Update 03/25/2020:

The bill shown below has been weakened.

– The obligation to file for insolvency will be suspended initially until Sept. 30, 2020, and possibly later until March 31, 2021. The prerequisite is that a company has become insolvent as a result of Covid-19. For companies that were still solvent as of Dec. 31, 2019, it is presumed that the insolvency that has now occurred is due to Covid-19. In addition, for the period of suspension of the obligation to file for insolvency, the contestability under insolvency law of legal acts of the de facto insolvent company is excluded to a large extent, but for a limited period of time.
– A moratorium is still envisaged with regard to obligations under the law of obligations.
Certain debtors are to be granted a temporary right to refuse performance for certain contractual relationships. However, the scope of the affected was toned down. Thus, the law is intended to apply only to consumers within the meaning of § 310 para. 3 BGB, as well as to microenterprises, i.e. those that wThe company must employ fewer than 10 people and its annual turnover or annual balance sheet must not exceed EUR 2 million. These beneficiaries are paid for The right to refuse performance, initially limited in time to June 30, 2020, is granted to all parties to a continuing obligation established before March 8, 2020. The temporal effect of the right to refuse performance may be extended by ordinance until Sept. 30, 2020. However, this does not apply to all continuing obligations, but only to those that are connected to the provision of services of general interest and, in the case of microenterprises, to those contracts that are necessary for the reasonable continuation of its business operations. In addition, but this is probably clear, a right to refuse performance only applies if the inability to perform is based on reasons attributable to Covid-19.
– It should be noted, however, that in the event that the debtor’s right to refuse performance makes it unreasonable for the creditor, the debtor may terminate the continuing obligation.
– Furthermore, the right to refuse performance shall not apply to rental and lease agreements, loan agreements, and employment contracts.
– For rental and lease agreements, the right to extraordinary termination without notice based on default in payment (Sections 543, 573 of the German Civil Code (BGB)) shall be excluded if the default in payment is based on due rental payments from the period from April 1, 2020 to June 30, 2020 (extendable until September 30, 2020 by legal decree) and a liquidity weakness due to Covid-19 that must be substantiated. The termination exclusion will apply until June 30, 2022.
– The regulations for loan agreements were also limited to consumer loan agreements pursuant to Section 491 of the German Civil Code. In this case, the borrower will be granted a lump-sum deferral of 3 months for all interest and repayment claims falling due in the period from April 1 to June 30, 2020 (extendable to September 30, 2020) under loan agreements concluded before March 15, 2020, provided that the borrower proves that he is unable to meet his Covid 19 obligations without jeopardizing his reasonable livelihood. During this period in which a deferral takes effect, termination is generally excluded. The lender is also to be required to make individual agreements with the borrower. If no agreement is reached, the deadlines are extended by 3 months in favor of the borrower.
The regulations all correspond to the legal ideas, of § 313 para. 1 BGB (German Civil Code), which governs the elimination of the basis of the contract. However, this norm has been applied very little in the past and the idea still originates from the Imperial Court.
However, it should also be noted that the draft law, which is now probably final, only creates regulations for continuing obligations. One-time bookings of concerts, premises, events and the like are not covered by the wording and must probably be regulated regularly via § 313 BGB.
*original message

 

The German government is expected to pass a law early next week that will impose numerous obligations regarding payments in the Corona crisis.

The draft law is currently not without its critics, and above all it should be noted that the regulations only include deferrals of obligations, as deferrals of payments. The obligation therefore revives at a later date.

Among other things, Article 240 of the Introductory Act to the Civil Code is to be worded as follows:

§ 1

Moratorium

(1) A debtor has the right to refuse performance of a claim related to a contract entered into before March 8, 2020, until September 30, 2020, if, as a result of circumstances attributable to the spread of SARS-CoV-2 virus infections (SARS-CoV-2 virus pandemic),

1. cannot provide the service or

2. the provision of the benefit would not be possible without endangering his reasonable subsistence or the reasonable subsistence of his dependants or the economic basis of his business.

(2) Paragraph 1 shall not apply,

1. if the exercise of the right to refuse performance is unreasonable for the creditor, taking into account all the circumstances of the individual case, including the changes in the general circumstances of life caused by the COVID 19 pandemic,

2. insofar as in individual cases applicable provisions of international conventions on the carriage of goods contain conflicting regulations.

Paragraph 1 shall also not apply in connection with

1. contracts pursuant to §§ 2 and 3,

2. employment contracts,

3. package travel contracts,

4. contracts for the carriage of passengers by air or rail.

If the right to refuse performance under subsection 2 sentence 1 number 1 is excluded, the debtor may withdraw from the contract. In the case of continuing obligations, the right of rescission shall be replaced by the right of termination.

(3) Paragraphs 1 and 2 may not be deviated from to the detriment of the debtor.
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§ 2

Restriction on the termination of tenancies

(1) A landlord may not terminate a lease of land or premises to the extent that the tenant fails to pay rent during the period from April 1, 2020, through September 30, 2020, despite the fact that rent is due, and the failure to pay is due to the effects of the COVID 19 pandemic. The link between COVID-19 pandemic and non-performance is suspected. Other rights of termination shall remain unaffected.

(2) Paragraph (1) shall apply only until September 30, 2022.

§ 3

Regulations on loan law

(1) For loan agreements entered into prior to March 8, 2020, claims of the lender for repayment, interest or principal payments due between April 1, 2020, and September 30, 2020, shall be deferred for a period of six months upon the occurrence of the due date if the borrower experiences a loss of revenue due to the extraordinary circumstances caused by the spread of the COVID-19 pandemic that results in the borrower being unable to reasonably perform the service owed. He cannot reasonably be expected to provide the service in particular if

1. his or her reasonable living expenses or the reasonable living expenses of his or her dependents; or

2. the economic basis of his business is endangered. The link between the COVID-19 pandemic and the revenue shortfalls is suspected.

(2) Termination by the lender due to default in payment or significant deterioration in the financial circumstances of the borrower shall be excluded in the case of paragraph 1 until the end of September 30, 2020.

(3) The contracting parties may reach agreements deviating from paragraph 1, in particular on possible partial payments, interest and repayment adjustments or debt rescheduling. Paragraph 2 may not be deviated from to the detriment of the borrower.

(4) The lender shall offer the borrower a discussion on the possibility of an amicable settlement and on possible support measures. Remote means of communication may also be used for this.

(5) If an amicable settlement is not reached for the period after September 30, 2020, the term of the agreement shall be extended by six months. The respective due date of the contractual services shall be postponed by this period. The Lender shall provide the Borrower with a copy of the Contract reflecting the agreed amendments to the Contract or the amendments to the Contract resulting from the first sentence and the first sentence of paragraph 1.

(6) Paragraphs (1) through (5) shall not apply if the lender asserts that deferral or exclusion of termination is unreasonable for the lender, taking into account all the circumstances of the case, including changes in general circumstances caused by the COVID-19 pandemic.

§ 4

Ordinance Authorization

The Federal Ministry of Justice and Consumer Protection is authorized, in agreement with the Federal Ministry of Finance and the Federal Ministry for Economic Affairs and Energy, by ordinance without the consent of the Bundesrat, to

1. to extend the application of § 1 until July 31, 2021 at the latest,

2. to extend the termination restriction contained in section 2(1) to rent arrears incurred in the period from October 1, 2020 to March 31, 2021 at the latest,

3. to extend the period referred to in Section 3 (1) and (2) to up to twelve months and the period referred to in Section 3 (2) to no later than the end of March 31, 2021,

when it is expected that the social lives and employment of large numbers of people will continue to be significantly affected by the COVID-19 pandemic.

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