Performance determination right
The right to determine performance is a legal term in German law of obligations . It denotes the right to determine the exact service content for a contractual service that is not already specified in the contract itself. One of the contracting parties or a third party may have the right to determine the performance.
In a contract, the service owed must normally be specified or at least clearly identifiable (for example: the purchase price is the market price applicable at the time of delivery). If this is not the case, the contract may be ineffective due to dissent . However, it is also possible that in the contract a contracting party or a third party is expressly or tacitly granted the right to determine the content of the service. In this way, it is possible to conclude a contract before all details have been clarified and to determine the necessary details later.
For the contract to be effective, it is then at least necessary to regulate which contractual party or which third party is to be entitled to the right to determine the performance. It is also conceivable to delegate the appointment of the third party to a neutral body. If it is a question of determining the scope of a consideration for a certain service, the law contains an interpretation provision in Section 316 of the German Civil Code (BGB) , according to which, in case of doubt, the person who has to claim the consideration is entitled to the right to determine the service.
There are two questions that need to be regulated when it comes to the right to determine benefits: What criteria should be used to determine the benefits and what applies if these are not complied with? This results from § 315 to § 319 BGB.
For the determination of the service by a party, according to § 315 Paragraph 1 BGB, in case of doubt (i.e. if the parties do not clearly agree otherwise), it is to be assumed that the service determination is to be made at reasonable discretion. If the determination made is not fair , it is not binding. The other contractual partner can then appeal to the court and the determination will be made by judgment ( Section 315 (3) BGB).
If a third party has the right to determine the performance, then in accordance with Section 317 (1) of the German Civil Code (BGB), it must also be assumed in cases of doubt that the performance determination is to be made at reasonable discretion. Here, the performance determination of the third party is not already non-binding in the case of simple inequity, but only in the case of apparent inequity, with the result that the determination can be made by a court judgment ( Section 319 (1) BGB).
A distinction must be made between the right to determine the right to make changes. Here a service content is originally determined, but the right is reserved for one of the contracting parties to subsequently change the promised service or to deviate from it. Such agreements are possible within the scope of freedom of contract. If the reservation of amendment is agreed in the General Terms and Conditions (GTC), however, § 308 No. 4 BGB contains a restriction: A reservation of amendment in favor of the user of the GTC is ineffective if the agreement of the change or deviation, taking into account the interests of the user, does not apply to the other part of the contract is reasonable.
