under ordinary circumstances.

§ 148. [Fixing of time for acceptance] If the offerer has fixed a period of time for acceptance ot
the offer, the acceptance may take place only within that period.

§ 149. [Late acceptance] If an acceptance reaches the o fferer late and was sent in such a way that
it would have arrived in time with ordinary forwarding, and the offerer must have recognized
this, on receipt of the acceptance he shall imme diately notify the acceptor of the delay, unless
this has already been done. If he delays sending the notification the acceptance is deemed not to
have been late.

§ 150. [Late and modified acceptance] (1) The late acceptance of an offer is deemed a new offer.
(2) An acceptance under amplificat ions, limitations or other alterations is deemed a refusal
combined with a new offer.

§ 151. [Acceptance without declaration to the offerer] The contract is concluded by the
acceptance of the offer, without th e necessity that the offerer be notified of the acceptance, if
such notification is not to 6e expected according to common usage, or if the offerer has waived
it. The moment at which the offer expires is dete rmined according to the intention of the offerer
in the light of the otfer or the circumstances.

§ 152. [Acceptance by notarial authentication] If a contract is notarially authenticated without
both parties being simultaneously present, the contract is, unless other provided, concluded upon
authentication of the acceptanc e as provided for in § 128. The provision of § 151, sent. 2,
applies.

§ 153. [Death or incompetency of offerer] The co nclusion of a contract is not prevented by the
fact that the offerer dies or becomes incompeten t to enter legal transactions before acceptance,
unless a contrary intention on the part of the offerer may be inferred.

§ 154. (Clear lack of agreemen t; lack of authentication] (1) Until the parties have agreed upon all po ints of a contract upon which, according to the
declaration of even only one party, agreement had to be reached, the contract is, in case of dou6t,
not concluded. An agreement concerning individual points is not legally binding, even if the,v
have been recorded.
. (2) If it has been planned that the contract cont emplated be authenticated, in case of doubt the
contract is not concluded until the authentication has taken place.

§ 155. [Hidden lack of agreement] If the parties to a contract which they regard as concluded
have in fact not agreed upon a point upon which an agreement shoul d have been arrived at, that
which is agreed upon is valid if it may be assume d that the contract would have been concluded
even without a settlement of this point.

§ 156. [Auctions] At an auction a contract is not concluded until the knocking down of the
object. A bid expires if a higher bid is made, or if the auctio n is closed withnut knnrkinu dnwn
the nhiert.

§ 157. [Interpretation of contracts] Contracts shall be interpreted according to the requirements
of good faith, giving consideration to common usage.

FOURTH TlTLE
Condition. Fixing of Time

§ 158. [Conditions precedent and subsequent] (1) If a legal transaction is entered into subj ect to a condition precedent, the legal transaction
made dependent on the condition becomes ef fective upon the fulfilment of the condition.
(2) If a legal transaction is entered into subject to a condition subs equent, the effect of the legal
transaction lapses upon the fulfilment of the conditio n; at this moment the former legal situation
is restored.

§ 159. [Retroactivity of consequences] If, accordi ng to the terms of the legal transaction, the
consequences of the fulfilment of the condition are to become operative as from an earlier time,
then upon the fulfilment of the effectiveness of the condition the parties are bound to perform
reciprocallywhat theywould have been bound to perform, if the consequences had become
effective at the earlier time.

§ 160. [Liability while fulfilment pending] (1) Whoever is given rights subject to a c ondition precedent may, on the fulfilment of the
condition demand compensation from the other party, if the latter, during the time fulfilment was
pending, has by his fault destroyed or impair ed the rights dependent upon the condition.
(2) In the case of a legal transaction entered in to subject to a condition subsequent, the person in
whose favor the previous legal position is restored has the like claim under the same conditions.

§ 161. [Ineffectiveness of dispositions while fuffilment pendingJ
(1) If a person has disposed of an object subject to a condition precedent, any further disposition
which he makes of the objed pending the fulfilm ent of the condition is invalid on the fulfilment
ofthe condition insofaras it would frustrate or impair the effect dependent upon the condition.
Equivalent to such a disposition is a disposi tion which is effected, before the condition is
fulfilled, by means of compulsory execution or attachment, or by a trustee in bankruptry.
(2) The same applies, in the case of a condition s ubsequent, to the dispositions of a person whose
right lapses upon the fulf ilment of the condition.
(3) The provisions in favor of those who derive rights from a person without title apply mutatis
mutandis.

§ 162. [Prevention of, or bringing about the conditionJ
(1) Ifthefulfilmentofaconditionispreventedinba dfaithbythepartytowhose disadvantage it would
operate, the condition is deemed to have been fulfilled. (2) If the f~ulf ilment of a condition is
brought about in bad faith by the party to
whose advantage it would operate, the condition is deemed not to have been fulfilled.

§ 163. [Stipulation of time] If, when a legal transaction is entered into, a time has been fixed for
the beginning or the end of its being operative, then in the form er case the provisions applicable
to conditions precedent and in the latter case those applicable to conditions subsequent,
contained in §§ 158, 160, 161, apply mu2atis mutandis.

FIFTH TITLE
Agency. Power of Attorney

§ 164. [Effect of declaration by a representative] (1) A declaration of intention which a person makes in the name of a principal within the scope
of his agency operates directly both in favor of and against the principal. It makes no difference
whether the declaration is made e xpressly in the name of the principal, or if the circumstances
indicate that it was to be made in his name.
(2) If the intention to act in th e name of another is not apparent , the agent’s absence of intention
to act in his own name is not taken into consideration.
(3) The provisions of (1) apply mutatis mutandis if a declaration of intention required to be made
to another is made to his agent.

§ 165. [Representative limited in competenry] The validity of a declaration of intention made by
or to an agent is not impaired by the fact that he is limited in competency to enter into legal
transactions.

§ 166. [Lack of intention; know ledge; power of attomey] (1) Insofar as the legal effectiven ess of a declaration of intention is vitiated by lack of intention,
or by knowledge or by attri6utable knowledge of certain circumstances, the person not of the
principal. but of the agent, is taken into consideration.
(2) When a power of agency (power of attorney ) is conferred by legal transaction, if the agent
has aded according to specific instructions of the principal, the latter may not rely on the
ignoranfe of the agent with re gard to circumstances known to him. The same applies to
circumstances which the principal should have known, so far as attributable knowledge is
equivalent to knowledge.

§ 167. (Granting of pow er ot attorney] (7) A power of attorney is conferred by declar ation to the person who is given the power of
attorney, or to the third party with whom the matter de legated is to be transaded.
(2) The declaration need not be in the form prescribed for the legal transaction to which the
power of attorney relates.

§ 168. [Expiration of power of attorney] The expiration of the power of attorney depends on the
legal relationship upon which its creation is base d. The power of attorney is also revocable
during the subsistence of the le gal refationship, unless a contrary intention appears from such
relationship. The provision of § 167(1) applies
mutatis mutandis to the d eclaration of revocation.

§ 169. (No fiction of continuation as against those in bad faith] Insotar as a termi nated power of
attorney of an agent or a ma naging partner is deemed to continue a provided for in §§ 674, 729,
it is not valid in favor of a thir d party who, at the time when a le gal transaction is entered into,
knows or should know of the termination.

§ 170. [Period of effectiveness of power of atto rney] If a power of attorney i~ conferred by
declaration to a third party, it remains in force wi th respect to hin until he is notified of the
termination by the principal.

§ 171. [Period of effectiveness in case of public notification] (1) Ifapersonhasannouncedbyspecial notificationtoathirdpartyorbypublic notice that he has given
power of attorney to another, then the latter on the basis o~ the notice becomes authorized to

represent, in the former case as regards the particular third party, in the latter case as regards any
third party.
(2) The power of representation remains in for ce until the notice is revoked in the same manner
as it was given.

§ 172. [Written power of attorney] (1) Iftheprincipalhasdeliveredtotheagentawritten powerofattornevandthe agent shows it to a third
party, this is equivalent to special notification of a power of attorney.
(2) The power of representation remains in force until the written power of attorney is returned
to the principal or declared invalid.

§ 173. [Knowledge of expiration] The provisions of §§ 17D, 171(2) and 172(2) do not apply if
the third party knows or should know of the termination of the agency at the time when the legal
transaction is entered into.

§ 174. [Unilateral legal transaction by a representative] A unilateral legal transaction which an
agent enters into with another party is ineffec tive, if the agent does not produce a written power
of attornev and the other party without delay rejects the legal transaction for this reason. The
right to reject is barred if the principal had informed him of the authorization.

§ 175. (Return of written power of attorney] After the termination of the power of attorney the
agent shali return the written pow er of attorney to the principal; he has no right of lien on it.

§ 176. [Declaration of invalidity of written power of attomey] (1) The principal may declare the written power of attorney invalid by public notice; the
declaration of invalidity must be published accord ing to the provisions of the Code of Civil
Procedure applicable to public se rvice of a citation. The declaration of invalidity takes effect
upon the expiration of one month after the last appearance in the official newspapers.
(2) The District Court in whose district the princi pal generally is subject to ju risdiction and the
District Court which would be competent to ente rtain an action for the return of the document,
are equally competent to authorize the publication, without regard to the value of the object in
dispute.
(3) The declaration of invalidity is ineffective if the principal cannot revoke the power of
attorney.

§ 177. [Conclusion of contract by an unauthorized representativej
(1) If a person enters into a contract in the name of another without authority, the validity of the
contrdct depends, as regards the principal, on his ratification. (2) If the other party demands the
principal to declare whether or not he
ratifies, the declaration may be ma de only to him; a ratification or refusal to ratify declared to the
agent before the demand is of no effect. The ratif ication must be declared before the expiration
of two weeks after receipt of the demand; if it is not declared it is deemed to have been refused.

§ 178. (Right of other party to revoke] Until ratification of the contra ct the other party is entitled
to revoke it, unless he knew of th e absence of authority at the time when the contract was entered
into. The revocation may also be declared to the agent.

§ 179. (Liability of an unauthorized agentJ
(1) Whoever has entered into a contract as agent is, if he has not given proof of his authority,
bound to the other party at his choice either to carry out the contract or to compensate him, if the
principal refuses to ratify the contract.

(2) If the agent did not know that he had no authority, he is bound to compensate only for the
damage which the other paryr has sustained by relying upon the authority; not, however, beyond
the vaiue of the interest which the other pa rty has in the validity of the contract.
(3) The agent is not liable, if the other party knew or should have known of the lack of authority.
The agent is also not liable if he was limited in his competency to enter into transactions, unless
he had acted with the consent oi his legal representative.

§ 180. [Unilateral legal transactions ) In the case of a unilateral legal transaction, agency without
authority is not permissible. However, if the pe rson with whom such a legal transaction was to
be entered into did not object to the authority claimed by the agent when the transaction was
being entered into or if he agreed that the ag ent might act without authority, then the provisions
governing contract apply mutatis mutandis. The same rule applies it a unilateral legal transaction
is entered into with an unauthorized agent with his consent.

§ 181 . [Contracting with oneself] r1n agent may not without leave enter into a legal transaction
in the name of his principal with himself in his own name, or as agent of a third party, unless the
legal transaction consists exclusively in the fulfilmentof an obligation.

SIXTH TITLE
Approval. Ratification

§ 182. [Consent] (1) If the validity of a contract or of a unilateral legal transaction which is to be entered into with
another party depends upon the consent ot a thir d party, the granting and also the refusal of
consent may be declared either to the one orto the other party.
(2) The consent need not be in the form prescribed for the legal transaction. (3)
Ifaunilaterallegaltransactionwhosevaliditydependsupontheconsento fa third party is entered into
with the approval of the third party, the provisi ons of § 111, sents. 2, 3 apply mutatis mutandis.

§ 183. [Revocability of approval] Prior assent (approval) is revocable until the legal transaction
has been entered into, unless a contrary intention appears from the legal relationship to which the
approval is granted. The revocati on may be declared either to the one or to the other party.

§ 184. [Retroactive effect of ratificationj
(1) Subsequent assent (ratification) operates from the moment when the legal transaction was
entered into, unless otherwise provided.
(2) Retroactive effect does not make invalid disp ositions which were made before the ratification
of the object of the legal transa ction by the ratifying party, or whic h have been effected 6y means
of compulsory execution or arrestme nt or by a trustee in bankruptcy.

§ 185. [Disposition by unauthorized person)
(1) A disposition affecting an object which is made by a person without ti tle, if made with the
approval of the person entitled, is valid.
(2) The disposition is valid if the person entitled ratifies it, or if the disposer acquires the object,
or if the person entitled has succeeded to his estate and is liable without limitation for the
obligations of the estate. In the last two cases, if several incompatible dispositions have been
made affecting the object, only the first disposition is effective.

FOURTH SECTION
PERIODS OF TIME. TIME LIMITS

§ 186. [Applicability] The rules of interpretation of §§ 187 to 193 apply to the fixing of periods
and dates contained in statutes, c ourt orders and legal transactions.

§ 187. [Beginning of running of period] (1) If a period begins to run from an event or a point of time occurring during the course of a
day, then in computing the period the day in whic h the event or the point of time occurs is not
counted.
(2) It the beginning of a day is th e point of time from which a period begins to run, then this day
is counted in computing the period. The same rule applies to the day of birth in the computing of
age.

§ 188. [End of period] (1) A period determined by days ends with the expiration of the (ast day of the period.
(2) A period determined by weeks, by months, or by a period of time covering several months-
year, half-year, quarter-ends, in the case provided for by § 187(1), on the expiration of that day
of the last week or of the last month which co rresponds in name or number to the day in which
the event or the point of time occurs; in the case provided for by § 187(2), on the expiration of
that day of the last week or of the last mont h which precedes the day which corresponds in name
or number to the initial day of the period.
(3) If, in the case of a period de termined by months, the day on which it is due to expire is
lacking in the last month, the period ends with the expiration of the last day of the month.

§ 189. (Half-year, quarter, half-month] (1) By a half-year is understood a period of six months, by a quarter, a period of three months,
and by a half-month, a period of fifteen days.
(2) If a period is fixed at one or several entire months and a half-month, the fifteen days shall be
counted last.

§ 190. (Extension ot time] In case of the extension of a period the new period is computed from
the expiration of the previous period.

§ 191. [Computation of periods of time] If a period of time is described by months or by years in
such a manner that they need not run consecutive ly, a month is computed as thirty days and a
year as three hundred and sixty-five days.

§ 192. [Beginning, middle and end of a month] By the beginning of a month is understood the
first, by the middle of a month, th e fiheenth and by the end of a month, the last day of the month.

§ 193. [Sundays and holidays; Saturdays] I f, on a given day or within a given period, a
declaration of intention is requir ed to be made or any act of performance to be done, and if the
given day or the last day ot th e given period falls upon a Sunday, a day officially recognized in
the place of declaration or perf ormance as a public holiday, or a Saturday, then the next business
day takes the place of such a day.

FIFTH SECTION
PRESCRIPTION

§ 194. (Scope of prescription] (1) The right to demand an act or an omission from another (a claim) is subject to prescription.
(2) A claim arising from a relatio nship under the family law is not subject to prescription, so far
as it is meant to establish for the future of the situation appropriate to the relationship.

FIRST SECTION
CONTENT OF OBLIGATIONS
FIRST TITLE

Obligation to Perform

§ 241. [Content of obligation] The effect of an obligation is that the creditor is entitled to claim
performance from the debtor. The performan ce may consist of refraining from acting.

§ 242. [Performance according to good faith] The debtor is bound to effect performance
according to the requirements of good faith, giving consideration to common usage.

§ 243. [Debt described by class] (1) If a person owes a thing described only by class, he shall deliv er a thing of average kind and
value.
(2) If the debtor has done whatever is necessary on his part for the delivery of such a thing, his
obligation is limited to that thing.

§ 244. [Money debt] (1) If a money debt expressed in a foreign curre ncy is payable within the country, payment may
be made in the currency of the country, unle ss payment in the foreign currency is expressly
stipulated.
(2) The conversion is made at the currency ra te of exchange in the place of payment.

§ 245. [Debt of specific kind of money] If a money debt is payable in a specific kind of money
which is no longer current at the time of payment, the payment shall be made as if the kind of
money were not specified.

§ 246. [Legal interest rate] If by law or legal tran saction a debt bears interest, four per cent per
annum shall be paid, unless some other rate is specified.

§ 247. (Right of notice in cas e of a high interest rate] (1) If a higher rate of interest than six per cent per annum is agreed upon, the debtor may, after
the expiration of six months, give notice of pa yment of the principal, six months’ notice being
required. The right to tPrminate may not be excluded or limited by contrad.
(2) These provisions do not apply to bonds payable to bearer and to order. In the case of loans,
which are or should be by law created to guarantee bearerbonds,

BOOK 2: § 275-281

§ 275. (Impossibility for which one is not responsible] (1) The debtor is relieved from his obligation to perform if the performance becomes impossible
because of a circumstance, for which he is not responsible, occurring after the creation of the
obligation.
(2) The inability of the debtor to perform after the creation of the obligation is equivalent to
subsequent impossibility of performance.

§ 276. (Responsibility for one’s own conduct] (1) A debtor is responsible, unless it is otherw ise provided, for wilful conduct and negligence. A
person who does notexercise ordinary care acts negligently. The provisions of §§ 827, 828 apply.

(2) A debtor may not be released beforehand from responsibility for wilful conduct.

§ 277. [Care exercised in one’s own affairs] Whoever is obliged to exercise only such care as he
is accustomed to exercise in his own affairs is not relieved from responsibility for gross
negligence.

§ 278. [Responsibility for persons employed in pe rforming obligation] A debtor is responsible
for the fault of his legal representative and of persons whom he employs in performing his
obligation, to the same extent as for his own fault. The provision of § 276(2) does not apply.

§ 279. [Inability to perform in case of debt desc ribed by class] I f a debt described bv class is
owed, and so long as deliverv of this class of obj ect is possible, the debtor is responsible for his
inability to deliver, even though no fault may be imputed to him.

§ 280. [Liability in case of impossibility for which one is responsible] (1) Where the performance becomes impossible becau se of a circumstance for which the debtor
is responsible, the debtor shall compensate the creditor for any damage arising from the
nonperformance.
(2) In the event of partial impossibility the credito r may, by declining the still possible part of the
performance demand compensation for non-performa nce of the entire obligation, if he has no
desire for the partial performan ce. The provisions of §§ 346 to 356 applicable to the contractual
right of recission apply mutatis mutandis.

§ 281. [Delivery of a substitute in c~e of impossibility] (1) If, in consequence of the circumstance which makes the performance impossible, the debtor
acquires a substitute or a claim for compensatio n for the object owed, the creditor may demand
delivery of the substitute received or assignment of the claim for compensation.
(2) If the creditor has a claim for compen sation on the grounds of nonperformance, the
compensation to be made to him is diminished, if he exercises the right specified in (1) by the
value of the substitute received or of the claim for compensation.

§ 282. [Proof in case of impossibil ity] If it is disputed whether the impossibility of performance
is the result of a circumsiance fo r which the debtor is responsible , the burden of proof falls on the
debtor.

§ 283. [Fixing of time after judgment] (1) If a final judgment has been made against th e debtor, the creditor may allot him a reasonable
period for performance, with a declaration that he refuses to accept the performance after the
expiration of the period. Afte r the expiration of the period the creditor may demand
compensation for non-performance, if the performan ce is not effected in due time; the claim for
performance is barred. The liability for compensation does not arise if the performance becomes
impossible in consequence of a circumstance for which the debtor is not responsible.
(2) If at the expiration of the period the performance is only pa rtly not performed, the creditor
also has the right sp ecified in § 280(2).

§ 284. [Default by debtor] (1) If after his obligation is due, the debtor does not perform after a warning from the creditor, he
is in default because of the warning. Bringing an action for performance and service of a judicial
order for payment are equivalent to a warni ng.
(2) If a time is tixed by the calen darfor the performance, the debtor is in default without warning
if he does not perform at the fixed time. The same rule applies if a notice is required to precede

the performance, and the time is fixed in such manner that it may be reckoned by the calendar
from the time of notice.

§ 285. [No default if no liability] The debtor is no t in default so long as the performance does not
take place because of a circumstance for which he is not responsible.

§ 286. [Compensation for default] (1) The debtor shall compensate the creditor for any damage arising from his default.
(2) If the creditor does not desire the performance because of the default, he may, by refusing the
performance, demand compensation for non-perf ormance. The provisions of §~ 346 to 356
applicable to the contractual right of recission apply muYatis mutandis.

§ 287. [Extended liability] A debtor is responsible for an,v negligence during his default. He is
also responsible for impossibility of performance arisingaccidentally during the default, unless
the damage would have arisen even if he had performed in,due time.

§ 288. [Interest during default] (1) A money debt bears interest during default at four per cent per annum. If the creditor can
demand higher interest on any other lawful ground, this shall continue to be paid.
(2) A claim for futher damage is not excluded.

§ 289. [No interest on interest] Interest shall not be paid upon interest in default. The right of the
creditor to compensation for any damage ar ising from the default remains unaffected.

SECOND SECTION
CONTRACTUAL OBLIGATIONS
FIRST TITLE

Creation, Content of Contract

§ 305. [Creation] For the creation of an obligatio n by legal transaction, and for any modification
of the substance of an obligation, a contract be tween the parties is necessary, unless otherwise
provided by law.

§ 306. [Impossible performance] A contract, the performance of which is impossible, is void.

§ 307. [Negative interest] (1) If a person, in conduding a contract the performance of which is impossible, knew or should
have known that it was impossible, he is obliged to make compensation for any damage which
the other party has sustained by relying upon th e validity of the contract; not, however, beyond
the value of the interest which the other party has in the validity of the contract. The duty to
make compensation does not arise if the ot her party knew or should have known of the
impossibility.
(2) These provisions applymutatis mutandis if the performance is only partially impossible, and
the contract is valid in respect of the possible part, or if onlyone of several alternative acts of
performance promised is impossible.

§ 308. [femporary impossibilityJ
(1) The impossibility of performance does not preclude the validity of the contract if the
impossibility can be removed, and the contract is meant to be concfuded only if the performance
becomes possible.

(2) If an impossible performance is promised subject to any other condition precedent or subject
to a specified time of beginning, afte r which it is to become binding
thecontractisvalidiftheimpossibilityisremovedbefo rethefulfillmentof the condition or the arrival
of the time.

§ 309. [Illegal contract] If a contrad is contrary to a statutory prohibition, the provisions of §§
307, 308 apply mutatis mutandis.

§ 310. [Contract concerning future property] A c ontract whereby one party binds himself to
assign his future property or a fractional part of hi s future property or to charge it with a usufruct,
is void.

§ 311. [Contract concerning present property] A contract, whereby one party 6inds himself to
assign his present property or a fractional part of his present property or to charge it with a
usufruct, requires no tarial authentication.

§ 312. [Contract concerning esta te of living third party] (1) A contract concerning the estate of a still living third party is void. The same applies to a
contract relating to the compulsory portion or a legacy from the estate of a still living third party.
(2) These provisions do not apply to a contract which will be concluded among future statutory
heirs concerning the statutory share or compulso ry portion of one of them. Such a contract
requires notarial authentication.

§ 313. [Form of contract for alienation of piece of land] A contract whereby one party binds
himself to transfer ownership of a plot of land requires notarial authentication. A contract
concluded without observance of this form beco mes valid in its entirety if transfer and
registration in the Land Regi ster have taken place.

§ 314. [Extension to accessories] If a person binds himself to alienate or create a charge upon a
thing, the obligation extends, in case of doubt, to the acc essories of the thing also.

§ 315. [Determination of the performance by one party] (1) If the performance is to be determined by one of the contracting parties, it is to be presumed,
in case of doubt, that the de termination is to be made in an equitable manner.
(2) The determination is made by declaration to the other party.
(3) If the determination is to be made in an equitable manner, the determination made is binding
upon the other party only if it is equi table. If it is inequitable the determination is made by court
decision; the same applies if the determination is delayed.

§ 316. [Determination of the counter-performance] If the extent of the counterperformance
promised for an act of performance is not determined, the determination, in case of doubt, is to
be made by the party who is entitled to demand the counter-performance.

§ 317. [Determination of the performance by a third party] (1) If the determination of the performance is left to a third party, it is to be presumed, in case of
doubt, that it shall be made in an equitable manner.
(2) If the determination is to be made by several third parties, the agreement of all is necessary, i
n case of doubt; if a sum is to be specified, and if various sums have been specified, the average
is to be taken.

§ 318. [Rescission of determination]

(1) The determination of the performance left to a third party is made by declaration to one of the
contrading parties.
(2) Rescission of the determination made, on the gr ound of error, threats, or fraud may be made
at the instance of the contracting parties only; the other party is the opposing party for the
rescission. Rescission must be sought without de lay after the person entitled to seek it has
obtained knowledge of the grounds for rescission. Th e right is barred if thirty years have elapsed
after the determination has been made.

§ 319. [Ineffectiveness of the determination; substitution] (1) If a third party is to determine the perfor mance in an equitable manner, the determination
made is not binding upon the contracting parties if it is evidently inequitable. The determination
in this case is made by court decision; the same applies if the third party cannot or will not make
the determination, or if he delays it.
(2) If the third party is to make the determination at his disc retion, the contract is not binding if
the third party cannot or will not make th e determination, or if he delays it.

SECOND TITLE

Mutual Contract

§ 320. [Plea of unperformed contract] (1) Whoever is bound by a mutualcontract mav refu se to perform his part until the other party
has performed his part, unless the former part y is bound to perform his part first. If the
performance is to be made to several persons, the part due to one of them can be refused until the
entire counter-performance has been effect ed. The provision of § 273(3) does not apply.
(2) If one side has performed in part, the count er-performance may not be refused to the extent
that the refusal would be. in the circumstances, c ontrary to good faith, especially in view of the
disproportionate triviality of the remaining part.

§ 321. [Deterioration of property] If a person is obliged by a mutual contract to perform his part
first, he may, if after the conclusion of the cont ract a significant deterioration in the financial
position of the other party occurs whereby the claim for the counter-performance is endangered,
refuse to perform his part until the counter-per formance is made or security is given for it.

§ 322. [Court order for contemporaneous performance] (1) If one party brings an action forthe perf ormance due to him undera mutual contract, the
enforcement of the other party’ s right to retuse performance un til counter-performance has been
made, has the effect onlythat a court mayorde rthe other party to make his performance
contemporaneously.
(2) If the party bringing the action has to perform his part first he may, if the other party is in
default in acceptance, bringan action for performanceafter receip t of the counter-performance.
(3) The provision of § 274(2) applies to compulsory execution.

§ 323. [Development of impossibility for which neither party is resporrsible] (1) If the performance due from one party under a mutual contract becomes impossible because
of a circumstance for which neither he nor the other party isBOOK 2: § 324-327
responsible, he loses the claim to counter-performance; in case of partial impossibility the
counter-performance is diminished in accordance with §§ 472, 473.
(2) If the other party demands delivery under §281 of thesub stitute received for the object owed,
or assignment of the claim for compensation, he remains obliged to make the counter-

performance; this is diminished, however, in accordance with §§ 472, 473 insofar as the value of
the substitute or of the claim for compensation is less than the value of the performance due.
(3) If counter-performance has been made which according to these provisions was not due,
insofar as the pertormance is made, it may be demanded back under the provisions relating to the
return of unjust enrichment.

§ 324. [Developrnent of impossibility for which creditor is responsibleJ
(1) If the performance due from one party under a mutual contract becomes impossible because
ot a circumstance for which the other party is re sponsible, the first party retains his claim for
counter-performance. He must, however, deduct what he saves in consequence of release from
the performance, or what he acquires or wilfully omits to acquire by a different use of his labor.
(2) The same rule applies if the performance due from one party becomes impossible, because of
a circumstance for which he is not responsible, at a time when the other party is in default of
acceptance.

§ 325. [Development of impossibility for which debtor is responsible] (1) If the performance due from one party under a mutual contract becomes impossible because
of a circumstance for which he is responsible , the other party may demand compensation for
non-performance, or withdraw from the contract. In case of partial impossibility, if he does not
desire the partial performance of the contract, he is entitled, subjed io the conditions specified in
§ 28012) to demand compensation for non-performance of the entire obligation, or tö withdraw
from the entire contract. Instead of the daim fo r compensation and of the right of rescission he
may demand the rights specified in the situation provided for by§323.
(2) The same applies in the situation provide d for by § 283, if the pertormance is not made
before the expi ration of the period, or if at that time it is in part not made.

§ 326. [Default; fixing of period with warning of refusalJ
(1) If, in the case of a mutual contract, one party is in default in oerforming, the other party may
give him a reasonable period within which to perfo rm his part with a declaration that he will
refuse to accept the performance after the expi ration of the period. After the expiration of the
period he is entitled to dema nd compensation for non-performance, orto withdraw from the
contract, if the performance has not been made in due time; the daim for performance is barred.
If the performance is only partly made before the expiration of the period, the provision of §
325(1), sent. 2, applies mutatis mutandis.
(2) If, in consequence of the default, the perfor mance of the contract is of no use to the other
party, such other party has the rights sp ecified in (1) without giving any period.

§ 327. [Rules of statutory right of rescissionJ Th e provisions of §§ 346 to 3~6 applicable to the
contractual right of rescission a pply mutatis mutandis to the right of rescission described in §§
325, 326. If the rescission occurs because of a circumstance for which the other party is not
responsible, such other party is liable only under the provisions relating to the return of unjust
enrichment.

BOOK 2: § 348-357
§ 348. [Contemporaneous fulfilment] The obligations of the parties resulting from rescission
shall be fulfilled contemporaneously. The pr ovisions of §§ 320, 322, apply mutatis mutandis.

§ 349. [Declaration of rescission] Rescission is effected by declaration to the other party.

§ 350. [Accidental destruction] The right of rescission is not barred by the fact that the object
which the party entitled to rescind has r eceived has been accidentally destroyed.

§ 351. [Destruction caused by fault] The right of rescission is barred if the party entitled is to
blame for any significant deterioration, destruction, or impossibilityof delivery for other reasons
of the object received. The destru ction of a considerable part is equivalent to the significant
deterioration of the object; the fault of anot her person for whom, according to § 278, the party
entitled is responsible, is equivalent to the party’s own fault.

§ 352. [Processing or remodelling] The right or rescission is barred if the party entitled has
altered the form of the object r eceived by processing or remodell ing it into a thing of another
kind.

§353. [Alienation or charge] (1) If the party entitled has disposed of the object received or a considerable part of it, or has
burdened it with a right in favor of a third party, the right of rescission is barred if the conditions
of § 351 or of ~ 352 have arisen in the case of the party who has acquired the object because of
the disposition.
(2) A disposition which is effected by means of com pulsory execution or distraint, or by a trustee
in bankruptcy is equivalent to a disposition by the party entitled.

§ 354. [Default; fixing of period to re turn objectJ If a party entitled is in default in returning the
object received or a considerable part of it, the other partv may give him a reasonable period,
with a declaration that he will refuse to accept after the expiration of the period. The rescission
becomes ineffedive if the return is not made before the expiration of the period.

§ 355. [Expiration of right to rescind after fixing pe riod] I f a period for the exercise of jhe right
of rescission has not been agreed upon, a reasonab le period for its exercise may be given to the
party entitled to it by the other pa rty. The right of rescission expires if rescission is not declared
before the expiration of the period. § 356. [Non-severab ility of right to rescind] I f in a contract
there are several persons on one or other side, the right of rescission may beexercised only byall
and against all. If the right of re scission expires in resped of one of the persons entitled, it expires
also in respect of the others.

§ 357. [Rescission on the grounds of non-performance] If one party has reseyed the right of
rescission in the even t the other party does not perform his obligation, the rescission is
ineffective if the other pa’ty could have relieved himself from theBOOK 2: § 358-362
obligation by set-off, and if he makes a declarat ion of set-off without delay after the rescission.

§ 358. [Burden of proof in case of rescission on grounds of non-performance] If one party has
reserved the right of rescission in the event the othe r party does not perform his obligation, and
the latter contests the admissibility of the d eclared rescission on the ground that he has
performed, he shall prove performance unless the ob ligation due from him was to refrain from an
action.

§ 359. [Rescission on payment of a forfeit] If rescission may be made only on payment of a
forfeit, the rescission is ineffective if the forfeit is not paid betore or at the time of the declaration
of rescission, and the other party without dela y rejects the declaration for this reason. The
declaration is, however, effective if the forfe it is paid without delay after the rejection.

§ 360. [Clause as to forfeiture grants to rescind] If a contract provides that the debtor shall forfeit
his rights under the contract if he does not perform his obligati on, the creditor is entitled, on the
occurrence of this event, to rescind the contract.

§ 361. [Rescission in event of exactly specified transactionj If it is agreed in a mutual contract
that the performance due from one of the parties is to be made exactly at a fixed time or within a
fixed period, it is to be inferred, in case of doubt, that the other pa rty shall be entitled to rescind
if the performance is not made at the fixed time or within the fixed period.

THIRD SECTION
EXTINCTION OF OBLIGATIONS
FIRST TITLE

Fulfilment

§ 362. [Extinction by performanceJ
(1) An obligation is extinguished if the pe rformance owed is made to the creditor.
(2) If performance is made to a third party for the purpose of fulfilment, the provisions of § ~85
apply.

§ 363. [Burden of proof in case of acceptance of performance as fulfilment] If the creditor has
accepted as fulfilment an act of performance offe red as fulfilment, the burden of proof is upon
him if he does not admit the performance to be valid as fulfilment on the ground that it is other
than the performance due, or that it was incomplete.

§ 364. [Acceptance in lieu of fulfilment] (1) An obligation is extinguished if the creditor a ccepts in lieu of fulfilment another performance
than the one due.
(2) If the debtor, for the purpose of satisfving the creditor, assumes a new obligation towards
him, it is not to be presumed, in case of doubt, that he assumes the obligation in lieu of
fulfilment.

§ 365. [Warranty in case of giving performance in lie u of fulfilment] I f a thing, a claim against a
third party, or any other right is given in lieu of fulfilment, the debtor shall gran t warranty, in the
same manner as a seller, agai nst a defect in title and against a de fect in the thing.

§ 366. [Partial performance in event of several obligations] (1) If a debtor is bound to do for the creditor similar acts of performance by virtue of several
obligations, and if the performan ce effected by him is insufficient for the discharge of all debts,
then the debt which he specifies on e ffecting the performance is discharged.
(2) If the debtor makes no specification, among several debts due the one which affords the
creditor least security is first discharged; among several equa lly secure debts the one most
burdensome to the debtor; among several equally burdensome debts the oldest debt; and where
several are equally old, e ach debt proportionately.

§ 367. [Interest and costs in ev ent of partial performance] (1) If the debtor has to pay inte rest and costs besides the principa l performance, the value of an
act of performance insufncient to discharge the whole debt is applied first to the costs, then to the
interest. and lastly to the principal performance.
(2) If the debtor specifies a ny other application, the creditor may refuse to accept performance.

§ 368. [Receipt] On receipt of the performance the creditor shall on demand give a written
acknowledgment of receipt ( receip t). If the debtor has a legal interest i n the making of the
receipt in any other form he may require it to be made in such other form.

§ 369 [Costs of receipt] (1) The debtor shall bear and advance the cost of the receipt, unless a contrary intention appears
from the legal relationship existing between him and the credito r.
(2) If,inconsequenceofatransferoftheclaimorbywayof inheritance,several creditors take the place
of the original creditor, the excess co sts shall be borne by the creditors.

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