The VII Civil Senate of the Federal Court of Justice, which is responsible, among other things, for the law on contracts for work and services, has ruled that certain liability limitation clauses commonly used in the textile cleaning trade are invalid.
The defendant textile cleaning association drafted so-called "Delivery Conditions of the German Textile Cleaning Trade" (hereinafter: Conditions), which constitute a recommendation to textile cleaning companies for the formulation or use of General Terms and Conditions (AGB). The defendant notified these conditions to the Federal Cartel Office as a so-called "recommendation on conditions" and they were published in the Official Gazette.
No. 5 of the Terms and Conditions contains the following provisions regarding the limit of liability:
"The textile cleaner is liable for the loss of the cleaning goods unlimited in the amount of the current value. For processing damage, the textile cleaner is liable only in the case of intent or gross negligence unlimited in the amount of the current value. Otherwise, the liability is limited to 15 times the processing price.
Attention:
Our liability may be limited to 15 times the processing price (see No. 5 GTC). However, you can agree unlimited liability in the amount of the current value, e.g. by taking out insurance."
The plaintiff Federal Association of Consumer Centres and Consumer Associations considers these provisions to be invalid pursuant to §§ 307 et seq. BGB (German Civil Code) and therefore claims against the defendant pursuant to § 1 of the German Injunctions Act (Unterlassungsklagengesetz - UKlaG) for the recommendation of these terms and conditions for inclusion in contracts for the cleaning of textiles with consumers.
The District Court and the Court of Appeal upheld the claim.
The Federal Court of Justice rejected the appeal lodged by the textile cleaning association. In its reasoning, it stated that the first two sentences of the clause were invalid due to a violation of Section 309 No. 7b of the German Civil Code (BGB), as they limit the liability of the cleaning business for damages to the cleaned goods caused by intent or gross negligence to their current value. This term can be interpreted to mean that, contrary to statutory provisions, the damage is not compensated for the full replacement value.
The clause, which limits liability to 15 times the cleaning price in cases of slight negligence causing damage to the cleaned goods, unduly disadvantages the customer contrary to the principles of good faith and is invalid under Section 307 (1) sentence 1 of the German Civil Code (BGB). The cleaning price does not constitute a suitable benchmark for limiting liability, as it bears no relation to the potential extent of the damage. The option of purchasing insurance, to be paid for by the customer, does not represent adequate compensation, as the clause cannot ensure that the cleaner explicitly informs the customer verbally about this option in every necessary instance.
Judgment of the Federal Court of Justice of July 4, 2013 – VII ZR 249/12
Lower Courts:
Cologne Regional Court - 26 O 70/11 - Judgment of February 8, 2012
Cologne Higher Regional Court - 6 U 54/12 - Judgment of august 10, 2012
Source: Press Release of the Federal Court of Justice
Goldberg Attorneys at Law 2013
Attorney Michael Ullrich, LL.M. (Information Law)
Specialist Attorney for Information Technology Law
Email: info@goldberg.de
