Germany, Noerr LLP updates

Franchising

Contributed by Noerr LLP
For want of an asterisk: regional court scrutinises franchisor's TV advertising
  • Germany
  • 15 January 2019

The Munich Regional Court I recently established a new precedent for competition restriction, which is prohibited in franchising systems under the Act against Restraints on Competition. The court found references to "participating restaurants" in a franchisor's TV advertising insufficient and in violation of the price maintenance prohibition. This decision deserves special attention as it relates to advertising with non-binding price recommendations, which is common among franchisors.

Admissibility of lawsuit despite effective mediation clause in franchise agreement
  • Germany
  • 02 October 2018

A recent Hamburg Regional Court decision is generally understood to have solidified the first franchise-related court judgment on bad faith regarding mediation clauses rendered by the Saarbruecken Higher Regional Court in 2015. However, at second glance, the Hamburg judgment provides a different reasoning for bad faith regarding a mediation objection and might therefore serve as a new application of bad faith in future franchise-related court proceedings regarding mediation clauses.

Requirements for interim injunction to enforce obligation to operate business
  • Germany
  • 06 February 2018

The Bochum Regional Court recently looked at whether a franchisee's contractual obligation to operate a business can be enforced by way of an interim injunction. To grant an interim injunction to enforce the obligation to keep the business open, it must be demonstrated that the franchisor faces serious losses at least equivalent to a threat to its survival or to drawbacks that cannot later be remedied.

No compensation claim for franchisee where franchisor must block customer data when agreement terminated
  • Germany
  • 24 October 2017

The Federal Court of Justice recently ruled that an authorised dealer, such as a franchisee, has no compensation claim in analogous application of the regulation governing sales representatives contained in the Commercial Code if the franchisor is contractually obliged to block the customer data provided to it by the franchisee, to discontinue using it and to delete it at the request of the sales intermediary when the contract is terminated.

No significant obstruction to advertising franchise systems
  • Germany
  • 04 April 2017

The Federal Court of Justice recently criticised a franchising advertising flyer in terms of competition law. One interpretation of this judgment is that it makes the advertising of franchise systems significantly more difficult. However, this point of view does not ultimately do justice to the decision, as the judgment does not fundamentally question the typical advertising of franchise systems.


Real Estate

Contributed by Noerr LLP
Formal requirements on agreements to amend real estate purchase contracts after conveyance
  • Germany
  • 16 November 2018

Federal Court of Justice case law suggests that the parties to a real estate purchase contract can in principle immediately change its content without having to comply with notarial form requirements after the notarial certification of the real estate purchase contract containing the conveyance has been concluded. The court's recent decision in this regard is to be welcomed in the interests of the continuity of its case law and in view of the lower courts' increasingly inconsistent case law in the past.

New RETT rules for share deals
  • Germany
  • 06 July 2018

The Ministers of Finance of the Federal States recently agreed on new real estate transfer tax (RETT) rules for share deals. According to official press releases, a fundamental RETT reform that had been previously discussed was not agreed. Rather, the agreement consists of new RETT rules regarding share deals with a lower threshold, longer holding periods and aligning the rules that are applicable to corporations with those that already apply to partnerships.

Sale of real estate by special purpose vehicles
  • Germany
  • 20 April 2018

Transaction structures involving special purpose vehicles, whose main assets after completion of the purchase process consist only of the purchased real estate, are often chosen in Germany. Such structures are used in particular to shield from liability, so that third-party access to the special purpose vehicle's assets is limited. They are also used to facilitate a sale without incurring real property transfer tax for the exit.

Impending terminability of land use agreements for energy plants
  • Germany
  • 08 December 2017

The operation of energy plants usually means securing the required land long term by way of a use agreement. Prematurely ending a use agreement can substantially reduce the profitability of investments in energy plants. Defects in the written form of use agreements therefore constitute a risk for such investments. However, the Federal Court of Justice has decided that written form remedy clauses are invalid and do not prevent a contracting party from terminating a use agreement by invoking a written form defect.

Rental agreement termination for landlord's own use – new case law
  • Germany
  • 16 June 2017

A landlord can terminate a rental agreement for residential premises if he or she has a justified interest in ending the lease. Two recent Federal Court of Justice decisions provide clarification regarding a landlord's needs as grounds for termination. While the change in case law regarding the legal consequences of a breach of the duty to offer is welcome, the judgments also show that there is no one-size-fits-all answer to the question of whether termination due to a landlord's needs can be declared valid.


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