Consulting contract

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As a consulting contract is called the law of obligations in Germany a contract , the advice of a Contracting Party has as its object.

Demarcation

The contracting parties to the advisory contract are the adviser providing information and the adviser seeking advice. Advice is to be distinguished from information and recommendations. Information is the disclosure of facts requested by the inquirer , recommendation is the suggestion of a certain behavior as being in the interests of the person being advised, advice is the explanation of facts including the presentation and evaluation of alternative decisions. The advice includes both a self-assessment by the adviser and - taking into account the personal circumstances of the person being advised - a recommendation that leads to a buy, sell, hold recommendation or other decision by the person being advised.

Legal issues

In German law, the consulting contract is assigned to the law of obligations , which does not recognize it as an independent contract type. However, contractual advisory obligations can be based on legally standardized contract types such as purchase ( §§ 433 ff. BGB ), rent ( §§ 535 ff. BGB), lending ( §§ 598 ff. BGB), lease ( §§ 581 ff. BGB) or loans ( §§ 488 ff. BGB) as main or secondary obligations arise directly for the respective type of contract. However, if the obligation to provide advice is of particular importance , the BGH assumes an independent advice contract and not a secondary obligation from a sales contract. In the case of purchase contracts, the seller has to make sure, analogous to § 447 paragraph 1 BGB, which special needs the buyer has made the basis of his purchase decision, so that he does not acquire a sufficiently usable or even unusable item. The directory assistance or counseling is compulsory for contractual duty during unpaid order ( § 662 BGB) and remunerated management contract ( § 675 para. 1 BGB). The paid agency contract is usually concluded in the form of a service contract if the consulting activity as such is the subject of the contract. If success is owed in exceptional cases and the advice is the subject of the contract, a contract for work is the basis.

The consulting contract does not have to come about through the express conclusion of a contract, but can also arise through implied behavior . It is not tied to any particular form ; Information given over the phone can bring about a consulting contract. The (telephone) information becomes a consulting contract if it is clearly of essential importance for the person being advised and serves as the basis for their dispositions, if the advisor presents himself as a competent person or if it emerges from the circumstances of the individual case that the advisor has his own economic one Is interested in the conclusion of the consulting contract.

A consulting contract is neither formal nor implied if a customer specifically places an order to purchase certain securities that have been recommended by a third party. In this case, there is a lack of special personal contact that could justify the customer's particular trust in the advisory competence of the bank. If the bank informs the advised about their ignorance and the customer does the business anyway, no advisory contract is concluded. The bank does not offer advice to discount brokers, and no advice contract is concluded here either.

species

Depending on the subject of the consulting contract, a distinction is made between different types of consulting contracts:

  • Investment advice : One of the most important advisory contracts is investment advice from credit institutions . In order to protect bank customers, the Securities Trading Act (WpHG) provides for a number of standards that securities service companies must comply with. It contains extensive behavioral obligations for these companies, for example in Section 31 (1) WpHG the obligation to provide careful and conscientious advice based on expert knowledge and free of conflicts of interest. According to Section 31 (2) WpHG, all investment information, including advertising communications, must be honest, clear and not misleading. The information requirements of Section 31 (3) WpHG in conjunction with Section 5 (2) WpDVerOV as well as the recording obligation in Section 34 (2a) WpHG, which was introduced in January 2010 , do not change the general freedom of form of this banking contract either. Finally, in Section 31 (5) of the WpHG, banks are required to obtain information from customers about their knowledge and experience with regard to transactions with certain types of financial instruments in order to be able to assess the appropriateness of the financial instruments for customers. Appropriateness is assessed according to whether the customer has the necessary knowledge and experience ( general financial education ) to be able to assess the risks associated with the type of financial instrument. If, based on the information received, a bank comes to the conclusion that the financial instrument requested by the customer is not appropriate for the customer, it must inform the customer accordingly. For this purpose, the banks create customer-related risk classes to which they assign every customer willing to invest. Since January 2018, credit institutions have had to send private investors a written declaration of suitability in accordance with Section 64 (4) WpHG before concluding a securities order .
The provisions of the WpHG are not an independent basis for a claim against the bank by the customer in the event of their violation by the advisor. According to the rulings of the BGH, advice from credit institutions has to be “appropriate to the investor” and “appropriate to the property” under civil law . Then they have to research the level of knowledge of the customer about investment transactions of the intended type and his willingness to take risks as part of the “investor-friendly” advice; the investment property recommended by banks must take these criteria into account (“property-specific” advice). With this objective in mind, the recommended investment must be tailored to the client's personal circumstances, ie be “investor-friendly”.
  • In the case of notarial authentication , the parties involved declare their will to be notarized ( § 8 BeurkG), which is recorded, read out, approved and signed by the parties and the notary personally ( §§ 9 and 13 BeurkG) after being informed by the notary . As part of the instruction, the notary, as a legally qualified person, has to research the will and the goals of the parties involved, to inform them comprehensively about legal dangers and the legal consequences of the notarization (advisory function) and to formulate the regulations clearly and conclusively (evidence function). The notary has to show the parties involved ways in which risks can be avoided.
  • Other important consulting contracts are the main component of medical advice , career advice , life advice , psychological advice , legal advice , travel advice , debt advice , tax advice or business advice . The principles of advisory law for investment advice can be applied analogously to these advisory contracts.

liability

Irrespective of the subject matter of the consulting contract, the prerequisite for consulting liability on the part of the consultant is, in addition to a consulting contract, bad or incorrect advice. Bad or wrong advice can be assumed if the advice given caused damage . Bad or wrong advice is usually given when the advisor has violated the principles of truth , clarity and completeness of the advice. Then the consultant from the consulting contract is liable according to § 280 Abs. 1 BGB because he has violated a contractual obligation. As a result , the damage actually incurred must be reimbursed in accordance with Section 249 (1) BGB. The injured party must be treated as if the incorrect advice had not been given. In the financial sector, incorrect advice has been statute-barred since August 2009, three years after the person advised learned of the damage.

The question of whether the law of the service contract or the contract for work is to be applied to the concluded consulting contract is essential for the consultant's possible liability . In the case of the service contract, the person being counseled can only claim damages in the event of a (culpable) poor performance, but must accept that he will only receive a faulty advisory service for the fee. In the case of contracts for work and services, however, the consultant has to be fully responsible for the achievement of the consulting objective and has to continue to improve until it is successful ( §§ 633 and 635 BGB), otherwise he does not receive any fees ( § 644 (1) BGB).

In the case of securities service companies, the WpHG contains essential standards relating to advisory liability. However, the provisions of public law supervisory law (Sections 31 et seq. WpHG) do not have any independent significance in terms of compensation law that goes beyond the civil law disclosure and advisory obligations. However, they specify performance and consideration obligations according to § 241 Paragraph 1 and 2 BGB. According to Section 675 (2) of the German Civil Code (BGB), wrong advice only obliges you to pay damages if it violates a contractual or pre-contractual obligation or if it represents an illegal act . If the duty to provide advice is violated, the customer is entitled to a claim for damages based on Section 280 (1) sentence 1 of the German Civil Code (BGB) for violation of duty. Thereafter, the injured party is to be presented as if he had received correct information. If the bank cannot conclusively assess the risks, it must not pretend that it knows, but must point out the lack of specialist knowledge. Since advice on so-called advice-free business (“execution-only” services) is not part of the duties of a direct bank for discount brokers , no tacit investment advice contract is concluded in connection with securities transactions. The acceptance of own consulting obligations from a consulting contract is then fundamentally excluded. Section 31 (5) of the WpHG also requires a so-called appropriateness test in non-advisory business - under supervisory law. A duty to inform under civil law is only possible for discount brokers if the discount broker has recognized that the customer is in need of clarification or has not recognized it as a result of gross negligence . In the case of staggered engagement of several investment services companies, only the company closer to the customer is generally obliged to survey the investor with regard to their experience, knowledge, investment goals and financial circumstances ( Section 278 BGB).

fee

If the advice only results from an ancillary obligation from another contract that is otherwise subject to a fee , the consultants usually forego charging a special consultation fee. Advice from a consulting contract that is exclusively used for advice, however, triggers a consulting fee. In these cases, the fee is paid exclusively for the consulting work performed. In some consulting contracts, the consulting fee is required by law and is not subject to free agreement. This includes in particular legal advice , tax advice , notarial advice or advice from architects and engineers (see: Fee schedule for architects and engineers ).

If a consultant is also a member of the supervisory board of the company being advised or is involved in this, a consulting contract may violate Sections 113 and 114 AktG and thus be null and void if a fee is to be paid for activities that are part of the statutory tasks of the supervisory board.

Individual evidence

  1. ↑ in the case of employees with advisory functions, their employer becomes a contractual partner of the person seeking advice
  2. ↑ Otto Palandt / Hartwig Sprau, Comment BGB , 73rd edition 2014, § 675 Rn. 32
  3. ↑ BGH NJW 2004, 64, 65
  4. ↑ BGH BB 1984, 1094, 1095
  5. ↑ Otto Palandt / Hartwig Sprau, Comment BGB , 73rd edition 2014, § 675 Rn. 35
  6. ↑ Peter Derleder (Ed.), Handbook on German and European Banking Law , 2009, p. 1411
  7. ↑ BGH NJW 2009, 1141 - tax advisor
  8. ↑ Lukas Feiler, Innovation and international legal practice, 2009, p. 799 f.
  9. ^ BGH, judgment of March 12, 1996, Az .: XI ZR 232/95 = NJW 1996, 1744
  10. ^ BGH, judgment of May 19, 1998, Az .: XI ZR 286/97 = WM 1998, 1391
  11. ^ BGH, judgment of October 5, 1999, Az .: XI ZR 296/98 = WM 1999, 2300
  12. ↑ BGH, judgment of July 6, 1993, Az. XI ZR 12/93 = BGHZ 123, 126: "Bond judgment" (link no longer works)
  13. ↑ BGH, judgment of November 25, 1961, Az .: IVa ZR 286/80 = NJW 1982, 1095, 1096
  14. ^ BGH WM 1998, 783
  15. ↑ Olina Burkhardt, The Inclusion of Private Management Consultants in State Decision-Making Processes , 2008, p. 27
  16. ↑ BGH, judgment of December 19, 2006, BGHZ 170, 226 Rn. 18 with further evidence
  17. ↑ BGH NJW 2007, 1874
  18. ↑ BGH NJW 1998, 2675
  19. ^ BGH, judgment of March 19, 2013, Az .: XI ZR 431/11
  20. ^ BGH, judgment of October 5, 1999, BGHZ 142, 345, 358
  21. ^ BGH, judgment of May 8, 2001, BGHZ 147, 343, 353
  22. ↑ Annerose Warttinger / Herbert E. Zimmermann / Wendelin Keller, Law on Fees for Tax Consultants , 2008, p. 175