The breach of a contract, i.e. the non-performance or improper performance of contractual obligations, is generally not a breach of competition law. This is due to the fact that a contract is exclusively a matter between the respective parties. Third parties have nothing to do with this legal relationship.
Inducing breach of contract is anti-competitive according to the courts
However, according to case law, this should be different if an entrepreneur induces a third party to break a contract with a competitor. This is also referred to as “inducement to breach a contract” and is considered anti-competitive in principle.
Specifically, it concerns cases in which a customer or an employee of a company breaches a contract with the help of a competitor. The focus is usually on inducement to fail to comply with notice periods, loyalty and exclusivity obligations. However, the breach of any material contractual obligation can be considered.
Required: Deliberate and conscious efforts to breach the contract
Not every promotion of a breach of contract by another party is sufficient for the assumption of inducement to breach of contract. Rather, according to established case law, a deliberate and intentional inducement to a breach of contract with a competitor is required (see OLG Nuremberg, judgment of November 12, 2019, 3 U 592/19).
An inducement to breach of contract does not exist, for example, if the inducer of a breach of contract had no knowledge of the other party’s contractual obligation with the competitor (see OLG Hamm, judgment of May 9, 2003), or if he merely encourages a third party in an already made decision to breach a contract with a competitor (see OLG Frankfurt, July 11, 2013 – 6 U 87/12).
Permissible: Exploitation of a breach of contract
As a rule, the mere exploitation of a breach of contract is also permissible. This principle is again based on the idea that a contract is exclusively a matter between the respective parties. The contract should therefore generally not produce any legal effects (here in the form of a breach of competition law) vis-à-vis third parties (see BGH, judgment of September 11, 2008, I ZR 74/06).
It is disputed in legal literature and case law when such exploitation is considered unfair and therefore anti-competitive and how the mere exploitation of a breach of contract is to be distinguished from an inducement to breach of contract.
Criticism of case law on breach of contract in competition law
In general, the literature only seems to agree with the case law on a few points: many authors criticize the classification of inducement to breach of contract as anti-competitive. This is primarily based on the fact that inducement to breach of contract is not a “commercial act” within the meaning of the UWG and is therefore not anti-competitive.
It is uncertain whether the courts will take up this criticism and thus deviate from their current practice. Until then, entrepreneurs should exercise caution when working towards a breach of contract by a third party.