Swiss Contract and Tort Law

Introduction to Swiss Law – Private Law

Friday, October 4th 2019, KOL-G-221

Dr. Tina Huber-Purtschert

attorney at law and public notary
tina.huber-purtschert@uzh.ch

Swiss Contract and Dr. Tina Huber-Purtschert Page 1

Tort Law
Overview

I. Objectives
II. Literature in English
III. Translations
IV.Useful Links
V. Code of Obligations: Structure
VI.Swiss Contract and Tort Law
VII.Did we meet the Objectives?

Swiss Contract and Dr. Tina Huber-Purtschert Page 2

Tort Law
Objectives

beeing able to find the law text and secondary literature

getting to know the structure and functioning of the Swiss code of obligations

beeing able to enumerate and apply general principles of swiss contract and tort law
and beeing able to find the respective provisions in the law text

starting reflexions about the similarities and differences to the jurisdiction of the
respective „homecountry“

Swiss Contract and Dr. Tina Huber-Purtschert Page 3

Tort Law
Literature in English

Law of Obligations
 HUBER-PURTSCHERT TINA, Law of Obligations, in: Marc Thommen (ed.), Introduction to
Swiss Law, Berlin/Berne 2018, pp. 305

Contract and Tort Law

 BUCHER EUGEN, The Law of Contracts (Chapter 8), in: François Dessemontet and Tuğrul
Ansay (eds.), Introduction to Swiss Law, 3rd ed., The Hague 2004, pp. 107-1144
 TERCIER PIERRE / DREYER DOMINIQUE, Torts (Chapter 9), in: François Dessemontet and
Tuğrul Ansay (eds.), Introduction to Swiss Law, 3rd ed., The Hague 2004, pp. 145-164

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 4

Translations

English Translations of the Swiss Code of Obligations

 http://www.admin.ch/ch/e/rs/2/220.en.pdf

 Federal Office of Justice (ed.): Swiss law (Civil Code, Code of Obligations, Private International
Law: Arbitration), Berne 2012
 Swiss-American Chamber of Commerce (ed.): Swiss Code of Obligations I, Contract Law (Articles
1-551), 6th ed., Zurich 2011

An English version of each article of the code of obligations can also be found in:

 Amstutz Marc et al (eds.): Handkommentar zum Schweizer Privatrecht, 3rd ed., 10 volumes,
Zurich/Basel/Geneva 2016

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 5

Useful Links

Federal Acts and Ordinances:

www.admin.ch/bundesrecht or www.bundesrecht.admin.ch (choose EN)

The Jurisdiction of the Federal Supreme Court:

www.bger.ch

Federal and Cantonal Jurisdiction, Literature

(especially Law Journals and Commentaries):
www.swisslex.ch; www.legalis.ch

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 6

Swiss Code of Obligations: Structure (I/II)

 federal act on the amendment of the Swiss Civil Code (part five: Code of Obligations)
 No. 220 (classified compilation)
 in force since January 1th, 1912

Contract and Tort Law Company Law (including Law on Securities)

Division One Division Two Division Three Division Four Division Five
General Provisions Types of Contractual Commercial The Commercial Negotiable
(arts. 1-183 CO) Relationship Enterprises and Register, Busi- Securities
(arts. 184-551 CO) the Cooperative ness Names (arts. 965-1186 CO)
(arts. 552-926 CO) and Commercial
Accounting
(arts. 927-964 CO)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 7

Swiss Code of Obligations: Structure (II/II)

Other federal acts (ordinances) beside the Swiss Code of Obligations (selection):

Contract and Tort Law Company Law

 Convention of International Sale of Goods  Merger Act (No. 221.301)

(No. 0.221.211.1), «CISG»  Ordinance on the Commercial Register
 Consumer Credits Act (No. 221.411)
(No. 221.214.1)  Fair Trade Act (No. 241)
 Product Liability Act  Cartel Act (No. 251)
(No. 221.112.944)  Banking Act (No. 952.0)
 Package Travel Act (No. 944.3)  Stock Exchange Act (No. 954.1)
 Collective Investement Schemes Act (No. 951.31)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 8

Swiss Contract and Tort Law:
Overview
a) Principles
b) Conclusion of a contract
c) Interpretation of a contract
d) Defects in the conclusion of a contract
e) Defects in consent
f) Unfair advantage
g) Claims according to the general provisions of the CO
h) Quasi-contractual claims
i) Time limits
j) Types of contractual relationship
k) Innominate contracts
Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 9
a) Principles

Freedom of contract

Freedom…
 to conclude or not conclude a contract
 to choose the contractual partner
 to establish the contracts content
 of formality
 to terminate or alter a contract

(Unless there is a mandatory legal provision.)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 10

b) Conclusion of a contract (I/II)

Conclusion of the contract, art. 1 CO

«1The conclusion of a contract requires a mutual expression of intent by the parties.»

«2The expression of intent may be express or implied.»

e.g. contract of sales, art. 185 CO:

Consensus  Basic points that have to be determined: the
 parties must consent in every basic point price of the good and the good itself.
of the contract (essentialia negotii)
 Less important points may be e.g.: the place
 less important points may be left open or the time of fulfillment of the contract.

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 11

b) Conclusion of a contract (II/II)

offer

A B
acceptance

offer

counter offer = modified acceptance

A B
acceptance

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 12

c) Interpretation of a contract (I/II)

Principle of will: subjective interpretation  natural consensus

art. 18 para. 1 CO:

«1[…] the true and common intention of the parties must be ascertained without dwelling on any
inexact expressions or designations they may have used either in error or by way of disguising the
true nature of the agreement.»

But: What is to do when there is a doubt about the true and common intention of the parties?

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 13

c) Interpretation of a contract (II/II)

Principle of good faith: objective interpretation  normative consensus

Acting in good faith, A declaration of intention is understood the way

art. 2 CC (Civil Code) the other party of the contract could and did in
good faith understand it.
«1 Every person must act in good faith in the
exercise of his or her rights and in the
performance of his or her obligations.»

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 14

d) Defects in the conclusion of a contract

impossibility unlawfulness, non-respect orf the required form

immorality
art. 20 para. 1 CO art. 20 para. 1 CO art. 11 CO

Nullity, art. 20 CO Formal requirements and significance in

general, art. 11 CO
«1 A contract is void if its terms ar impossible,
unlawful or immoral.» «1 The validity of a contract is not subject to
compliance with any particular form unless a
«2 However, where the defect pertains only to
particular form is prescribed by law.»
certain terms of a contract, those terms alone
are void unless there is cause to assume that «2 In the absence of a any provision to the
the contract would not have been concluded contrary on the significance and effect of formal
without them.» requirements prescribed by law, the contract is
valid only if such requirements are satisfied.»

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 15

e) Defects in consent (I/II)

Fundamental Error Fraud Duress

arts. 23 et seqq. CO art. 28 CO arts. 29 et seq. CO
art. 23 CO, error art. 28 CO, fraud art. 29 CO, consent to contract
«A party labouring under fundamental error when entering «1 A party induced to «1 Where a party has entered into a
into a contract is not bound by that contract.» enter into a contract by contract under duress from the
the fraud of the other other party or a third party, he is not
art. 24 CO, cases of mistake party is not bound by it bound by that contract.»
even if his error is not
«1 An error is fundamental in the following cases in particular:
fundamental.» art. 30 CO, definition of duress
1. where the party acting in error intended to conclude a
contract different from that to which he consented; «1 A party is under duress if, in the
2.-3. ... circumstances, he has good cause
4. where the error relates to specific facts which the party to believe that there is imminent
acting in error sonsidered in good faith to be a necessary and substantial risk to his own life,
basis for the contract. limb, reputation or property or to
2... those of a person close to him.
3...» 2...»

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 16

e) Defects in consent (II/II)

Effect of an error, fraud or duress:

Defect of consent negated by ratification of the contract, art. 31 CO

«1 Where the party acting under error, fraud or duress neither declares to the other party that he
intends not to honour the contract nor seeks restitution for the performance made within one year,
the contract is deemed to have been ratified.»
«2 The one-year period runs from the time that the error or the fraud was discovered or from the
time that the duress ended.»
«3 …»

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 17

f) Unfair advantage

Unfair advantage
art. 21 CO

art. 21 CO, unfair advantage

«1 Where there is a clear discrepancy between performance and consideration under a contract
concluded as a result of one party’s exploitation of the other’s straitened circumstances,
inexperience or thoughtlessness, the injured party may may declare within one year that he will
not honour the contract and demand restitution of any performance already made.

2 The one-year period runs from the time that the error or the fraud was discovered or from the time
that the duress ended.

3 ...»

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 18

Discussion

Have a «mini-conference» (5‘) with your neighbour and find examples for:
– null/void contracts
– voidable contracts

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 19

g) Claims according to the general provisions of the CO (I/VII)

1. Contractual claims

2. Unjust enrichment

3. Obligations in tort

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 20

g) Claims according to the general provisions of the CO (II/VII)

Contractual claims and breach of contract:

non-performance Obligor’s duty to compensate – in general, art. 97 CO

«1 An obligor who fails to discharge an obligation at all or as
required must make amends for the resulting loss or damage
defective performance unless he can prove that he was not at fault.»

delayed performance

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 21

g) Claims according to the general provisions of the CO (III/VII)

Prerequisites for a liability after art. 97 CO:

 damage

 breach of the contract

 causality between the damage and the breach

 misconduct attributable to the obligor (assumed)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 22

g) Claims according to the general provisions of the CO (IV/VII)

Default of obligor (arts. 102 et seqq. CO)

Requirement, art. 102 CO

«1 Where an obligation is due, the obligor is in default as soon as he receives a formal reminder
from the obligee.»
«2 Where a deadline for performance of the obligation has been set by agreement or as a result
of a duly exercised right of termination reserved by one party, the obligor is automatically in
default on expiry of the deadline.»

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 23

g) Claims according to the general provisions of the CO (V/VII)
no performance rendered

reminder provided (CO 102 I) reminder not necess.(CO 102 II)

default

new time limit (CO 107 I) no need for a new time limit (CO 108)

obligee may choose

compel performance (CO 107 II) forego subsequent performance and (CO 107 II)
in addition to suing for damages
in connection with the delay claim damages for withdraw from the contract
(CO 103 et seqq.) non-performance

positive interest negative interest

(CO 107 II) (CO 109 II)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 24

Discussion

Anna‘s preparations for her wedding on Friday October 25th 2019

 Wedding dress ordered, agreement that dress will be finished 3 weeks before wedding
day, dressmaker has not even started, other dressmaker can tailor one in a hurry, which
costs 1/3 more than the originally ordered one.
 New car ordered quite some time ago, it did not arrive yet, but the couple wants to go
on the honeymoon with it.
 White almonds («confetti») ordered. Anna‘s intention was to decorate the wedding table
with them. The almonds did not arrive. The couple decides that the flower decoration will
be so abundant, that they are not needed any more.

Today (Friday, 4th October 2019) we are three weeks beofore the wedding.
How should Anna proceed? Discuss with your neighbour. (10’)
Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 25
g) Claims according to the general provisions of the CO (VI/VII)

Unjust enrichment:

arts. 62-67 CO Requirement – in general, art. 62 CO

«1 A person who has enriched himself without just cause at the
expense of another is obliged to make restitution.»

Prerequisites  enrichment of a person

for a restitution according to  (loss of property/assets of another person)
art. 62 CO
 no justification for the enrichment

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 26

g) Claims according to the general provisions of the CO (VII/VII)

Obligations in tort:

arts. 41-61 CO General principles – conditions of liability, art. 41 CO

«1 A person who unlawfully causes loss or damage to another,
whether willfully or negligently, is obliged to provide
compensation.»

Prerequisites  damage
for a valid claim according to  illegality
art. 41 CO
 causality between the damage and the illegality
 misconduct attributable to the defendant

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 27

h) Quasi-contractual claims (I/II)

Quasi-contractual claims

 parties interact in a contractual context but act without a contract

 (at least partial) application of contractual provisions leds to a more appropriate result than
application of non-contractual ones

 CO provides only a few quasi-contractual claims, e.g. art. 26 para. 1 CO

 Court-practice and doctrine widened the category of quasi-contractual claims

 Liability after inspired confidence based on trust

 Liability for the fault in concluding a contract (culpa in contrahendo = c.i.c)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 28

h) Quasi-contractual claims (II/II)

Landmark Case: Swissair-Case (BGE 120 II 331)

Liability after inspired confidence based on trust introduced

 Claimant concluded a contract with a subsidiary company of the Swissair Group concerning membership
rights to use luxurious residences near golf courses and paid CHF 90’000.

 Project came to nothing, subsidiary company went bankrupt.

 Claimant had no contractual claim nor obligation in tort against Swissair.

 Federal Supreme Court recognised liability after inspired confidence based on trust of Swissair since
 the susidiary company emphasized in publicity heavily its affiliation to the Swissair group and the latter’s approval
of the project

 Swissair group hat tolerated the behaviour of the subsidiary company.

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 29

f) Time limits (I/II)

(almost) all claims become time-barred

Contract law art. 127 CO after ten years unless otherwise provided by federal civil
law.

art. 128 CO after five years:

• rent, interest on capital, other periodic payments
• claims in connection with delivery of food, lodging, hotel
• claims in connection with work of trades-/craftsmen,
medical treatments, legal representatives, notaries, work
of employees

art. 131 CO Limitation period is counted from the moment debt becomes
due
Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 30
f) Time limits (II/II)

obligations in tort art. 60 CO one year from the date on which the injured party became
aware of the loss/damage and of the identity of the person
liable; in any event ten years after the date on which the
loss/damage was caused

unjust enrichment art. 67 CO one year after the date on which the injured party learned of
his claim and in any event ten years after the date on which
the claim first arose
new arts. 60, 67 CO three years (relative time limit)
January 1st 2020
arts. 60, 128 CO twenty years (absolute time limit) when killing or bodily
injury of a human

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 31

j) Types of contractual relationship (I/X)

Nominate contracts (codified contracts)

 sale and exchange (arts. 184-238 CO)  agency without authority (arts. 419-424 CO)
 gifts (arts. 239-252 CO)  commission contract (arts. 425-439 CO)
 lease and usufructuary lease (arts. 253-304 CO)  contract of carriage (arts. 440-457 CO)
 loan (arts. 305-318 CO)  payment instruction (arts. 466-471 CO)
 employment contracts (arts. 319-362 CO)  contract of bailment (arts. 472-491)
 contract for work and services  contract of surety (arts. 492-512 CO)
(arts. 363-379 CO)  gambling and betting (arts. 513-515 CO)
 publishing contract (arts. 380-393 CO)  life annuity contract and lifetime maintenance
 agency contracts (arts. 394-418 CO) agreement
(arts. 516-529 CO)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 32

j) Types of contractual relationship (II/X)

Nominate contracts (codified contracts)

Secondary terms, art. 2 CO

«1 Where the parties have agreed on all essential terms, it is presumed that the contract will be
binding […].»

characterized by standard principal obligations of the contractual parties

(«standard» essentialia negotii)

every type of contract has his own «particularities», (depending also on the
fact, how much protection is needed in the eyes of legislation for the «weaker»
party)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 33

j) Types of contractual relationship (III/X)

Nominate contracts (codified contracts)

Sale, art. 184 CO

 Seller:
«deliver the item sold and Chattel sale,
transfer ownership» arts. 187-215 CO

 Buyer:
«payment of the sale
Sale of immovable property,
price»
arts. 216-221 CO

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 34

j) Types of contractual relationship (IV/X)

Nominate contracts (codified contracts)

Lease, Usufructuary lease,

art. 253 CO art. 275 CO
 landlord or lessor:  lessor:
granting «a tenant or lessee the use of granting a «lessee the use of a productive
an object» object or right and the benefit of its fruits
or proceeds»
 tenant or lessee:
payment of a rent  lessee:
payment of a rent

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 35

j) Types of contractual relationship (V/X)

Nominate contracts (codified contracts)

individual employment contract, apprenticeship contract

(arts. 344-346a CO)
art. 319 CO
 employee:
commercial traveller‘s contract
«work in the service of the employer for (arts. 347-350a CO)
a limited or unlimited period»
homeworker‘s contract
 employer:
(arts. 351-354 CO)
payment of «a salary based on the
amount of worked time (time wage) or  collective employment contract (arts. 356-358 CO)
the tasks performed (piece work)»  standard employment contract (arts. 359-360f CO)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 36

j) Types of contractual relationship (VI/X)

Nominate contracts (codified contracts)

contract for work and simple agency contract, art. 394 CO

services, art. 363 CO
 agent:
conduct a business or provide a service
 contractor:  principal:
«carry out work» paying a remuneration if agreed or customary
 customer:
payment for the work

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 37

j) Types of contractual relationship (VII/X)

Landmark Case: Market Value Estimate-Case (BGE 127 III 328) (I/II)

Delineation between a contract for work and services and a simple agency contract

 Matter in dispute was market value estimate of the defendant of a piece of real estate

 Estimate was basis of claimant’s share in an inheritance case, five years after the estimate the
claimant sold the real estate for a price almost 25% below the estimate

 Claimant sued the estimator for the damage, since his inheritance share had been calculated on
an inaccurate high estimate of the real estat’s value

 To define rules of liability which the defendant’s conduct was to be measured against, Federal
Supreme Court started by considering what type of contract had been concluded

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 38

j) Types of contractual relationship (VIII/X)

Landmark Case: Market Value Estimate-Case (BGE 127 III 328) (II/II)

Delineation between a contract for work and services and a simple agency contract

 Conclusion: Estimate of a real estate is based on discretion and the result of such an expert
opinion cannot be measured objectively

 contract qualified as a simple agency contract (and not contract for work and services)

 case is key example for practical importance of delineating between a contract for work and

services and a simple agency contract

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 39

j) Types of contractual relationship (IX/X)

Nominate contracts (codified contracts)

contract for work and simple agency contract, art. 394 CO

services, art. 363 CO
 agent:
conduct a business or provide a service
 contractor:  principal:
«carry out work» paying a remuneration if agreed or customary
 customer: art. 404 para. 1 CO
payment for the work
«The agency contract may be revoked or terminated at any time
by either party.»

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 40

j) Types of contractual relationship (X/X)

Landmark Case: Revocability of Simple Agency Contracts (BGE 115 II 464)

Revocability at any time of simple agency contract is compulsory

 Advisory contract concerning accounting services

 According to Federal Supreme Court art. 404 para. 1 CO is compulsory and can not be altered by
contractual provisions

 Court negated the argument, that the revocability at any time of simple agency contracts should
be restricted to contracts governed by personal trust and

 according to the Court clear wording of the law text does not allow for such a differentiation

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 41

Discussion

1. Barbara lends Eva her electro bike for CHF 50/month.

2. Matteo hands Selina his bike over for CHF 250.
3. Maria from Martha‘s Homservices Ltd cleans every week the flat of the Müller family.
4. Natalia does hair extensions at the hairdressers for CHF 300.
5. Natalia does a hair implantation at the sunshine clinic for CHF 1‘000.
6. Dr. Kobler estimates the value of the brilliant brooch for Karin.
7. A mother hands her house over to her daughter; the daughter takes over the mortgage
which amounts to 50% of the value of the house.
8. For one month, Peter allows Martin to use his car for free.

What kind of contract do you identify? Discuss with your neighbour. (5’)
Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 42
k) Innominate contracts

Innominate contracts (non-codified contracts)

Principle of freedom of contract 

parties can conclude contracts, that do not follow characteristics of a nominate (= codified) contract

Examples:  «leasing» contract (whicht is not the same as a lease contract!)

 exclusive distribution contract
 licence contract

Handling:  General provisions of the CO apply

 Legal pratice and doctrine regulate where provisions of the nominate contracts
are to be applied directly or analogously

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 43

Discussion

Think about the jurisdiction of your own country.

 Where do you see the main difference in contract and tort law to Switzerland?

 Are there any questions regarding swiss contract and tort law?

Discuss with your neighbour. (5’)

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 44

Did we meet the objectives?

beeing able to find the law text and secondary literature

getting to know the structure and functioning of the Swiss code of

obligations

beeing able to enumerate and apply general principles of swiss contract and
tort law and beeing able to find the respective provisions in the law text

starting reflexions about the similarities and differences to the jurisdiction of

the respective „homecountry“

Swiss Contract and Tort Law Dr. Tina Huber-Purtschert Page 45