Culpa in contrahendo

Definition and legal basis:

Culpa in contrahendo (c.i.c.) is a legal institution of German civil law that regulates liability for breaches of duty in the pre-contractual area. It was originally developed by Rudolf von Jhering and has been codified in Section 311 (2) and (3) of the German Civil Code since the 2002 reform of the law of obligations. The c.i.c. establishes a statutory obligation without a primary obligation to perform, from which duties of protection, disclosure and loyalty arise.

Requirements and scope of application:

Liability arising from c.i.c. presupposes that a pre-contractual obligation has arisen between the parties. This can be established by the commencement of contract negotiations, the initiation of a contract or similar business contacts. The decisive factor is that one party grants the other party the opportunity to influence its rights, legal interests and interests with regard to a possible legal relationship. Typical cases of c.i.c. are 1. breach of duties of disclosure
2. Termination of contract negotiations
3. Fault upon conclusion of the contract
4. Liability for incorrect information

Legal consequences and compensation:

In the event of a breach of duty under the c.i.c., the injured party may claim damages. The scope of damages is governed by §§ 249 ff. BGB. In principle, the injured party is to be placed in the same position as he would have been in without the breach of duty. This can lead to compensation for negative interest (loss of confidence) or, in certain cases, positive interest (loss of performance). The following aspects must be taken into account when calculating damages: – Type and scope of the breach of duty
– Degree of fault
– Contributory negligence of the injured party (Section 254 BGB)
– Causality between breach of duty and damage Differentiation and relationship to other legal institutions:

The c.i.c. must be distinguished from other liability institutions:

1. contractual liability: The c.i.c. already applies before the contract is concluded, whereas contractual liability requires a valid contract. 2. tortious liability: In contrast to tortious liability, the c.i.c. also protects pure financial losses and recognizes vicarious liability in accordance with § 278 BGB. 3. management without mandate: c.i.c. does not require acting for another party, but is linked to the initiation of a contractual relationship. The c.i.c. can exist alongside other bases for claims and is particularly relevant if contractual or tortious claims are excluded.

Practical relevance and current developments:

The c.i.c. is of great importance in legal practice, particularly in complex contractual negotiations and in the initiation of business relationships. It serves to protect trust and promote good faith in business transactions. Recently, case law has further developed the application of c.i.c. in various areas, for example – Liability for prospectus disclosures in capital investments
– Protection of know-how in contract negotiations
– Liability for termination of merger negotiations In addition, the c.i.c. is becoming increasingly important in an international context, as similar concepts exist in many jurisdictions and must be taken into account in cross-border transactions. In summary, it can be said that culpa in contrahendo is an important instrument of German civil law to close gaps between contractual and tortious liability and to ensure adequate protection in the contract initiation phase. Its flexible application by the courts makes it possible to react to new challenges in business transactions and to find fair solutions for pre-contractual breaches of duty.