Imputation of the Criminal Behaviour of a Representative in Sales Organizations

03-Aug-2012 | News-Press Release

Cologne, Nordrhein-Westfalen ( prsafe ) August 1, 2012 - In a judgment dated 15.03.2012 (Case No.: III ZR 148/11) the Federal Supreme Court of Germany (BGH) ruled that sales organizations that provide capital investments are in certain cases liable for the criminal conduct of their sales representatives.

GRP Rainer Lawyers Tax Advisors, Cologne, Berlin, Bonn, Düsseldorf, Hamburg, Munich, Stuttgart, Frankfurt elaborates: In the case on which the decision was based, a representative of a financial consulting firm liquidated a customer's investment funds and transferred the sales value to his private account by forging the customer's signature. In this case, the Court saw a close relationship between the professional activities of the representative and his criminal actions.

According to the Court, the advice provided by the representative established a contractual relationship within the meaning of § 311 Section 2 No. 3 BGB with duties under § 241 para 2 BGB, because the advice was accompanied by the authorization of said representative to continuously disclose to the customer information that is generally subject to banking secrecy.

In this case, this obligation had been violated by the representative. The Federal Supreme Court held that the defendant sales organization was liable in accordance with § 278 p.1 BGB because the representative had come in contact with the infringed legal assets of his customer precisely by means of his professional activity, which ultimately enabled him to sell the customer's capital investments.

Commercial law is the branch of civil law which governs commercial transactions. Commercial law thus includes provisions relating to the legal relationship between the merchant and his business partners, as well as competition and corporate relations with other entrepreneurs. In addition, the accounting and record-keeping responsibilities for merchants are derived from commercial law. The most important source of law is the German Commercial Code. Closely connected to this is company law, which is also regulated by the Commercial Code in respect of OHG, KG, and dormant companies.


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