The Purchase and Sale of Companies in Germany - 5.Asset Purchase Agreement - Art

Article 12 includes the contractual withdrawal agreements. This type of contractual withdrawal agreement may also be included in such a contract under German law without any problem. However, it should also be borne in mind that the parties may also have a statutory right of withdrawal in addition to the contractual right of withdrawal. The statutory withdrawal rights anchored in German law cannot be waived by an contractual agreement either.

The law provides for a statutory right of withdrawal in =A7=A7 325 and 326 of the German Civil Code (BGB) in conjunction with =A7 346 of the German Civil Code. In the case of two-sided legal transactions ("do ut des"), both contracting parties are granted a right of withdrawal if the other contracting party either fails to perform the contract or only performs it with delay. Both contracting parties are therefore entitled to withdraw from the contract if the other contracting party is unable to execute the transaction and if the impossibility to perform was attributable to the other contracting party. Both contracting parties also have possibility of issuing a formal warning notice to the other contracting party in the event of delay and to threaten that performance of the contract will not be accepted after a certain date. In this case, the party which is not in delay has the optional possibility of demanding compensation for the damage incurred as a result of delay and non-performance of the contract or to reverse the contract in accordance with =A7 346 of the German Civil Code (BGB).

For further information please contact Dr Erich Michel, Wessing Berenberg-Gossler Zimmermann Lange, Freiherr-Vom-Stein-Strasse 24-26, Frankfurt am Maim 60323, Frankfurt, Germany- Tel: +496 997 1300, Fax: +496 997 130100.

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