Last Updated on June 27, 2021 by LawEuro
German Civil Code (BGB) German law
Division 4
Extinction of obligations
Title 1
Performance
Section 362
Extinction by performance
(1) An obligation is extinguished if the performance owed is rendered to the obligee.
(2) If performance is rendered to a third party for the purpose of performing the contract, the provisions of section 185 apply.
Section 363
Burden of proof in the case of acceptance as performance of contract
If the obligee has accepted performance offered to him as performance of contract, he bears the burden of proof if he does not wish to have the performance considered as performance of contract because it was different from the performance owed or because it was incomplete.
Section 364
Acceptance in lieu of performance of contract
(1) The obligation expires if the obligee accepts, in lieu of performance of contract, performance other than that owed.
(2) If the obligor assumes a new obligation to the obligee for the purpose of satisfying the latter, it is not to be assumed, in case of doubt, that he is assuming the obligation in lieu of performance of contract.
Section 365
Warranty in the case of performance in lieu of performance of contract
If a thing, a claim against a third party or another right is given in lieu of performance of contract, the obligor must provide warranty for a legal defect or a material defect of the thing in the same manner as a seller.
Section 366
Crediting of performance to more than one claim
(1) If the obligor owes performance of the same kind to the obligee under more than one obligation, and if what he pays does not suffice to redeem all debts, that debt is redeemed that he determines when he performs.
(2) If the obligor does not make a determination, then the first debt redeemed is the debt due for redemption; among more than one due debt, the one offering the obligee the least security; among more than one equally secure debts, the more onerous one; among more than one equally onerous debts, the oldest debt; and where all are equally old, each debt proportionally.
Section 367
Crediting to interest and costs
(1) If the obligor must pay interest and costs in addition to the principal performance, an act of performance not sufficient to redeem the entire debt is first credited to the costs, then to the interest and finally to the principal performance.
(2) If the obligor determines another method of crediting, the obligee may refuse to accept the performance.
Section 368
Receipt
Upon receiving performance, on demand, the obligee must issue a written acknowledgement of receipt (receipt). If the obligor has a legal interest in having the receipt issued in another form, he may demand issue in that form.
Section 369
Costs of the receipt
(1) The costs of the receipt must be borne and advanced by the obligor, unless the legal relation existing between him and the obligee leads to a different conclusion.
(2) If more than one obligee steps into the shoes of the original obligee as the result of transfer of the claim or by way of inheritance, the extra costs are charged to the obligees.
Section 370
Performance to the bringer of the receipt
The bringer of a receipt is deemed to be authorised to receive the performance to the extent that the circumstances of which the performing party is aware do not stand in the way of assuming such authorisation.
Section 371
Return of the certificate of indebtedness
If a certificate of indebtedness has been issued relating to the claim, the obligor may, besides demanding the receipt, also demand return of the certificate of indebtedness. If the obligee claims to be unable to return it, the obligor may demand an officially certified acknowledgement that the debt is extinguished.
Title 2
Deposit
Section 372
Requirements
Money, securities and other documents as well as valuables may be deposited by the obligor for the obligee with a public authority intended for this purpose if the obligee is in default of acceptance. The same applies if the obligor cannot fulfil his obligation or cannot do so with certainty for another reason that is in the person of the obligee or as the result of uncertainty, not due to negligence, as to the identity of the obligee.
Section 373
Reciprocal and simultaneous performance
If the obligor is obliged to perform only in return for performance by the obligee, he may make the right of the obligee to receive the deposited thing dependent upon the rendering of consideration.
Section 374
Place of deposit; duty to notify
(1) Deposit must be made at the depositary office of the place of performance; if the obligor deposits at any other place, he must compensate the obligee for the damage arising from this.
(2) The obligor must notify the obligee of the deposit without undue delay; in case of failure to do so he is liable in damages. The notice may be omitted if it is impracticable.
Section 375
Retroactive effect with dispatch by mail
If the deposited thing has been dispatched to the depositary office by mail, the deposit has retroactive effect to the date when the thing was put in the mail.
Section 376
Right to take back
(1) The obligor has the right to take back the deposited thing.
(2) Taking back is excluded
1. if the obligor declares to the depositary office that he waives the right to take back,
2. if the obligee declares his acceptance to the depositary office,
3. if the depositary office is presented with a final and absolute judgment handed down in a dispute between the obligee and the obligor which declares the deposit to be lawful.
Section 377
Unpledgeability of the right to take back
(1) The right to take back is not subject to pledge.
(2) If insolvency proceedings are initiated against the assets of the obligor, the right to take back may, for the duration of the insolvency proceedings, not be exercised by the obligor either.
Section 378
Effect of deposit where taking back is excluded
If taking back the deposited thing is excluded, the obligor is freed from his obligation by deposit in the same way as if he had rendered performance to the obligee at the time of deposit.
Section 379
Effect of deposit where taking back is not excluded
(1) If taking back the deposited thing is not excluded, the obligor may refer the obligee to the deposited thing.
(2) As long as the thing is deposited, the obligee bears the risk and the obligor is not obliged to pay interest or provide compensation for emoluments not taken.
(3) If the obligor takes back the deposited thing, the deposit is deemed not to have occurred.
Section 380
Proof of entitlement to receive
To the extent that, according to the provisions applicable to the depositary office, a declaration by the obligor acknowledging this entitlement is required or sufficient for proof of the entitlement of the obligee to receive, the obligee may demand from the obligor the issue of the declaration under the same conditions as those under which he would be entitled to demand performance if the deposit had not occurred.
Section 381
Costs of deposit
The costs of deposit are charged to the obligee to the extent that the obligor does not take back the deposited thing.
Section 382
Extinction of the right of the obligee
The right of the obligee to the deposited amount is extinguished at the end of thirty years after receipt of the notice of deposit, if the obligee does not report to the depositary office before then; the obligor is entitled to take the thing back, even if he has waived the right to take back.
Section 383
Auction of things not capable of deposit
(1) If the movable thing owed is not suitable for deposit, the obligor may in case of default by the obligee have it auctioned at the place of performance and deposit the proceeds. The same applies in the cases set out in section 372 sentence 2, if spoilage of the thing is to be feared or safekeeping is associated with disproportionate costs.
(2) If reasonable success is not expected from an auction at the place of performance, the thing is to be auctioned at another suitable place.
(3) The auction must be performed publicly by a bailiff appointed for the place of auction or other official authorised to conduct auctions or a publicly employed auctioneer (public auction). The time and place of the auction, with a general description of the thing, are to be publicly announced.
(4) The provisions of subsections (1) to (3) do not apply to registered ships and ships under construction.
Section 384
Warning of auction
(1) The auction is permitted only after the obligee has been warned about it; the warning may be omitted if the thing is vulnerable to spoilage and postponement of the auction entails danger.
(2) The obligor must notify the obligee of the auction without undue delay; in the event of his failure to do so, he is liable in damages.
(3) The warning and the notice may be omitted if they are impracticable.
Section 385
Sale by private agreement
If the thing has a stock exchange or market price, the obligor may effect the sale privately at the current price through a commercial broker officially authorised to effect such sales or through a person authorised to sell by public auction.
Section 386
Costs of the auction
The costs of the auction or of the sale under section 385 are borne by the obligee if the obligor does not reclaim the deposited proceeds.
Title 3
Set-off
Section 387
Requirements
If two persons owe each other performance that is substantially of the same nature, each party may set off his claim against the claim of the other party as soon as he can claim the performance owed to him and effect the performance owed by him.
Section 388
Declaration of set-off
Set-off is effected by declaration to the other party. The declaration is ineffective if it is made subject to a condition or a stipulation as to time.
Section 389
Effect of set-off
The effect of set-off is that the claims, to the extent that they correspond, are deemed to expire at the time when they are set against each other as being appropriate for set-off.
Section 390
No set-off against a claim subject to a defence
A claim subject to a defence may not be set off.
Section 391
Set-off with different places of performance
(1) Set-off is not excluded by the fact that the claims are for different places of performance or of delivery. However, the party setting off must compensate for the damage incurred by the other party due to the fact that he does not receive or cannot render performance at the specified place.
(2) If it is agreed that the performance is to take place at a specified time and in a specified place, then it is to be assumed, in case of doubt, that set-off against a claim for which there is another place of performance is to be excluded.
Section 392
Set-off against a seized claim
By the seizure of a claim, the set-off of a claim to which the obligor is entitled in relation to the obligee is only excluded if the obligor acquired his claim after the seizure, or if his claim only became due after the seizure and later than the seized claim.
Section 393
No set-off against a claim in tort
Set-off is not permissible for a claim on the basis of an intentionally committed tort.
Section 394
No set-off against an unpledgeable claim
To the extent that a claim is not subject to pledge, no set-off occurs against the claim. However, contributions owed may be set off against withdrawals to be made from health insurance funds, assistance funds or burial funds, in particular from miners’ provident funds and funds of miners’ providential societies.
Section 395
Set-off against claims of public-law corporations
Set-off is permissible against a claim of the Federal Government or of a Land or against a claim of a municipality or another association of municipalities only if the performance is to be rendered to the same fund from which the claim of the party setting off is to be discharged.
Section 396
More than one claim
(1) If one or another party has more than one claim suitable for set-off, the party setting off may specify the claims that are to be set off against each other. If the set-off is declared without such a specification or if the other party objects without undue delay, the provision of section 366 (2) applies with the necessary modifications.
(2) If the party setting off owes the other party interest and costs in addition to the principal performance, the provision of section 367 applies with the necessary modifications.
Title 4
Forgiveness
Section 397
Contract of forgiveness, acknowledgement of non-indebtedness
(1) The obligation expires if the obligee forgives the obligor the debt by contract.
(2) The same applies if the obligee acknowledges by contract with the obligor that there is no obligation.
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