Event: Five strategies to avoid liability in the United States
You are surely aware that the American legal system has very different conditions for manufacturer and supplier liability. The American market also offers unimaginable opportunities for growth. On March 14, 2018, our US attorney Dierk Reinhardt will give an easy and comprehensible presentation on the five most important ground rules for avoiding the risk of liability – regardless of whether your business is already operating in the states or whether you’re attempting to enter the market.
LEGASUS Wirtschaftsanwälte, Lise-Meitner-Straße 14,
Date: Wednesday, March 14, 2018, 18:00
Registration at veranstaltung[at]legasus.de
International law of commercial agency: LEGASUS successfully asserts claims for compensation in Austria
The Austrian group of companies manufacturing heat sinks for high-tech applications throughout Europe, among others, had terminated the co-operation with the German distribution partner and had refused to pay surplus commissions and claims for compensation in a reasonable amount. The group of companies cited deviating legal provisions in the Austrian law of commercial agency and contract clauses providing for complete exclusion of surplus commissions.
With a large negotiation effort, the business lawyers of LEGASUS were able to convince the company of the risk of invalidity of its contract clauses and of calculating the claim for compensation in conformity with the law. “The case law of the German Federal Supreme Court in favour of commercial agents also carries weight in Austria which helped us in our negotiations,” said Dr. Martin Schlaich, one of the involved business lawyers at LEGASUS. “We are very happy that we have found the right legal leverage and were able to achieve such a positive result for our client without taking the long route of legal action in Austria,” Dr. Schlaich continued.
The law firm LEGASUS, Heilbronn, regularly counsels company in the ideal design of distribution agreements (commercial agents and licensed dealers) and in disputes in the field of national and international distribution law.
Contact: Dr. Martin Schlaich
News on the liability of managers: when does legal advice exonerate the manager?
Under certain conditions, the executive board of an AG (public limited company) is not liable for a mistake committed by a manager if the executive board has sought corresponding legal advice beforehand.
Dr Martin Schlaich, Specialist Lawyer for Commercial and Company Law, of the Legasus corporate law firm in Heilbronn and Stuttgart, Germany, illustrates the requirements for such exonerating legal advice on the basis of a current decision of the German Federal Court of Justice (Bundesgerichtshof, BGH) (judgement dated 28/04/2015, reference no. II ZR 63/14).
On the case decided upon:
An AG had entered into a consultancy agreement with a GmbH (private limited company). A member of the executive board of the commissioning AG had been the sole shareholder and managing director of the GmbH at the same time. The fee agreed upon in the consultancy agreement for the GmbH was simultaneously supposed to serve as remuneration for the executive board activity.
The AG took legal advice from a law office as to whether the executive board or the supervisory board of the AG was responsible for the commissioning. The law office erroneously advised that the executive board was entitled to award contracts.
According to the established case-law, however, it is the supervisory board that is responsible for taking the decision on the remuneration of the executive board members and for the conclusion of the agreements affected by the remuneration. The German Federal Court of Justice has now clarified that this also applies where the agreement on the remuneration is not concluded with the executive board member him- or herself, but with a third party.
In the view of the German Federal Court of Justice, the executive board had acted in breach of its duties in the case at hand, as it disregarded the division of responsibilities under German stock corporation law. Nevertheless, this had exactly been the advice given by the law office. As a consequence, the question was as follows: is a manager who has sought legal advice from a lawyer beforehand allowed to rely on the correctness of such advice and can this manager exonerate him- or herself in this way?
The answer is: yes. Executive boards and managing directors may invoke an error of law to exonerate themselves. The precondition for this is, however, that they disclose any and all information and documents required in this respect, that they take legal advice from an independent, qualified professional and that they make the legal advice subject to a thorough plausibility check.
Of course, any legal review of the legal advice will not be necessary in this regard. Rather, it needs to be verified whether any and all necessary information had been available to the advisor, whether the advisor had processed such information and whether any questions to be raised on the part of a person not familiar with the law had been consistently answered by the advisor.
Despite legal advice being sought beforehand, the manager’s liability will be excluded only if the advisor was qualified and had been fully informed. Moreover, the advice given always needs to be questioned. Where necessary, additional questions have to be posed and further information needs to be provided.
The person to contact for any questions in this regard is
Dr Martin Schlaich
Competition prohibited after lease of a company
LEGASUS gains by litigation a prohibition of competition unprecedented nationwide after a company lease agreement comes to an end.
A company in the chemical industry had been effectively leased to another company. After the lease agreement ran out, the company that had taken the lease on wanted to continue operating and thus competing in the same market. A subsequent ban on competition was not explicitly regulated in the lease agreement.
In the interim legal protection suit Legasus succeeded in an alliance with Legal Advance commercial lawyers in enforcing in a court of law a prohibition of competition for a limited period of time. This temporary ban has meanwhile been confirmed on appeal by the Stuttgart Higher Regional Court and the period extended. The legal position for competitive activities was not undisputed in the literature; there has apparently not been a higher-court decision on such a case before.
Commercial lawyers involved
LEGASUS commercial lawyers: Dr. Martin Schlaich (Heilbronn, leading partner)
LEGAL ADVANCE commercial lawyers: Dr. Steffen Burr (Heilbronn, partner), Marcel Burr (partner)
Managers’ liability in practice
Follow-up report on the speaker event at the Heilbronn Chamber of Commerce and Industry
Together with the commercial lawyers Dr. Martin Schlaich from the Legasus firm of commercial lawyers and our alliance lawyer Marcel Burr, the Heilbronn Chamber of Commerce and Industry held an interesting and successful information event for managers wishing to protect themselves against legal risks. The two lawyers gave a succinct and informative presentation to managers and directors from the region attending the event on the principles of managers’ liability and the latest developments. Their talk focussed on devising avoidance strategies and potential solutions. It was in particular the reports from day-to-day consulting work that met with keen interest.
The numerous questions asked in face-to-face discussions during the break and after the event showed that the issue has huge practical relevance. The Heilbronn Chamber of Commerce and Industry has therefore already announced that it is making arrangements for the talk to be given again in its branch offices.