The Federal Court of Justice (BGH) has made a decision on the law of sale which, although it actually concerns the purchase of a condominium, in reality deals with an age-old conflict in the law of sale, namely how the German Civil Code (BGB) deals with the fact that, as a rule, there is always an information gap between the seller and the buyer of an item.

Of course, this situation happens all the time in online trading or other contracting and is therefore also relevant for every trader. In its decision, the BGH has removed any incentive for sellers to cheat.

In the present case, the seller (or in this case a realtor) deceived about a certain circumstance in the apartment without, however, writing anything false. It only did not fully clarify, namely that about 50% of the apartment has too low ceilings and therefore was not allowed to live in accordance with the building code. The Court of Appeal therefore still thought that a pre-contractual breach of duty was ruled out. The BGH took a different view and ruled:

A seller who has provided false information does not satisfy his pre-contractual obligations merely by enabling the prospective buyer to recognize the inaccuracy of such information; rather, he is obliged to correct a misconception previously created in the prospective buyer by disclosing the true circumstances on his own initiative.

 

As buyer-friendly as this view may be, however, the decision could also cause many problems for bona fide sellers. Inadvertent misrepresentations or claims made in the dark, as well as simply incomplete descriptions of the object of purchase, could increasingly lead to the effective rescission of purchase contracts in the future.

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