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AI Generated Exam Case

Case - Defective Coffee Machine

Facts

Leo (L) is a young architect who runs his own small office as a sole proprietor. He has no employees and a relatively low annual turnover. To treat himself and his occasional clients, he decides to buy a high-end espresso machine for his office. He looks up the website of TechStore GmbH (T), a large electronics retailer.

On 5th of May, L sends an email to T stating: “I would like to order the BaristaPro 3000 espresso machine for the price of EUR 1,000 as listed in your current flyer.”
The next day, T replies: “Thank you for your order. We will ship the BaristaPro 3000 to you. However, please note that the flyer is outdated, and the current price is EUR 1,100. We will dispatch the item upon receipt of payment.”
L only skims the email, doesn’t notice the price difference, and simply transfers EUR 1,100 to T’s bank account. T ships the machine, and L receives it on 10th of May.

Three months later, on 10th of August, the espresso machine suddenly leaks a large amount of boiling water due to a hidden manufacturing defect that was already present when the machine left the factory. The machine stops working. Furthermore, the boiling water severely damages L’s expensive oak desk, causing repair costs of EUR 500 for the desk. The coffee machine itself can be easily repaired for EUR 50.

L contacts T demanding that T repairs the machine and compensates him for the EUR 500 desk repair. T refuses both. T points to their Standard Terms and Conditions (AGB), which were properly incorporated into the contract. The AGB state: “For business customers (B2B), the warranty period for any defects is limited to 1 month from delivery.” T argues that since L bought the machine for his architecture office, the warranty period has expired. Furthermore, T argues they cannot be held responsible for the desk since they did not build the machine, but merely sold it in its original sealed box.

Questions:
a. Was a valid sales contract concluded for the price of EUR 1,100? (5 P)
b. Is the AGB clause limiting the warranty to 1 month valid? (6 P)
c. Assuming the warranty is not expired, can L demand the repair of the machine and the EUR 500 compensation for the desk from T under the BGB? (14 P)

Solution

Solution Summary

Part a: Contract Formation

• Issue: Was a valid contract formed for EUR 1,100 despite the discrepancy in the initial email?
• Rule: A contract requires two matching declarations of intent: offer and acceptance (§§ 145, 147 BGB). An acceptance with modifications is deemed a rejection combined with a new offer (§ 150 II BGB).
• Application:
  • L’s initial email was an offer to buy for EUR 1,000.
  • T’s reply changed the price to EUR 1,100. Under § 150 II BGB, this is a rejection of L’s offer and constitutes a new offer by T.
  • L transferred EUR 1,100. By paying the exact requested amount, L implicitly accepted T’s new offer through conclusive conduct (implied acceptance).
• Conclusion: Yes, a valid sales contract was concluded for EUR 1,100.

Part b: Validity of the AGB Clause

• Issue: Is the AGB clause limiting the warranty to 1 month valid in a B2B transaction?
• Rule: While the strict prohibitions of §§ 308, 309 BGB do not apply to B2B contracts (§ 310 I BGB), standard terms in B2B transactions are still subject to the general reasonableness test under § 307 BGB.
• Application:
  • The statutory warranty period is generally 2 years (§ 438 I No. 3 BGB).
  • Reducing the warranty period to just 1 month for hidden defects severely undermines the core obligations of a sales contract (§ 433 I 2 BGB).
  • Such a drastic reduction unreasonably disadvantages the contractual partner contrary to the requirements of good faith (§ 307 I, II No. 1 BGB).
• Conclusion: The AGB clause is invalid. The statutory warranty period applies.

Part c: Buyer’s Remedies for Machine and Desk

• Issue I: Right to Repair (Machine)
  • Rule: Under § 437 No. 1 BGB, the buyer can demand cure (§ 439 BGB) if there is a material defect at the passing of risk.
  • Application: The manufacturing defect causing the leak is a material defect (§ 434 BGB) present at the passing of risk (§ 446 BGB). L is not a merchant under the HGB (freelance architect, no commercial business), so § 377 HGB does not apply. L can demand repair (§ 439 I BGB), and the EUR 50 repair cost is not disproportionate.
  • → (+) L can demand the repair of the machine.
• Issue II: Compensation for the Desk
  • Rule: Under §§ 437 No. 3, 280 I BGB, the buyer can claim damages for consequential harm caused by a defect if the seller breached a duty and acted with fault (intent or negligence, § 276 BGB).
  • Application: Delivering a defective machine is a breach of duty (§ 433 I 2 BGB). However, the seller must be at fault. T is merely a retailer who sold the machine in a sealed box. Retailers generally have no duty to open and inspect every sealed, branded product for hidden manufacturing defects before sale. Therefore, T did not act negligently (§ 276 II BGB) and is not at fault for the defect.
  • → (-) L cannot demand the EUR 500 from T under contract law. (Note: Claims against the manufacturer under the ProdHaftG might exist, but were not asked).
• Conclusion on c: L can demand the repair of the machine, but cannot claim the EUR 500 for the desk from T.

Advanced Legal Analysis

Topic 1: B2B vs Consumer Status for Freelancers

• While L bought the machine for his architecture office, making him an entrepreneur (§ 14 BGB) and not a consumer (§ 13 BGB), he does not qualify as a merchant under the Commercial Code (HGB). The liberal professions (Freie Berufe), such as architects, lawyers, or doctors, do not exercise a “trade” (Gewerbe). Therefore, they can never be merchants under § 1 HGB. This means that the strict commercial duties, especially the duty to inspect and notify under § 377 HGB, never apply to them, even if they make purchases for their business.

Topic 2: Product Liability Law (ProdHaftG)

• Although L cannot claim damages from the retailer T due to lack of fault, L could potentially sue the manufacturer of the espresso machine under the Product Liability Act (ProdHaftG). Under § 1 ProdHaftG, the manufacturer is strictly liable (without fault) for property damage caused by a defective product. However, under § 1 I 2 ProdHaftG, property damage is only covered if the damaged item is ordinarily intended for private use and was mainly used privately by the injured person. Since L used the desk in his architecture office, it might be classified as commercial property, which would exclude a claim under the ProdHaftG. He would then have to rely on tort law (§ 823 I BGB) against the manufacturer.

Write-Up

Question a: Contract Formation

Issue: Was a valid sales contract concluded for EUR 1,100?

Rule: Under § 433 BGB, a sales contract requires two matching declarations of intent: an offer (§ 145 BGB) and an acceptance (§ 147 BGB). Under § 150 II BGB, an acceptance that contains additions, limitations, or other alterations is deemed to be a rejection of the original offer combined with a new offer. An offer can be accepted expressly or implicitly through conclusive conduct.

Application: L’s email on 5th of May constituted a binding offer to purchase the machine for EUR 1,000. T’s reply on the next day did not accept this offer, but rather changed the essential term of the price to EUR 1,100. Under § 150 II BGB, this constitutes a rejection of L’s offer and a new offer by T to sell the machine for EUR 1,100. L received this new offer. By transferring the exact requested amount of EUR 1,100 to T’s bank account, L objectively demonstrated his intention to accept the new terms, despite his subjective failure to read the email properly. This conclusive conduct constitutes a valid acceptance of T’s new offer.

Conclusion: Yes, a valid sales contract was concluded for EUR 1,100.

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Question b: Validity of the AGB Clause

Issue: Is T’s standard term limiting the warranty to 1 month valid?

Rule: Standard terms and conditions (AGB) are subject to content control under §§ 307-309 BGB. Since L is an architect buying for his office, he acts as an entrepreneur (§ 14 BGB). Under § 310 I BGB, the specific prohibitions of §§ 308, 309 BGB do not apply to AGB used against entrepreneurs. However, the general clause of § 307 BGB remains applicable. Under § 307 I, II No. 1 BGB, provisions in standard terms are void if they unreasonably disadvantage the contractual partner contrary to the requirements of good faith, especially if they deviate from essential basic principles of the statutory rule from which they diverge.

Application: The statutory warranty period for the sale of new goods is 2 years (§ 438 I No. 3 BGB). While B2B contracts allow for more flexibility than B2C contracts (where a reduction below 1 year for used goods or 2 years for new goods is strictly prohibited under § 476 BGB), a reduction to a mere 1 month for a new technical device practically hollows out the seller’s statutory liability for defects. This deprives the buyer of essential rights inherently linked to a sales contract (§ 433 I 2 BGB). Such a drastic deviation from the statutory model is an unreasonable disadvantage under § 307 II No. 1 BGB.

Conclusion: The AGB clause is invalid. The statutory warranty period applies.

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Question c: Buyer’s Remedies under the BGB

Issue: Can L demand repair of the machine and EUR 500 for the desk from T under § 437 BGB?

Rule: Under § 437 No. 1 BGB, the buyer can demand cure (§ 439 BGB) if there is a material defect (§ 434 BGB) at the passing of risk (§ 446 BGB). Under § 437 No. 3 BGB in conjunction with § 280 I BGB, the buyer can claim damages for consequential harm caused by a defect. A claim under § 280 I BGB requires an obligation, a breach of duty, damages, causation, and fault (intent or negligence, § 276 BGB).
For transactions between merchants, § 377 HGB requires immediate inspection and notification of defects; otherwise, rights are lost.

Application:

1. Defect: The machine had a hidden manufacturing defect present when it left the factory, meaning it lacked the customary quality for espresso machines (§ 434 III No. 2 BGB) at the passing of risk (§ 446 BGB).
2. § 377 HGB Applicability: T is a merchant (GmbH, § 6 HGB). However, L is a freelance architect. Freelance professions (Freie Berufe) do not qualify as commercial trades (Gewerbe). Therefore, L is not a merchant under § 1 HGB. The commercial inspection duty under § 377 HGB does not apply, and L has not lost his rights.
3. Repair (Cure): Under § 439 I BGB, L can demand repair. The repair costs only EUR 50, which is not disproportionate (§ 439 IV BGB). Thus, T is obligated to repair the machine.
4. Damages (Desk): L claims EUR 500 for the desk. Delivering a defective machine is a breach of the sales contract. However, under § 280 I 2 BGB, damages are only awarded if the debtor is responsible for the breach (fault principle). Under § 276 BGB, a person is responsible for intent and negligence. Negligence is the failure to exercise ordinary care. T is a retailer. Retailers are not generally expected to open sealed manufacturer boxes and technically test complex electrical appliances for hidden defects before reselling them. Since the defect was hidden, T did not act negligently by failing to discover it. Because T acted without fault, T is not liable for the consequential damage to the desk under contract law.

Conclusion: L can demand the repair of the machine from T, but he cannot demand the EUR 500 compensation for the damaged desk.