Last Updated on June 27, 2021 by LawEuro
German Civil Code (BGB) German law
Title 12
Mandate, contract for the management of the affairs of another and payment services
Subtitle 1
Mandate
Section 662
Typical contractual duties in a mandate
By accepting a mandate, the mandatary agrees to carry out a transaction entrusted to him by the mandator for the mandator gratuitously.
Section 663
Duty to notify when rejecting
A person who is officially appointed to perform certain transactions or who has publicly offered to do so is obliged, when he does not accept a mandate to perform such transaction, to notify the mandator of the refusal without undue delay. The same applies if someone has offered to perform certain transactions in regard to the mandator.
Section 664
Non-transferability; liability for assistants
(1) In case of doubt the mandatary may not transfer the performance of the mandate to a third party. If the transfer is permitted, then he is only liable for fault in connection with the transfer. He is liable under section 278 for fault on the part of an assistant.
(2) In case of doubt, a claim to the performance of the mandate is not transferable.
Section 665
Deviation from instructions
The mandatary is entitled to deviate from the instructions of the mandator if he may assume in the circumstances that the mandator would approve of such deviation if he were aware of the factual situation. The mandatary must make notification to the mandator prior to such deviation and must wait for the decision of the latter unless postponement entails danger.
Section 666
Duty of information and duty to render account
The mandatary is obliged to provide the mandator with the required reports, and on demand to provide information on the status of the transaction and after carrying out the mandate to render account for it.
Section 667
Duty to return
The mandatary is obliged to return to the mandator everything he receives to perform the mandate and what he obtains from carrying out the transaction.
Section 668
Interest on money spent
If the mandatary spends money for himself that he must return to the mandator or spend for the mandator, then he is obliged to pay interest on it from the time of spending onwards.
Section 669
Duty of advance payment
For expenses necessary to perform the mandate, the mandator must upon demand make advance payment to the mandatary.
Section 670
Reimbursement of expenses
If the mandatary, for the purpose of performing the mandate, incurs expenses that he may consider to be necessary in the circumstances, then the mandator is obliged to make reimbursement.
Section 671
Revocation; termination
(1) The mandate may be revoked by the mandator at any time and may be terminated by the mandatary at any time.
(2) The mandatary may only give notice in such a manner that the mandator can make other arrangements for the transaction to be carried out, unless there is a compelling reason for premature termination. If he gives premature notice of termination without such a compelling reason, then he must compensate the mandator for the damage thus incurred.
(3) If there is a compelling reason, then the mandatary is entitled to terminate the mandate even if he has waived the right of termination.
Section 672
Death or incapacity to contract of the mandator
In case of doubt, a mandate is not extinguished by the death or incapacity to contract of the mandator. If the mandate is extinguished, then, if postponement entails danger, the mandatary must continue to carry out the transaction transferred until the heir or the legal representative of the mandator can make other arrangements for the transaction to be carried out; to this extent, the mandate is deemed to continue.
Section 673
Death of the mandatary
In case of doubt, the mandate is extinguished on the death of the mandatary. If the mandate is extinguished, then the heir of the mandatary must notify the mandator of the death without undue delay and, if postponement entails danger, must continue carrying out the transaction entrusted to him until the mandator can make other arrangements for the agency business; in this respect, the mandate is deemed to continue.
Section 674
Legal fiction of continuation
If the mandate is extinguished in any other way than by revocation, then it is still deemed to continue for the benefit of the mandatary until the mandatary obtains knowledge of the extinction or ought to have knowledge.
Subtitle 2
Contract for the management of the affairs of another*)
*) Official note: This subtitle serves to implement 1. Directive 97/7/EC of the European Parliament and of the Council of 27 January 1997 on cross-border credit transfers (OJ L 43 of 14 February 1997, p. 25), 2. Articles 3 to 5 of Directive 98/26/EC of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems (OJ L 166 of 11 June 1998, p. 45).
Section 675
Nongratuitous management of the affairs of another
(1) The provisions of sections 663, 665 to 670 and 672 to 674 apply to a service contract or a contract to produce a work dealing with the management of the affairs of another to the extent that nothing else is provided in this subtitle and, if the person obliged is entitled to terminate without complying with a notice period, the provisions of section 671 (2) also apply with the necessary modifications.
(2) A person who gives another person advice or a recommendation, notwithstanding the responsibility that arises from a contractual relationship, a tort or another statutory provision, is not obliged to pay compensation for the damage arising from following the advice or the recommendation.
(3) A contract by means of which one party undertakes to effect the enrolment or registration of the other party to participate in games of chance operated by a third party must be in text form.
Section 675a
Duties to provide information
A person who is officially appointed to manage the affairs of others or publicly offers to do so provides, for regularly occurring standardised business transactions (standard transactions), in writing, or in appropriate cases also electronically, and gratuitously, information on fees and expenses for such transactions, to the extent that a price is not determined in accordance with section 315 or the fees and expenses are subject to binding statutory provisions.
Section 675b
Orders to transfer securities in systems
Participants in securities delivery and invoicing systems can no longer revoke an order whose subject matter is the transfer of securities or of claims to the delivery of securities by way of booking or by other means from the point in time determined by the rules of the system.
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