Book2 Chapter02 Title02

From Reference Codes BGB of 1896
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GERMAN CIVIL CODE OF 1896

  • Based on the English Translation by: Wang, Chung Hui (1907). The German Civil Code, translated and annotated with historical introduction and appendices. London: Stevens and Sons. [available on Archive.org]

BOOK II. Law of Obligations.

Chapter II. Obligations Ex Contractu.

Title II. Mutual Contract.

Section 320.
  • [I] A person who is bound by a mutual contract may refuse to perform his part until the other party has performed his part, unless the former is bound to perform his part first. If the performance is for the benefit of several persons, the part due to one of them can be refused until the entire counter-performance has been effected. The provision of 273, par. 3, does not apply.
  • [II] If one party has partially performed his part, counter-performance may not be refused if the refusal under the circumstances, ¢.g., on account of the relative insignificance of the part not performed, would constitute bad faith.
Section 321.
  • A person who is bound by a mutual contract to perform his part first may, if after the conclusion of the contract a serious change for the worse in the financial circumstances of the other party comes about whereby the claim for the counter-performance is endangered, refuse to perform his part until the other party has performed his part or given security for it.
Section 322.
  • [I] If one party brings an action for the performance due to him under a mutual contract, the enforcement of the right in the other party to refuse performance until the counter-performance has been effected has only the effect that judgment is to be delivered against the latter for contemporaneous performance.
  • [II] If the party bringing the action has to perform his part first he may, if the other party is in default of acceptance, bring an action for performance after receipt of the counter-performance.
  • [III] The provision of 274, par. 2, applies to compulsory execution.
Section 323.
  • [I] If the performance due from one party under a mutual contract becomes impossible in consequence of a circumstance for which neither he nor the other party is responsible, he loses the claim to counter-performance; in case of partial impossibility the counter-performance is diminished in conformity with 472, 473.
  • [II] If the other party demands delivery under 281 of the substitute received for the object owed, or assignment of the claim for compensation, he remains bound to effect the counter-performance; this is diminished, however, in conformity with 472, 473, in so far as the value of the substitute or of the claim for compensation is less than of the value of the performance due.
  • [III] If the counter-performance has been effected which according to these provisions was not due, the value of the performance effected may be demanded back under the provisions relating to the return of unjustified benefits.
Section 324.
  • [I] If the performance due from one party under a mutual contract becomes impossible in consequence of a circumstance for which the other party is responsible, he retains his claim for counter-performance. He must, however, deduct what he saves in consequence of release from the performance, or what he acquires or maliciously omits to acquire by a different application of his faculties.
  • [II] The same rule applies if the performance due from one party becomes impossible, in consequence of a circumstance for which he is not responsible, at the time when the other party is in default of acceptance.
Section 325.
  • [I] If the performance due from one party under a mutual contract becomes impossible in consequence of a circumstance for which he is responsible, the other party may demand compensation for non-performance, or rescind the contract. In case of partial impossibility, if he has no interest in the partial performance of the contract, he is entitled, subject to the conditions specified in 280, par. 2, to demand compensation for non-performance of the entire obligation, or to rescind the entire contract. In lieu of the claim for compensation and of the right of rescission he may avail himself of the rights specified for the case provided for by 323.
  • [II] The same rule applies in the case provided for by 283, if the performance is not effected before the expiration of the period, or if at that time it is in part not effected.
Section 326.
  • [I] If, in the case of a mutual contract, one party is in default in respect of the performance due from him, the other party may allot him a fixed reasonable period for performing his part with a declaration that he will decline the performance after the expiration of the period. After the expiration of the period he is entitled to demand compensation for non-performance, or to rescind the contract, if the performance has not been effected in due time; the claim for performance is barred. If the performance is in part not effected before the expiration of the period, the provision of 325, par. 1, sentence 2, applies mutatis mutandis.
  • [II] If, in consequence of the default, the performance of the contract is of no use to the other party, such other party has the rights specified in par. 1 without the fixing of a period being necessary.
Section 327.
  • The provisions of 346 to 356 applicable to the contractual right of rescission apply mutatis mutandis to the right of rescission specified in 325, 326. If the contract is rescinded on account of a circumstance for which the other party is not responsible, such other party is liable only under the provisions relating to the return of unjustified benefits.