When does compensation for damages actually follow from the delivery or manufacture of a defective item? What requirements must be met? I am often asked when it is actually possible to claim damages if it is not yet clear whether the service can still be provided. The answer is actually not easy to give, even for lawyers, because the law distinguishes between six (!) different bases for claims.
In principle, two separate paths must be distinguished. Firstly, the damage that can be claimed "in lieu of performance", as the law puts it. This refers to the case where the customer has lost interest in the provision of a service and demands compensation instead. The second basic case is that the customer still has an interest in the service itself, but demands compensation for the damage caused by the delayed or non-contractual fulfillment of the contract. If the damage would be remedied by subsequent improvement (i.e. the delivery of a defect-free item or the rectification of a defect), the customer must take the route via § 281 BGB, i.e. first set the supplier a reasonable deadline and only then can demand compensation.
The customer can only claim damages in lieu of performance (Section 280 III BGB) after setting a reasonable deadline, unless one of the statutory exceptions applies. You can be sure that the courts normally assume that these exceptions do not apply, which is why in cases where you really want to get out of the contract and claim damages, you always have to set a deadline. Damages in lieu of performance can only be claimed if there is no insignificant breach of duty. Compensation for damages covers the damage at the latest possible time of subsequent performance, i.e. in case of doubt always up to the moment in which the set deadline has expired or the supplier refuses subsequent performance.
The costs include the costs of the repair or the costs of a covering purchase. This is because none of these costs would have been incurred if the customer had received a defect-free item.
