Dresden Higher Regional Court (Oberlandesgericht Dresden – OLG Dresden) issues first appeal ruling on contract adjustment claims in the case of official closure orders (behördliche Schließungsanordnungen)

The long wait for the first ruling of an appellate court has now come to an end: On 24 February 2021, the 5th Civil Senate of the Higher Regional Court of Dresden (5 U 1782/20), which is responsible for commercial leases, reversed the judgement of the first instance and decided a 50% reduction of the basic rent should be justified.

At the Regional Court of Chemnitz (Landgericht Chemnitz), a landlord demanded the outstanding rent for the month of April 2020 from his tenant and was fully justified in this action. The Regional Court ruled that the commercial tenant is obliged to pay the full rent. For an adjustment of the contract, the Regional Court saw no need during the absence of unreasonableness of keeping the unchanged lease agreement. Thereupon, the tenant (a textile retailer) appealed against the first instance decision. From the tenant's point of view, this was at least partially successful. The OLG shared the opinion that there was neither a rental defect nor were the principles of impossibility applicable. However, an equal distribution of risk was justified according to the principles of a frustration of contract (Störung der Geschäftsgrundlage). A 50% reduction of the basic rent for the duration of the closure orders was reasonable. Neither of the parties had caused or even foreseen the frustration of contract. According to the OLG, a burden on both sides was therefore appropriate.

It is not yet known whether the appeal has been lodged against the appeal ruling. Unfortunately, no statement can be made at this time on the specific circumstances of the individual case, which must be weighed in the context of contract adjustment claims under section 313 of the German Civil Code (Bürgerliches Gesetzbuch – BGB).

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