References without law book default to BGB.

Case - Default of Delivery (Audi)

Facts

Chloe (C) buys a new Audi from Diane (D). C and D agree that D will deliver the car to C next Monday, as C needs the car to go on a trip.

D fails to deliver on Monday. Thus, C has to rent a car for one week for EUR 150. Two weeks later, D finally hands over the car to C.

Base Case: Can C demand EUR 150 as compensation?

Variation: D fails to deliver on Monday. Thus, C now buys the same car from a different car dealer for a higher price. Can C demand the difference in the purchase price as compensation?

Solution

Slides Solution

Base Case

• Issue: Can C demand EUR 150 as compensation from D in line with §§ 280 I, II, 286 BGB?
• Rule: For this claim, there needs to be a sale of goods contract, and the requirements of §§ 280 I, II, 286 BGB must be met.
• Application:
  • 1. Contract: → (+), sale of goods contract (§ 433 BGB).
  • 2. Default according to § 286 BGB:
    • a) Due, enforceable claim: → (+), delivery agreed to be on Monday (due). C can demand performance (enforceable).
    • b) Warning notice: → (-). Exception (§ 286 II BGB)? → (+), § 286 II No. 1 BGB: time specified = Monday.
    • c) (Still) no performance: → (+), no delivery by D.
  • 3. Element of fault (§§ 286 IV, 276 BGB): Did D not perform intentionally or negligently? → (+), responsibility is assumed according to § 280 I 2 BGB.
  • 4. Damages: → (+), rental costs (EUR 150).
• Conclusion: C can claim EUR 150 as compensation in addition to performance (default of debtor) from D according to §§ 280 I, II, 286 BGB. (C still can claim performance → delivery of the bought car!)

Variation

• Issue: Can C demand the higher price as compensation from D in line with §§ 280 I, III, 281 BGB?
• Rule: For this claim, there needs to be a sale of goods contract, and the requirements of §§ 280 I, III, 281 BGB must be met.
• Application:
  • 1. Contract: → (+), sale of goods contract (§ 433 BGB).
  • 2. Breach of Duty acc. to § 281 BGB:
    • a) Non-/bad performance of due, enforceable claim: → (+), delivery agreed to be on Monday (due), C can demand performance (enforceable), non-performance.
    • b) Setting a reasonable deadline: → (-). Exception (§ 281 II BGB)? → (-).
• Conclusion: C cannot claim the higher price as compensation from D in line with §§ 280 I, III, 281 BGB. (If D delivers in the end, C will have the car she should have always gotten. Since C never set a deadline, D was still allowed to perform. Had C waited, no damage would have occurred.)

Write-Up

Issue: Can C demand compensation for delay or the difference in purchase price from D under § 280 BGB?

Base Case

Issue: Can C demand compensation of EUR 150 from D for the rental car under §§ 280 I, II, 286 BGB?

Rule: Under § 280 I, II BGB in conjunction with § 286 BGB, a creditor can demand compensation for damages caused by the debtor’s default (Verzugsschaden). This is compensation in addition to performance.

Application: A valid sales contract (§ 433 BGB) exists between C and D.
1. Default (§ 286 BGB):

• C has a due and enforceable claim for the delivery of the Audi. The parties agreed that delivery was to take place on Monday.
• Generally, default requires the creditor to issue a formal warning notice (Mahnung) after the claim becomes due (§ 286 I BGB). C did not issue a warning.
• However, a warning is dispensable if a time is specified by the calendar (§ 286 II No. 1 BGB). Since “next Monday” is an exactly determinable calendar day, the warning was not required. D failed to deliver the car on that day.

2. Fault: Under § 286 IV BGB and § 280 I 2 BGB, the debtor’s fault is legally presumed. There is no indication that D was prevented from delivering by circumstances outside her responsibility. Thus, D acted with negligence (§ 276 BGB).

3. Damages: Because of D’s delay, C had to rent a replacement car for EUR 150. Even if D cures the breach by delivering the car later, this specific damage (the rental cost incurred during the delay) remains.

Conclusion: C can demand the EUR 150 as compensation for delay from D under §§ 280 I, II, 286 BGB.

---

Variation

Issue: Can C demand the difference in the purchase price from D under §§ 280 I, III, 281 BGB?

Rule: The creditor may demand damages instead of performance under §§ 280 I, III, 281 BGB. Under § 281 I 1 BGB, this requires that the creditor has unsuccessfully set a reasonable deadline for the debtor to perform.

Application: A valid sales contract exists. By buying a replacement car, C no longer wants the original car from D. Therefore, she is seeking compensation instead of performance.

• C has a due and enforceable claim for delivery and D has failed to perform.
• However, C never set an additional deadline (Nachfrist) for D to deliver the car.
• A deadline is only dispensable under strict conditions, such as if the debtor seriously and definitively refuses performance (§ 281 II BGB). There is no indication of this in the facts.

Because C failed to set a reasonable deadline for D to perform, D retained the right to cure her breach. If C had simply waited, D could have delivered the car and C would not have incurred the extra costs of the cover purchase.

Conclusion: C cannot claim the difference in the purchase price as compensation from D under §§ 280 I, III, 281 BGB.