December 07, 2011

Right to refuse consumers

   In an Indian Restaurant in Leamington spa, one sentence at the botton of the menu drawed my attention : « this restaurant reserves the right to refuse to serve a customer WITHOUT providing any justification or reason ». We can understand the aim of such a mesure : preserve the restaurant from entree of alcoholics, unruly customers etc. These are reasons the law generally protects. But the law also protects the customer from discrimination. Are such clauses conform with our respective laws ?

Under french law, this statement will be considered as void. Indeed, the code de la consommation prohibits « to refuse to sell a product, or supply a service, to a consumer WITHOUT a legitimate reason » (1), which can be for instance the offensive behaviour or the of the consumer (2). So france, as often, protects the consumer against such discrimination, by establishing a presumption of discrimination when there's no legitimate reason to refuse to supply a service or sell a product to a consumer.

In England, there's some statutory provision which protects against discrimination such as for instance the equality act 2010, but there are no special provisions concerning the consumer. What is punished is to refuse to sale a product or supply a service WITH a discriminating reason. The fact of not providing any reason is not forbidden in itself, following the principle of freedom of contract. Only one of the discriminating reasons listed in the act can be questionned, i.e. Age, Disability, Gender reassignment, Marriage and civil partnership, Race, Religion or belief, Sex, Sexual orientation. So this is to the "consumer" or other victim of discrimination to proof the discrimination and its nature, which is not really easy to do in practice. Hopefully we can note that case law complete efficiently this protection concerning insurance contracts by admitting a general duty of fairness and rationality to the insurer (4) - which is not the case everywhere (cf. debates on the insurance system in the U.S.A).

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  1. Art L122-1 of the code de la consommation

  2. « Constitue en revanche un motif légitime le comportement insultant et l'impolitesse d'un consommateur » ●Versailles, 7 mars 2003: Lettre distrib. mai 2003, p. 4.

  3. equality act 2010 c.15

  4. Wood v Wood (1874) L.R. 9 Ex. 190 and McInnes v. Onslow Fane [1978] 1 W.L.R. 1520 ; cited in « Common values in public and private law and the public/private divide », Dawn Oliver, P.L. 1997, Win, 630-646.


November 29, 2011

International labels protecting food specialities

.

Reading my new cooking book, I asked me a question : is it true that, as said Jamie Oliver, England doesn't have any label protecting foods specialities, as the french AOC Label (1)? This question deals with the interests of Consumers who can know what they are eating, its origins, how it is producted, etc. ; the one of Local producers who can increase in value their products, prooving that they follow a special and traditionnal method of production etc. And we know how tourists -but locals so- are fan of this « traditionnal » things. But it also concerns Bigger Producers who have to take care about how they make and how they call there products.

Making some researches I've found that if France is a reference in this matter, having protected his famous cheese and wine for a long time (2), its system - and notably the AOC Label (« Appelation d'origine controlée »)- inspired two international Labels :

The international « Appelation of Origin »

Creaded by the Lisbon Agreement in 1958 , this Label is administered by the International Bureau of the World Intellectual Property Organization (WIPO). It covers « the geographical denomination of a country, region, or locality, which serves to designate a product originating therein, the quality or characteristics of which are due exclusively or essentially to the geographical environment, including natural and human factors »(3). It has currently 27 member countries, among them France, but Germany and England are not part of this organization (4). it protects products like Porto (Portugal), Champagne (France), Tequila (Mexique) - (5). This topic will be re-debate in december 2011 in Genève by the actual working group on the development of the Lisbon System (Appelation of Origin) - (6).

The European Protected Designation of Origin (PDO)- in french AOC ("appelation d'origine protégée.")

This Label was introduced in 1992 and is today coverred by a regulation of 2006 (7), which was modified in 2008 (8). It protects, as said in the European Commission website «agricultural products and foodstuffs which are produced, processed and prepared in a given geographical area using recognised know-how. » (9). Moreover, there are two other relevant labels protecting the goods, the PGI (protected geographical indication) and TSG (traditional speciality guaranteed) (cf. 9). And, as shows the official databases, some english products are protected by this Label like white Stilton cheese, Blue Stilton cheese, West Country farmhouse Cheddar cheese (…). So "Jamie" was wrong : England Protects its food, and particularly his Cheddat! Of course still not so good as France in terms of quantity of products protected (currently 17 english v. 82 french products protected by this label). The quality of the protection allowed doesn't seems to be better either. For instance we can question the power of the well-named "West Country farmhouse Cheddar cheese" label : Do the english consumers really distinguish between this Cheddar and another one?

(PS : Thank you girls for the book!)

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  1. Jamie does... easy twists on classic dishes inspired by my travels, Ed. Pjoseph Michael, 22/04/10, p 284 : « Something France really gets right is the way it fights to protect the heritage and integrity of its food products and producers (…) by the AOC label (appelation d'origine controlée or « controlled term of origin »). (…) I think it's a shame we don't really do that in England. Just think : if Cheddar...».

  2. The first protection was the « Appelation Châteauneuf-du-pape » for wine in 1933.

  3. Lisbon Agreement, art 2 (1) http://www.wipo.int/lisbon/fr/legal_texts/lisbon_agreement.html

  4. About the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration, see : http://www.wipo.int/lisbon/en/general/

  5. To search Appelation of Origin (Lisbon Express) : http://www.wipo.int/ipdl/en/search/lisbon/search-struct.jsp

  1. Drafts and notes of the working Group on the development of the Lisbon System (Appelation of Origin) in http://www.wipo.int/meetings/fr/details.jsp?meeting_id=24524

  2. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:32006R0510:EN:HTML

  3. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2008:173:0003:01:EN:HTML

  4. European Commission, Agriculture and Rural Development, http://ec.europa.eu/agriculture/quality/schemes/index_en.htm


November 23, 2011

Negligent and innocent misrepresentation (UK) v. Mistake as to the substance (France)

Whereas English law focusses on the concept of « Misrepresentation », subdivided in fraudulent, negligent and innocent misrepresentation, French law distinguishes between Dol (fraudulent misrepresentation) and Erreur sur la substance (Mistake as to the substance of the contract) – (1)

rjo0248l.jpg

The rules concerning dol and fraudulent misrepresentation are quite similar : where there is an intent to deceive and knowledge that the information provided is false, the other party can claim for damages and rescission of the contract (2&3). The most relevant difference between these two systems concern the so-called "negligent and innocent misrepresentation" and" mistake as to the substance": Whereas English law focusses on the act of one party (misrepresentation), french law focusses on its consequences concerning the act of the other party (mistake as to the substance). As a result, the English law borders more the scope of its protection and consequently the possibility of remedies than French law.

Scope of the protection -

Under english law, a mistake has to be based under an act of misrepresentation of the party, that is to say a positive act of the party. Consequently a party is under no duty to disclose facts even if (s)he is aware that knowing the facts would make a difference to the other party (4). On the other hand french law imposes an “obligation d'information” (duty to disclose facts) to the seller (/!\ but still not to the buyer, e.g. in the case of an auction). As a result it punishes omissions like silence, even if there was no intent to deceive. However this difference reduces through the influence of E.U law. For instance today English law does recognize a limited group of cases in which a duty of disclosure is imposed upon the parties to the contract (contracts of “good faith” or contracts “uberrimae fidei”), such as insurance contracts, fiduciary contracts or consumer contracts (5).


Remedies allowed by the courts - ;

Onces again, the French rules were more protective than the English ones, which are rather based on freedom of contract. French law allows since a long time the right of rescission of the contract in case of mistake as to the substance (6) which was not the case of english law. But the regimes concerning Mistake as to the substance (“erreur sur la substance”) and innocent and negligent misrepresentation come closer together since the English Misrepresentation act (7) which allows a party to rescind the contract or to obtain damages in lieu of rescision if “it would be equitable to do so, having regard to the nature of the misrepresentation and the loss that would be caused by it if the contract were upheld, as well as to the loss that rescission would cause to the other party.” The british courts considers in case of negligent misrepresentation, that is to say when the defendant carelessly makes a representation while having no reasonable basis to believe it to be true, this rescission and damages will always be allowed (8). In case of innocent misrepresentation, i.e. when the representor had reasonable grounds for believing that his or her false statement was true, are let to the appreciation of the judges, the courts do also allow rescission if the statement in question was (1) very important and (2) already spoken. Then, they can consider it as a term of the contract and applying the rule of breach of contract (9).

This comparisom shows the different ways England and France have balanced two interests in Law : to punish the wrongdoers (and just them?) v. to provide remedies for (any?) loss suffered. But it shows also the different essences that is given to the notion of contract : For the French law, a contract cannot exist without any "cause", any aim, whereas the english law requires just a consideration provided to the other party, i.e. an economical exchange.

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  1. NB : But this distinction is today criticized, dol causing the Mistake as to the substance of the contract of the other party as well. c.f. J. GHESTIN, La réticence, le dol et l'erreur sur les qualités substantielles, D. 1971, chron. 247 ].

  2. In English law, c.f. Hedley Byrne & co ltd v Hellers & partners ltd

  3. In French law, c.f art 1116 and 1117 code civil concerning the rescission and Cass. Com and 15 janvier 2002 concerning the damages

  4. c.f Keates v Cadogan [1851] 10 CB 591, Bradford Third Equitable Benefit Building Society v. Borders [1941] : “MERE silence, however morally wrong, will not support an action of deceit”

  5. e.g. Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantee – art 2 :

    Consumer goods are presumed to be in conformity with the contract if they: (…) (d) show the quality and performance which are normal in goods of the same type and which the consumer can reasonably expect, given the nature of the goods and taking into account any public statements on the specific characteristics of the goods made about them by the seller, the producer or his representative, particularly in advertising or on labelling.”

  6. French civil code, art 1117.

  7. Misrepresentation act 1967 – section 2(2)

  8. Hedley byrne v heller, Esso Petroleum co ltd v mardon (Lord Denning stated the rule by transporting the tort of negligence into contract law).

  9. [Birch v Paramount Estates (1956) 167 EG 196].


November 09, 2011

Explication : the revocability of the offer

Follow-up to The postal rule – Acceptance sent through the post from Aurelie's blog

This difference can be explained by the difference concerning the revocability of the offer in the 3 systems. Whereas German law considers the offer as irrevocable (1), French and English law accept this possibility of revocability in the name of freedom of contract, but with some limitations or exceptions.

The revocability of the offer is possible in England only when no consideration was provided and in case of bilateral contracts (2). In France, the general possibility of revocation (3) is limited to a “reasonable time” by jurisprudence (4). Moreover can the offeror bound himself by proposing a period of validity of the offer (5), which is not possible under English law (6). But this liability is limited to damages. Indeed, French law refused to govern pre-contractual period by contract law, and let apply tort law (droit délictuel) in such situations.

As said before, the choice between the two principal theories of emission and reception allows to answer in three different situations between the time the letter of acceptance was sent and the time it arrives :

- Did the offeree miss the deadline proposed by the offeror to accept the offer?

- Can the offer be revocked by the offeror?

- Is the offeree which send an acceptance and revocked it just after by mail bound when both arrived at the same time? NB: an acceptance is always NOT revocable when the contract was concluded, but is here the contract concluded?

The answers to the first and third question depend purely on the applicable theory. The answer to the second one depends on the applicable theory AND on the applicable law. Indeed, German law which doesn’t allow to revoke the offer has no interest to choose the theory of emission, which will just add problems concerning proofs for the 1st and 3rd situations. On the other hand, English and French law need this theory to protect the offeree from offeror’s revocation during this period.

There’s still one question: why does French law in this Avant projet Catala opt for the reception theory? This project conserved the possibility of revocability and its limitations, but allows the offeree to enforce the contract when it’s not respected (7). As explained by the authors, This “progress” in favour of the offeree is compensated by the theory of reception, which protects more the offeror, and reinforces its possibility to revoke the contract (8)…

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(1) 145 BGB<http://www.gesetze-im-internet.de/bgb/index.html#BJNR001950896BJNE031602377>

(2) Dickinson v. Dodds, 2 Ch. D. 463 (1876). For unilateral contracts, cf. Daulia Ltd v Four Millbank Nominees Ltd [1977] EWCA Civ 5

(3) Civ., 3 févr. 1919, DP 1923. 1, 126. But there are some situation where French law forbid to revoke the offer during a précised time such as consumer credit law (15 days), electronical contracts (while it is accessible on the website)…

(4) Civ. 3e, 25 mai 2005, no 03-19.411 , Bull. civ. III, no 117 ; CCC 2005. no 166, obs. Leveneur.

(5) Civ. 3e, 7 mai 2008, no 07-11.690, Bull. civ. III, no 79 ; D. 2008. AJ 1480, obs. G. Forest ; Pan. 2969, obs. Amrani Mekki ; RTD civ. 2008. 474, obs. Fages ; CCC 2008, no 194, obs. Leveneur. - Déjà Civ. 1re, 17 déc. 1958, Bull. civ. I, no 579 ; RTD civ. 1959. 336, obs. J. Carbonnier.

(6)

(7) Avant projet Catala, art 1105-4

(8) Avant projet Catala, section “formation of contracts”, art 1104-1107, commentary by Delebecque P. & Mazeau, D., §3 “certainty” < http://www.justice.gouv.fr/art_pix/rapportcatatla0905-anglais.pdf>


November 01, 2011

The postal rule – Acceptance sent through the post

When does an acceptance sent through the post become effective? The answer to this question determines where and when the contract is formed, and allows to answer to three important questions : Did the offeree miss the deadline proposed by the offeror to accept the offer? Is a revocation made by the offeror between the time the letter of acceptance was sent and the time it arrives possible? Is the offeree which send an acceptation and revocked it just after by mail bind when both arrived at the same time?

There are 4 possibilities of answers :

  • when the offeree decide to accept (externalisation theory Äußerungstheorie)

  • when the offeree posts its acceptance (expedition or emission theory, dispatch theory, “postal rule”, übermittlungstheorie).

  • when he recieves the acceptance (reception theory, Empfangstheorie) - with presumption he will knew it.

  • when the offeror knows the acceptation (information theory, Vernehmungstheorie)

The most extrem possibilities (the 1st and the last) are innapplicable for proof reasons.

English law opted for the emission's theory under its “postal rule” (1), and then limits its application. For instance it's only applicable when it was reasonable to use post as a method of acceptance (2), the letter of acceptance was properly posted (3) and it didn't produced a “manifest inconvenience and absurdity” (4)

French civil code doesn't generally regulate this matter (5). French Cours de cassation decided for a long time that it was a question of facts, and should be decide “following the circumstances of the case” by the judges (6). Sometimes it decided to apply the expedition theory, sometimes the reception theory. But it definitely decided to support the emission theory in 1981 if the seller didn't stipulate anything (7). However it could change in a few years, a current law project recommending to delete it and to replace it by the reception theory (8). This theory has the inconvenience to protect more the seller than the buyer, seller who already often imposes his terms and conditions, for instance in consumer relationship.

Can we accept that a second acceptance from an other place after ours, which arrived before ours because of a strike in our post center is valid and that we consequently loose the contract? Is the contract law a game in which the more lucky win?

Anyway, today the reception theory (Empfangstheorie) is not out-of-the-way : German law opted for it in §130 BGB (9), just like the CISG (10) and Unidroit principle chose the reception theory (11).

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  1. Adams v Lindsell (1818) 1 B & Ald 681, confirmed in Dunlop v Higgins (1848) 1 HLC 381.

  2. Henthorn v Fraser [1892] 2 Ch 27. For instance, it doesn't apply if the offeree knows that there is going to be some delay to his acceptance due to an event such as a postal strike.

  3. Getreide-Import GmbH v Contimar SA Compania Industrial, Comercial y Maritima [1953] 1 WLR 207 (misaddressed acceptance).

  4. Holwell securities Ltd v Hugues [1974] 1 WLR 155 (CA), per Lawton L.J

  5. But art 932 code civil choose the “reception” system concerning donation contracts and art 1985 choose emission system concerning power of attorney (mandat).

  6. Cass. req. 6 août 1867

  7. Cass. com. 7 janv. 1981, Bull. civ. IV, no 14, RTD civ. 1981. 849, obs. F. Chabas

  8. Avant-Projet Catala, Art 1107.

  9. Art 130 BGB : Effectiveness of a declaration of intent to absent parties; (1)A declaration of intent that is to be made to another becomes effective, if made in his absence, at the point of time when this declaration reaches him. It does not become effective if a revocation reaches the other previously or at the same time.

    See statement in http://dejure.org/gesetze/BGB/130.html

  10. United Nations Convention on Contracts for the International Sale of Goods, art 18 : “A statement made by or other conduct of the offeree indicating assent to an offer is an acceptance”.

  11. Unidroit principles of international commercial contracts 2010 – art 2.1.6-2° : “An acceptance of an offer becomes effective when the indication of assent reaches the offeror”.

Sources :

Patrick CHAUVEL, localisation du consentement dans le temps et dans l'espace, répertoire de droit civil DALLOZ (online), CONSENTEMENT, section 5, notes 238-255.

E. Mckendrick, Contract law, Text, cases and materials, 9rd ed. Oxford press.

Einsele, MüKo-BGB, §130.


October 26, 2011

The "Battle of the forms

Comparative approach of different laws shows that there are different approaches to resolve a conflict between general conditions of sale and general conditions of supply. One of this approach, chosen by English law, is the « Last shot rule ».

In Butler, Lord Denning wrote (1): nki0091l.jpg

where there is a battle of the forms, there is a contract as soon as the last of the forms is sent and received without taking objection to it. In some cases, the battle is won by the person who fires the last shot. He is the person who puts forward the latest term and conditions; and, if they are not objected to by the other party, he may be taken to have agreed with them.

The reference to combat terms, like « Battle », « Last shot » shows the importance of freedom of contract and of taking care about clauses contained in the agreements and terms and conditions send by the other party.

In France and Germany prevails an other rule : the Knockout Rule or the Restgültigkeitstheorie, which considers that terms and conditions of both parties are neutralized when they enter into conflict. They are considered as non-invokable and the general rules of law applied (2). This rule seems to be more objective and protect more the inattentive party. However, French administration and law which is not so strict fixed and organised as the german one sometimes differs from this rule, by trying to to impose general conditions of sales as the most important contractual document and asking judges to let it prevail - which can in my opinion appear quite injust for the buyer (3), or letting prevail the conditions which are the most visible (4).

This can be inimaginable and quite difficult to understand for english lawyers, which are strictly opposed to the idea to let the judges add terms into the contract or interpret it.

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NB : This knock-out rule was adopted UNIDROIT PICC (5) and by the American Uniform Commercial Code (6). There is a third approach followed by the Dutch civil code, the « first blow » rule, in which prevail the terms and conditions of the offeror, unless they are expressly rejected by the acceptor.

(1) Butler Machine Tool Co v Ex-cell-o-Corp [1979] 1 W.L.R. 401.

(2) For exemple, Ccass mars 1995, (pourvoi n°83-15936) in France and BGH, 20 mars 1985 (NJW 1985, 1838) in Germany, cited in Cases, Materials and Text on Contract Law, Ius Commune Casebooks for the Common Law of Europe, Second Edition, p 309 and p312 note (7).

(3) circulaire Dutreil du 16 mai 2003, Avis de la commission d'examen des pratiques commerciales n°04-04, 7 juil. 2004.

(4) Com. 20 oct. 1964, Bull civ. III, n°458

(5) article 2.1.22

(6) §2-207(3)


October 19, 2011

E.U consumer sale directive's implementation

What can I do in France, Germany and England when the microwav I've bought in a shop doesn't work - that is to say is non confrom under the E.U consumer sale directive (1)? what does that mean for business who want to sale goods cross-border?

After definiting non-conformity product and repeating the principle that the seller shall be liable to the consumer for any lack of conformity which exists at the time the goods were delivered, this directive proposes in its art 3. four options to the buyer: reparation free of charge or replacement free of charge (§3), and appropriate reduction made in the price or contract rescinded with regard to those goods -if the lack of conformity is not minor (§ 5 and 6). France, Germany, and England chose different implementation approaches: Whereas the directive caused radical changes in German BGB, beyond the initial area of the directive (the directive was extended to B2B contracts, which is not the case in France and England), the English parliament just created in addition to existing rules a new independent section in the Sale of Goods act 1979 concerning consumer protection which strictly follows the directive (2). The implementation of the directive in French law was more complicated : The french law contained supplementary protections when the defects were hidden, the « Garantie des vices cachés», according to the definition of art 1641 cciv (3). Finally, the supreme court (ccass) decided that the relevant actions have to be exercised before the other legal action (resulting from the directive) based on non-conformity. If these actions fail the buyer can exercise and action based on non-conformity following the dispositions of french code de la consommation (4).

bron1294l.jpg

These non-conformity actions still remain sometimes different in England, France and Germany:

  • The three laws allow the right of reparation or replacement of the product (art L211-9 code de la consommation ; §439 BGB ; 48B Sales of Goods Act). It's really a new right for the English customer. Before, in England «the buyer would have to get the goods repaired at his own expense and claim damages to cover the cost or reject the goods, buy substitute goods elsewhere and claim any additional cost by way of damages» (5).

  • But whereas the english law accorded reduction of the price or rescission of the contract without any condition (art 48C) - in addition to the old right to immediatly terminate the contract ; The German and french law allow a second possibility to the buyer only if neither repair nor replacement is possible or the seller fails to carry it out. The seller should NEVER forget it if he decide to stop its production or to restock. Theses possibilities are quite similar : right of price reduction or reimbursement of the price (art L211-10 code de la consommation) in france ; right of termination (§323), or instead of terminating the contract a price reduction (§441) in Germany.

NB : Moreover can always the buyer ask seller for damages for an independant damage caused by the defect (art 1382 code civil, 281 BGB) and exercise a contractual action based - if existing - on the guaranty accorded by the buyer in the agreement.

Interpretation : Different positions about consumer protection and harmonisation.

It appears so that English Law by a perfect implementation of the directive allows more protection to its consumer than French and German law, which can be surprising. Indeed, England is well-known to have difficulties to fit nicely its own Law with the European one, and to protect the principle of freedom of contract. Nevertheless England tried to keep its old rules, like the old right to immediatly terminate the contract.

France, known to protect sometimes too much the consumer, by trying to keep its own rules too like the "Garantie des vices cachés" now obliges to distinguish the worstsituations (hidden defect with a certain seriousness) which has the counter-effect, if we compare to new english law, to low the possibility to obtain reduction or recovering of the price.

Finally, German law which seems to gave the more importance to the directive, by using it to refund its law and extending it to the B2B contracts seems to be the less protective law in consumers area. But Germans seems to be -as always- the most opened to maximum harmonisation.

Sometimes Apparence can be deceptive...

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  1. Directive 1999/44/EC of the European Parliament and of the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantee: http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31999L0044:en:HTML

  2. Sale of goods Act 1979 : http://www.legislation.gov.uk/ukpga/1979/54

  3. French code civil, art 1641-49. .Art 1644 Cciv explains that the buyer may choose between an "action rédhibitoire" (to return the thing and recover the price) and an "action estimatoire" (reduction of the price). These actions require 4 conditions : a defect of a “certain seriousness” without whom the buyer would not have bought the product, a hidden defect, impossible to detect at time the goods were delivered, a defect which existed at the time the goods were delivered, an action introduced in a “short delay” after the discovery of the defect (appreciated by the judges).

  4. French code de la consommation, art L211-4 / L211-14 : http://www.legifrance.gouv.fr/affichCode.do;jsessionid=288BACF09D1E578AF8FD77DACDC7D6F2.tpdjo15v_1?idSectionTA=LEGISCTA000006161839&cidTexte=LEGITEXT000006069565&dateTexte=20111019

  5. Cases, Materials and Text on Contract Law, Ius Commune Casebooks for the Common Law of Europe, second Edition, p. 1075, note (1).

  6. German BGB :http://www.gesetze-im-internet.de/bgb/index.html#BJNR001950896BJNE031602377



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