Challenge

Definition and legal basis:

Rescission is a legal institution under German civil law that enables a party to rescind a declaration of intent with retroactive effect. It is regulated in Sections 119-124 of the German Civil Code (BGB). Successful rescission means that a declaration of intent is considered null and void from the outset (ex tunc). The aim of rescission is to release the declaring party from a declaration of intent that does not correspond to his or her true intentions or was made under undue influence. Rescission is an important instrument for the protection of private autonomy and serves to correct deficiencies of will when declarations of intent are made.

Grounds for contestation:

The BGB recognizes various grounds for avoidance: 1. error of content (Section 119 (1) Alt. 1 BGB):
The declarant is mistaken about the content of his declaration. 2. error of declaration (Section 119 (1) Alt. 2 BGB):
The declaration is inadvertently transmitted incorrectly. 3. mistake as to characteristics (Section 119 (2) BGB):
Mistake as to the essential characteristics of a person or thing. 4. error of transmission (Section 120 BGB):
Incorrect transmission by a messenger or an institution. 5. deception (Section 123 (1) Alt. 1 BGB):
fraudulent misrepresentation by the contractual partner or a third party. 6. threat (Section 123 (1) Alt. 2 BGB):
Unlawful threat to make a declaration of intent.

Requirements and procedure for contestation:

The following requirements must be met for an effective avoidance: 1. Existence of a ground for avoidance
2. Declaration of avoidance to the correct opposing party
3. Compliance with the contestation period The contestation is made by means of a declaration of intent to the opposing party that must be received. It must be made immediately (without culpable delay) after the party entitled to avoid has become aware of the grounds for avoidance. In the case of deception or threats, the period for avoidance is one year from the discovery of the deception or the end of the predicament.

Legal consequences of rescission:

Successful avoidance has far-reaching consequences: 1. nullity ex tunc:
The legal transaction is deemed null and void from the outset. 2. reversal:
Services already rendered must be returned (Section 812 et seq. BGB). 3. compensation for damages:
The contesting party may be obliged to compensate for the loss of trust (Section 122 BGB). 4. acquisition in good faith:
Third-party rights may continue to exist under certain circumstances despite avoidance.

Special features and restrictions:

There are various special regulations and restrictions on the right of avoidance: 1. possibility of confirmation (Section 144 BGB):
An avoidable legal transaction can become valid through confirmation. 2. reinterpretation (Section 140 BGB):
A void legal transaction can be reinterpreted as another valid one. 3. exclusion of avoidance:
In certain cases, avoidance is excluded, e.g. in the case of knowledge of an error. 4. special provisions in family law:
Special provisions apply to the avoidance of marriage.

Practical significance and areas of application:

Rescission plays an important role in many areas of civil law: 1. Contract law:
Correction of errors in contracts. 2. company law:
Contestation of shareholder resolutions. 3. inheritance law:
Contestation of wills or inheritance contracts. 4. consumer protection:
Protection against misleading business practices. 5. employment law:
Contestation of employment contracts or dismissals.

Challenges and risks:

The application of avoidance law also poses challenges: 1. burden of proof:
The contesting party must prove the existence of the grounds for avoidance. 2. questions of demarcation:
The distinction between different types of error can be difficult. 3. legal certainty:
The possibility of avoidance can impair legal certainty. 4. risk of abuse:
The right of avoidance can be abused to subsequently resolve unfavorable transactions.

Current developments and case law:

Case law on avoidance is constantly evolving: 1. Digitalization:
New issues arise in the context of electronic declarations of intent and online contracts. 2. consumer protection:
Tendency towards increased protection of consumers in avoidance cases. 3. international aspects:
Increasing importance of avoidance in cross-border legal relationships. 4. relationship to culpa in contrahendo:
demarcation and interaction of avoidance and pre-contractual liability. In summary, avoidance is a central instrument of civil law for correcting defects of will. It makes it possible to undo legal transactions that do not correspond to the true will of a party or that were concluded under undue influence. The correct application of the right of avoidance requires a careful examination of the conditions and consideration of the possible consequences. In an increasingly complex legal and economic world, avoidance remains an important instrument for safeguarding private autonomy and fair business transactions.