Switzerland, BADERTSCHER Rechtsanwälte AG updates

Company & Commercial

Contributed by BADERTSCHER Rechtsanwälte AG
Shareholders' agreements for closely held companies under Swiss law
  • Switzerland
  • 13 November 2017

Shareholders of closely held companies often mutually agree on additional contractual rights and duties. However, the company itself cannot be a contract party to a separate shareholders' agreement. Apart from that legal restriction, such shareholders' agreements usually benefit from the contractual freedom of the parties. A recent Federal Court decision confirmed that such agreements may be recharacterised as abusive or contrary to the principle of good faith.

Interpretation of company articles in Sika takeover battle
  • Switzerland
  • 22 May 2017

A recent Zug Cantonal Court decision sheds light on the way that Swiss company articles of association must be interpreted under Swiss company law in cases in which they are not only applicable internally among a few shareholders, but also have an effect on third parties. The decision confirms that the observation of merely the letter and not the spirit of company articles by a company board or majority company shareholders in a general meeting can even amount to an abuse of law.

New Federal Court decision on business judgement rule
  • Switzerland
  • 05 September 2016

A recent Swiss Federal Court decision clarified the circumstances under which the personal liability of board members or managers of a Swiss company for their business decisions and omissions can be reduced by applying the so-called 'business judgement' rule or, if the related prerequisites are not met in a particular case, based on other grounds.

Defects in company organisation caused by deadlock
  • Switzerland
  • 07 March 2016

The Federal Supreme Court recently clarified how to deal with defects in company organisation caused by deadlock between two equal shareholders. For the first time the court has confirmed that courts are authorised to order a share auction in such cases. However, it is strongly recommended that such a harsh outcome be avoided by installing suitable measures to solve conflicts from the outset.

New anti-money laundering rules affect bearer shares in Swiss companies
  • Switzerland
  • 12 October 2015

On July 1 2015 a new regime for bearer shares in Swiss companies was enacted, introducing new legal obligations for company boards and shareholders and severe penalties for cases of non-compliance. To achieve transparency the Code of Obligations established a general duty for all owners of bearer shares in non-listed Swiss companies to disclose their ownership, identity and address to the company within one month of their acquisition.


Franchising

Contributed by BADERTSCHER Rechtsanwälte AG
Franchise agreements – pre-contractual information requirements
  • Switzerland
  • 28 July 2015

Before the conclusion of a new franchise agreement, franchisors usually have more knowledge than franchisees about the particular franchise. A franchisee thus risks entering into a permanent binding contract without an accurate prior assessment of the consequences. To counterbalance this information asymmetry, certain duties of care are imposed, of which the franchisor's pre-contractual information obligations are paramount.

A guide to franchise standard form agreements
  • Switzerland
  • 17 February 2015

Standard form agreements are used regularly in franchising. In principle, contractual freedom applies to such standard form agreements. However, the franchisor must keep in mind certain aspects before submitting a standard form agreement to the franchisee for signing.

Effect of cartel law on franchising
  • Switzerland
  • 22 July 2014

For the drafting and implementation of franchise agreements, it is paramount for parties to respect the boundaries of the Act on Cartels and Other Competition Restraints. In all cases, franchisees must ensure that their prices are set independently and franchisors must not restrict passive sales by one franchisee in any market assigned to another franchisee.

Distinction between subordination franchise and cooperative franchise
  • Switzerland
  • 04 March 2014

Courts must determine whether each franchise relationship is based on all its economic characteristics, or whether it is a partnership franchise or a subordination franchise. A recent court decision provides detailed guidance on how franchise sys­tems may be structured from a business perspective, with a view to avoiding any uncertainty to legal characterisation alternatives.


Insurance

Contributed by BADERTSCHER Rechtsanwälte AG
Insurers' contractual obligations in case of fraudulent claims
  • Switzerland
  • 25 September 2018

Under the Insurance Contract Act, insurers are not bound by a contract if, for deception purposes, the insured party incorrectly notifies or conceals facts from the insurer which would exclude or reduce the insurer's obligation to provide indemnification. Insurers can therefore refuse payment and withdraw from such contracts. The Federal Supreme Court recently confirmed this to be true even if an insured party does not make false statements directly to the insurer, but rather to a medical doctor who confirms their inability to work.

Right of recourse in insurance law: end of Gini/Durlemann practice
  • Switzerland
  • 26 June 2018

The Supreme Court recently abandoned its long-standing practice of restricting recourse under the Gini/Durlemann doctrine, which was first adopted in 1954. The court held that any non-contractual liability falls within the meaning of 'prohibited act', including all facts standardised as hazardous or simple causal liability. Private insurers must therefore be treated the same as social insurance carriers with respect to the causally liable party that causes an accident.

Supreme Court: scope of full and final settlement clause in insurance matters
  • Switzerland
  • 27 February 2018

The Supreme Court recently dealt with the scope of a full and final settlement clause in an insurance matter. The decision confirms the rules for interpreting settlement agreements in insurance matters and emphasises the importance of carefully drafting the wording of such agreements if they are intended to be full and final settlement agreements of certain insurance claims.

Is surveillance of insured parties lawful?
  • Switzerland
  • 24 October 2017

The European Court of Human Rights recently concluded that Switzerland violated Article 8 of the European Human Rights Convention due to surveillance of an insured party. The case brings uncertainty regarding the extent of observation under Swiss law. Article 8 guarantees the fundamental right to respect private and family life. In its statement, the court held that Swiss federal law offers no precise legal basis for photo and video surveillance of insured parties.

Triggering event for insurance benefits in loss of earnings insurance
  • Switzerland
  • 23 May 2017

In the context of loss of earnings insurance, the Federal Supreme Court recently had to decide whether sickness or the inability to work due to the respective sickness constitutes an insured event and therefore triggers the insurer's duty to provide insurance benefits. The court abandoned its existing case law in which it had appraised the sickness as a primary event for the determination of when the insured event had occurred.


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