The consequences of unfair conduct under competition law can be considerable, even for supposedly minor misconduct. For example, a real estate agent’s failure to disclose the competent supervisory authority recently triggered a dispute before the Essen Regional Court (judgment of June 3, 2020, Ref.: 44 O 34/19).

A competition association had criticized the lack of information and requested a cease-and-desist declaration with a penalty clause by way of a warning letter. The real estate agent in question complied and issued a corresponding declaration.

First contractual penalty due to missing information in the imprint

After the information could still not be found on the website after the declaration was submitted, the competition association demanded payment of a contractual penalty of €3,000 based on the declaration submitted. The real estate agent concerned paid the amount and the corresponding information was subsequently found in the legal notice of his website.

Further violation: Supervisory authority not named in second legal notice

However, the estate agent had several websites and the information was still missing from one of them. The competition association took this as an opportunity to claim a contractual penalty again. Once again, it demanded an amount of €3,000 based on the declaration of discontinuance and undertaking. After the estate agent in question failed to comply with this demand, he was sued before the Essen Regional Court.

3000 € contractual penalty for missing information in the imprint not unreasonably high

The judges there ruled in favor of the competition association and confirmed that the amount for the repeated absence and thus the renewed unfair conduct, which had not been remedied despite the contractual penalty already paid, was appropriate:

„The amount of the contractual penalty of EUR 3,000 is appropriate because the defendant has repeatedly breached the cease and desist agreement. The defendant must be ordered by means of a high contractual penalty to refrain from offering telemedia within the meaning of Section 1 (1) TMG in the future without indicating the competent supervisory authority in the imprint, which monitors the obligations resulting from the granting of the license pursuant to Section 34cGewO, in an easily recognizable, directly accessible and permanently available manner within these offered telemedia. In commercial transactions, the party seeking injunctive relief is generally less worthy of protection and the preventative function of the penalty prevails (Beater in: Herberger/Martinek/Rüßmann/Weth/Würdinger, jurisPK-BGB, 9th edition, Section 339 BGB (as at: 01.02.2020), para. 83). The impending penalty must also be set at a high level, as the party obliged to cease and desist is not, as in the case of exchange contracts, required to comply with the contract due to its own contractual self-interest.“

Regional Court Essen, judgment of June 3, 2020, Ref.: 44 O 34/19

The court also rejected the invalidity of the injunction agreement:

„The declaration to cease and desist does not oblige the defendant to perform an act that is impossible for it in the sense of this generalizing standard. In the declaration to cease and desist, the defendant merely undertook to refrain from offering telemedia without naming the supervisory authority. In this respect, the defendant’s assertion that there is a case of subjective impossibility is incorrect, as it is not clear why the defendant cannot generally name the correct supervisory authority.“

Regional Court Essen, judgment of June 3, 2020, Ref.: 44 O 34/19

Fault of the employee is attributed

It also did not help the estate agent that an employee was responsible for the breach. His fault is to be attributed to the estate agent in accordance with § 278 Alt. 2 BGB. According to this, the debtor must also allow the fault of his vicarious agents to be attributed to him with regard to an omission.

Check cease-and-desist declaration, eliminate infringements, avoid contractual penalty

As a result, it can be stated that compliance with a cease-and-desist declaration and undertaking once issued is of considerable economic importance. This includes not only the removal of existing infringements, but also the monitoring and keeping of the promise. Ideally, the extent to which such a declaration must actually be made should be checked before it is submitted. If a declaration is worded more broadly than the actual claim, the risk of being held liable for payment of a contractual penalty increases.