References without law book default to BGB.

Case - Toilet Paper Error

Facts

Mycroft (M) intends to buy 400 rolls of toilet paper for EUR 1 each for his hotel. He writes an e-mail to wholesaler Conrad (C). Unfortunately, he is a little distracted while putting in the order. His e-mail states that he wants to buy 40,000 rolls of toilet paper. C is pleased, sends a quick confirmation e-mail to M, and rents a truck for the delivery.

When checking his sent e-mails a few hours later, M discovers his error. He gives C a call immediately and explains the situation. He clarifies to C that he does not want 40,000 rolls of toilet paper.

However, C insists on delivering (and being paid for) 40,000 rolls. At the very least, he wants compensation for renting the truck. What is the legal situation?

Solution

Slides Solution

Issue I: Payment for 40,000 rolls

• Issue: Does M have to pay the purchase price for 40,000 rolls to C in line with § 433 II BGB?
• Rule: To avoid a contract, there needs to be (1) a contract, (2) a reason for avoidance, (3) a declaration of avoidance, and (4) within the specified period.
• Application:
  • 1. Contract: Is there a valid contract?
    • M’s offer (§ 145 BGB): Objective understanding of the recipient is 40,000 rolls. Divergent will is irrelevant to the formation of the contract!
    • C’s acceptance (§ 147 BGB): 40,000 rolls; confirmation via e-mail.
    • → (+), valid sales contract (§ 433 BGB) for 40,000 rolls.
  • 2. Reason for Avoidance:
    • § 119 I Alt. 1 BGB (Relevant mistake about the content/meaning)? → (-), the meaning of “40,000 rolls” is clear; M was not mistaken about the meaning of the DoI.
    • § 119 I Alt. 2 BGB (Relevant mistake in making a DoI with such content)? → (+), mistyping (40,000 rolls instead of 400 rolls).
  • 3. Declaration of Avoidance (§ 143 I BGB): → (+), M called C and declared avoidance (interpretation via §§ 133, 157 BGB).
  • 4. Within the period: Without undue delay (§ 121 I BGB)? → (+), as soon as M realized his mistake.
  • → Sales contract is void (§ 142 BGB).
• Conclusion: M does not need to pay for 40,000 rolls of toilet paper.

Issue II: Compensation for the truck

• Issue: Can C claim compensation from M in line with § 122 I BGB?
• Rule: For such a claim, there needs to be (1) a voided DoI, (2) damages as a result of the other party relying on the DoI, and (3) no exception under § 122 II BGB present.
• Application:
  • 1. Avoided DoI (§ 119 or § 120 BGB): → (+), see above.
  • 2. Damage incurred by relying on validity: → (+), truck rental costs.
  • 3. No knowledge/negligent ignorance of voidability (§ 122 II BGB): → (+), C could not and did not know about the error.
• Conclusion: C can claim compensation from M for the rental costs in line with § 122 I BGB.

Write-Up

Issue: Can C demand payment for 40,000 rolls from M pursuant to § 433 II BGB, and can C claim compensation for the truck rental costs from M pursuant to § 122 I BGB?

I. Claim for the purchase price

Issue: Can C demand payment for 40,000 rolls from M pursuant to § 433 II BGB?

Rule: A valid sales contract under § 433 II BGB requires two matching declarations of intent. However, a contract may be avoided (angefochten) under § 142 I BGB, rendering it void ab initio. Avoidance requires a reason for avoidance (such as a mistake in declaration under § 119 I Alt. 2 BGB), a declaration of avoidance (§ 143 I BGB), and adherence to the statutory period (§ 121 I BGB).

Application:
M sent an email offering to buy 40,000 rolls. From the perspective of an objective recipient (§§ 133, 157 BGB), M intended to buy 40,000 rolls. M’s internal divergent will is irrelevant to contract formation. C accepted this offer via email. Thus, a valid sales contract for 40,000 rolls was initially formed.

1. Reason for Avoidance: M did not make a mistake regarding the meaning of the words used (§ 119 I Alt. 1 BGB); he knew what “40,000” meant. Instead, M made a mechanical mistake (a typo) when entering the numbers into his email. This constitutes a mistake in the declaration itself (Erklärungsirrtum) under § 119 I Alt. 2 BGB.

2. Declaration of Avoidance: Under § 143 I BGB, avoidance must be declared to the other party. M called C and clarified he did not want the 40,000 rolls. Interpreted objectively, this expresses his intent to invalidate the transaction due to a mistake.

3. Period: Under § 121 I BGB, avoidance must be declared “without undue delay” (unverzüglich) after the person discovers the mistake. M called C immediately a few hours later upon seeing the sent email, satisfying this requirement.

Conclusion: M successfully avoided his declaration of intent. Consequently, the contract is deemed void ab initio (§ 142 I BGB), and C has no claim for the purchase price.

II. Claim for compensation (reliance damages)

Issue: Can C claim compensation for the truck rental costs from M pursuant to § 122 I BGB?

Rule: Under § 122 I BGB, if a declaration of intent is avoided under § 119 BGB, the declaring party must compensate the other party for the damage suffered as a result of relying on the validity of the declaration (reliance damages), provided the other party did not know or negligently fail to know of the voidability (§ 122 II BGB).

Application: M’s declaration was avoided under § 119 I Alt. 2 BGB. C relied on the validity of the contract by renting a truck, incurring damages. This reliance damage must be compensated. Furthermore, C is not excluded from claiming damages under § 122 II BGB because he neither knew nor negligently failed to know of the voidability of M’s declaration; receiving large orders for a hotel is not inherently suspicious.

Conclusion: C has a valid claim against M for the compensation of the truck rental costs under § 122 I BGB.