CHAPTER IV Commercial Acts

Author:Martin Wolff
Profession:Sir
Pages:251
 
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SECTION XXXIII - INTRODUCTION - CONCLUSION OF COMMERCIAL CONTRACTS

  1. The concept of commercial acts has been explained, see above section IX.

    They are acts performed by a merchant and pertaining to his enterprise.

    It may be remembered that, generally speaking, the same rules are applicable to commercial as to non-commercial acts. Only on particular points, not connected inter se, have special rules been established for commercial acts.

    The conclusion of commercial contracts is one of these points.

  2. Special rules of commercial law exist in respect of suretyship contracts, of 'abstract' promises and ' abstract' documents of debt (see on these terms in general Part I, para. 134 above). According to the BGB (sections 766, 780, 781), all these contracts need a written declaration. But if the suretyship is commercial on the part of the surety, and if those abstract engagements are commercial on the part of the debtor, no formality need be observed; section 350 HGB.

  3. Under ordinary civil law a contract demands an offer and its acceptance;

    if the offeree neither accepts nor declines but remains silent, there is no contract. Where however the offer concerns the management of the offeror's affairs and the offeree is a merchant whose business includes such management of another person's affairs, or who has declared his willingness to undertake such management, and if he does not answer the offer, his silence is regarded as acceptance; section 362 HGB.

    EXAMPLES: (1) The banker or broker B is asked by A to sell for him certain securities, which A has annexed to his letter. B remains silent. The mandate is valid, and if B does not try to sell the securities, he has broken a valid contract. (2) The merchant M, a professional dealer in pianos, receives from X the offer to sell him a specified piano for a certain price.

    M does not answer the offer. There is no contract.

    SECTION XXXIV - THE CONTENT OF COMMERCIAL OBLIGATIONS

  4. Only a very few rules of commercial law deal with the content of obligations. According to the BGB (section 276) a debtor is bound to use such care as is necessary in ordinary usage. The commercial code

    demands from the debtor-merchant the care of a 'careful merchant' (section 347) or of a 'careful businessman' (section 202 HGB, section 84 Companies Act), and in the case of a contract of carriage or affreightment the care of a 'careful carrier' (section 429 HGB). In practice there is no great difference between the BGB formula and the formula chosen by the commercial code. For in order to determine what care is 'necessary in ordinary usage ', one would obviously be guided by the degree of care which would be exercised by a careful man of a particular profession.

  5. According to the BGB section 343 the court may reduce any contractual penalty which it finds excessively high and replace it by a proper amount.

    This does not apply if the promisor of the penalty is a 'full merchant' and has made the promise in the exercise of his profession; section 348, 351 HGB.

  6. According to the BGB the statutory interest on a debt is 4 per cent. (section 246). The commercial code replaces this by 5 per cent., if the duty to pay interest is based either on a rule of the commercial code or on a contract which is commercial on the part of both the creditor and the debtor; section 352 HGB.

  7. Under civil law statutory interest on a debt is due only if the debtor has delayed payment of the debt. The commercial code (section 353) grants interest from the date when the debt is due, provided the debt results from a contract between merchants pertaining to both their respective enterprises.

  8. The old legal adage 'the merchant does nothing gratuitously' still correctly describes the law. A merchant who in the course of his business manages an affair for another person or performs a service for him can, even without an agreement, ask for a commission or for payment of storage dues; section 354 HGB.

    EXAMPLE: A banker allows one of his customers, who is going away for a holiday, to deposit a trunk filled with valuables. The customer is grateful for the banker's kindness, but he has to pay for it.

  9. Finally a curiosity: In German the term 'eight days' (acht Tage) means a week, seven days. In commerce however the term is strictly used.

    Eight days are eight days; section 359 HGB.

    SECTION XXXV - OWNERSHIP AND PLEDGE OF COMMODITIES

  10. The transfer of ownership of movables is regulated in the BGB. Under German law, unlike English and French law, an agreement on the passing of ownership, e.g. by sale, is not sufficient; it must be accompanied by delivery. A mere agreement is sufficient only if the purchaser is already in possession of the goods, for example as depositary, or if a third party possesses the goods. If, on the other hand, the owner intends to remain in possession, e.g. as a borrower or as any other kind of bailee, an agreement as to the bailment may replace delivery; sections 929-931 BGB, for further details see Part I, Chapter IV, section IV above.

  11. If the transferor is not the owner of the goods, the transferee nevertheless becomes owner, provided he was in good faith; the rule of English law ' nemo dat quod non habet ' does not apply under German law, which on this point has adopted the principle of French law; sections 932-35

    BGB, see Part I, para. 362 above. There are however two differences between German civil and commercial law in respect of the concept of ' good faith '.

    (a) According to the BGB the transferee is in bad faith if it is known to him, or unknown only in consequence of his own gross negligence, that the thing 'does not belong to the transferor '; section 932, subsection 2. If however he acquires it from a merchant in the course of the latter's commercial business, he is protected in the belief that the transferor, without being the owner, 'is entitled to dispose of the thing '; section 366 HGB, see Part I, para. 362b above.

    EXAMPLE: The banker B sells to P securities belonging to his customer C, who has deposited them with B. The purchaser P knows that B is not the owner of the securities. But P believes without negligence that B is executing a mandate given to him by one of his customers, and that B is therefore entitled to sell and transfer the securities. P acquires ownership.

    This rule is indispensable in intercourse between bankers and brokers.

    The person who buys securities from a banker must know, and always knows, that probably the banker is not the owner; practically all sales of securities by bankers are made on customers' instructions.

    (b) Whether or not the purchaser has acted with 'gross' negligence depends on the circumstances of the transaction. A banker however, who acquires a negotiable instrument to bearer (a bond, a bearer share), which has been stolen from or lost by the owner, does not acquire ownership if the loss of the instrument has been published in the Amtlicher-Anzeiger (official gazettes), issued by the various Linder governments for their respective territories during the current or previous year; section 367 HGB.

  12. The pledge in respect of movable property is dealt with by the BGB, see Part I, Chapter IV, section V above. It should be noted that merchants seldom use the term ' pledge' (Pfand); they prefer less precise expressions, such as security (Sicherheit), deposit (Depot), ' Lombard ', ' Deckung', (cover), ' Unterlage ' (backing).

    Particular rules of commercial law on pledges are:

    (a) The rules on the concept ' good faith' in cases where the pledger is not owner of the goods are the same as those regulating acquisition of ownership; sections 366, 367 HGB.

    (b) The commercial code recognizes a large number of statutory rights of pledge. The 'Kommissionir ' (factor), the forwarding agent (Spediteur), the warehouseman (Lagerhalter) and the carrier have statutory pledges in respect of the goods received from or for the other party, in order to secure their rights to commissions or other fees and expenses; sections 397, 410, 421, 440 HGB. These pledges come into existence ipsa lege; no agreement is necessary for their creation. They are valid even if the debtor is neither the owner of the goods nor entitled to dispose of them, provided the creditor is in good faith; section 366, subsection 3.

    (c) A curious rule exists with regard to their rank: section 443 HGB.

    Pledges arising from sending or carrying goods (that is, pledges of forwarding agents or carriers) must be distinguished from those pertaining to a factor or warehouseman. The first named pledges enjoy a better rank than those of the second group; and among the rights of the first group the younger right is better than the older. The reason for this is: persons who have sent or transported things to their destination (or at least nearer to it), and who thereby have helped to increase their value, deserve to have a stronger position than other creditors.

    EXAMPLE: A in X has sold goods which are stored in W's warehouse, to B in Z. On A's order the forwarding agent D fetches the goods and delivers them to the carrier C in order to have them transported to the buyer B in Z, via Y. The carrier C transports them from X to Y and there engages a

    second carrier S, who carries the goods from Y to their destination in Z.

    Four pledges have come into existence in respect of the claims for storing, sending, and carrying. The claims of D, C, and S are better than W's claim, and among them the pledges rank as follows: first, S's pledge;

    second, C's pledge; third, D's pledge. W's pledge has the lowest rank of all.

    SECTION XXXVI - THE COMMERCIAL LIEN

  13. The commercial lien (right of retention) differs from the civil right of retention (see on this: section 273 BGB and Part I, para. 210 above) both in regard to its requirements and its effects; sections 369-72 HGB.

  14. Its requirements are as follows:

    (a) There must be a claim (which is to be secured by the lien). The claim must belong to a merchant as against a...

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