Private autonomy has a high priority in German law. Therefore, contracts and arrangements are generally valid, and a contract will only be found to be invalid in exceptional circumstances. These include transactions that violate a statutory prohibition, and these contracts are null and void. These are exceptional cases, which affect professional law and principles (for example, it is not permissible to work in a dual capacity as an auditor and a chartered accountant).
A party can generally rescind and reverse a contract if all of the following are met:
The party owing performance has been set a deadline for performance that has not been met.
The party to whom performance is owed is not primarily responsible for such non- or poor performance.
The duty involved is not immaterial in nature (that is, it is not insignificant relative to the contractual duties).
It is important to note that rescission does not prevent claims to damages.
When a breach of contract happens (or at least when a breach is alleged) one or both of the parties may wish to have the contract “enforced” on its terms, or may try to recover for any financial harm caused by the alleged breach.
There are several remedies for breach of contract, such as an award of damages, specific performance, rescission, and restitution. In courts of limited jurisdiction, the main remedy is an award of damages (Sesta 2016).
Breach of contract distinguishes between the following scenarios:
- The distinction, if the debtor does not, late or otherwise, is then irrelevant.
- The debtor can rely on the fact, that no charge may be made to him or his assistants and
- 3 A special defect warranty right is unnecessary in the common law, because it is here only to liability for breach of contract. But also the common law cannot help to take into account possible impediments to performance of the debtor: this does however not during a test of fault, but the question, to what extent the meaning of the Treaty at all, a guarantee was taken over.
Contracts may be ineffective, despite associating agreement. The reasons for such ineffectiveness are above all the legal incapacity (§ 105 BGB), the limited legal capacity (sections 106 et seq.), a lack of any form (§ 125 BGB), a violation of a legal ban on (§ 134 BGB), immorality (§ 138 BGB) or the appeal (§ 142 BGB).