4. SCHADENSVERLAGERUNG AND TRANSFERRED LOSS

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liquidation’ JuS 2001, 833; Peters, ‘Zum Problem der Drittschadensliquidation’ AcP 180 (1980) 329; Ries, ‘Grundprobleme der Drittschadensliquidation und des Vertrags mit Schutzwirkung für Dritte’ JA 1982, 453; von Schröter, ‘Die Haftung für Drittschäden’ Jura 1997, 343; Tägert, Die Geltendmachung des Drittschadens (1938).

(a) Preliminary Observations

The doctrine of transferred loss is meant to ensure that the defaulting party in the contract does not benefit from his fault in those cases where the loss has been shifted from the creditor to a third party. If this exception to the notion of relativity of contracts had not been accepted, the defaulting party would not be liable to his creditor since the latter has suffered no loss; nor would he be liable to the third party in contract in the absence of any contractual link between them. Likewise, since the harm involved is pure economic loss, in German law there would be no chance of an action in tort. Thus, what makes it necessary to create a new mechanism is the fact that in some cases the party who has suffered the loss has no right to claim and the party who has the right to claim has suffered no loss. From this situation emerged the notion of Drittschadensliquidation, which allows the contractual creditor to claim (liquidate) the loss suffered by the third party as a result of the non-execution or faulty execution of the contract by the contractual debtor. This theoretical analysis is best understood through some concrete examples, although perhaps one can state that what all these cases have in common are two factors. First, there is a ‘fortuitous’ shift of liability as the loss is transferred from the contractual creditor to the third party. Secondly, the fear of opening of the floodgates (the ‘shop-soiled argument of the timorous’ as Professor John Fleming has called it in his Introduction to the Law of Torts (2nd edn, 1985), p 3) does not arise here precisely because only one person can suffer loss in these cases.

The case law probably goes back to a decision of the Court of Appeal of Lübeck, which allowed an agent to claim damages for loss suffered by his ‘undisclosed’ principal (Seufferts Archiv, II (1857) 36, 37). It will of course be remembered from chapter 2 that German law does not recognise the concept of undisclosed agency, so in such a situation the principal who suffered the loss had no right to claim for its compensation. Allowing the agent to claim for the third party’s loss accounts for the name of the device: Drittschadensliquidation) (see for details: von Caemmerer, ZHR 127 (1965) 241).

Recovery of third party loss is not governed by any provision of the BGB. Some commissioners had proposed a general rule as to when third party loss is recoverable, but it was not in the end included (see Mugdan, Die gesamten Materialien zum Bürgerlichen Gesetzbuch, II (1899), pp 517–18). The majority was of the opinion that the problem was too controversial. Like the English Law Commission in 1996 (Report No 242), the BGB Commission one hundred years earlier decided to leave the question unanswered and expressed the conviction that the courts would be able to develop a solution outside the code. It is important to note from the outset that recovery of third party loss is possible only in special cases. Like English law, the BGB proceeds on the assumption that every party to a contract may only recover his own loss. This is usually referred to as the ‘doctrine of the creditor’s interest’ (Dogma des Gläubigerinteresses)—an equivalent to the English notion of the compensatory nature of damages. The concept of Drittschadensliquidation is thus an exception to the doctrine of the creditor’s interest.

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(b) Theoretical Basis

The theoretical basis of Drittschadensliquidation has remained somewhat controversial. It should not be concealed that some academics doubt whether the concept is needed at all. They prefer to explain the cases discussed under this heading on an alternative basis. Usually the loss is said to be suffered not by the third party but by the promisee himself. Yet this analysis is not that far removed from the transferred loss explanation. For, in a second step, these writers argue that damages are nevertheless recovered on behalf of the third party. Accordingly, either the third party has a right to have the right assigned or a right to claim the proceeds of the action by the promisee (see eg, Büdenbender, ‘Wechselwirkungen zwischen Vorteilsausgleichung und Drittschadensliquidation’). The difference in practice is not very great and we may thus safely concentrate on the development of the doctrine by the courts.

There was a time when German judges also thought that the theoretical basis of awarding third party damages was agreement. The peak of this (not always consistent) line of argument was the decision of the RG in RGZ 170, 246, where construction of the contract was employed in order to hold that the defendant (who had contracted to repair a cold store) had granted the plaintiff (a city council which owned it) the right to sue for any loss suffered by third parties (the butchers whose meat in the cold store was spoiled as a result of careless repair work). The BGH endorsed the inten- tion-based reasoning of the RG in BGHZ 15, 224. In this case a carrier had contracted with a forwarding agent. Owing to the fault of the latter, the authorities in the Soviet zone of Germany had confiscated a lorry, which belonged to the carrier’s wife. The court held that the contract between the carrier and the forwarding agent contained an implied term allowing the carrier to claim damages on behalf of the owner of the lorry. Yet in this decision the implied term reasoning already seems open to question. The general rule is that if there is a gap in the contract, the respective term must be a compelling and self-evident conclusion from the agreement as a whole such that, unless the term is implied, the result would be in conflict with what was in fact agreed (see chapter 3 for a fuller explanation). In this early decision, the BGH did not even attempt to show why the actual contract necessitated the third party term. On the contrary, the court proceeded on the basis that the promisor need not have contemplated that the truck belonged to a third party. The reason for implying the term was simply that any solution other than allowing recovery of third party loss would unduly benefit the promisor, who would escape liability for the breach of the contract. The use of such a policy argument surely cast doubts on the intention test.

The drawbacks of an implied term test were openly admitted only a few years later in BGHZ 40, 91, case no 71. The plaintiff bought leather from the defendant and made it into belts. Most of the belts were sold to the firm KF. The leather was defective and produced stains where the belt met with other material. KF had as a result suffered loss, but it was common ground that KF had made no claim for this sum against the plaintiff and the plaintiff did not contend that it was liable to KF. The plaintiff nevertheless claimed to be entitled to sue for the loss suffered by its purchasers. The Court of Appeal based its decision on an implied term and held that the plaintiff was entitled to sue for any loss suffered by KF. The BGH, on the other hand, held that such an approach amounted to a fiction. Nothing of what the parties said justified the finding of a term that the plaintiff should be able to sue for damage

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suffered by its purchasers. The express terms of the contract were not obviously inadequate. Experience showed that, in reality, businessmen are principally interested in protecting themselves. Moreover, claims on behalf of sub-buyers are ‘unpredictable in their extent and incapable of being covered in an economically satisfactory manner by increasing the sales price or taking out insurance.’ (A similar conclusion was reached in Bence Graphics International Ltd v Fasson UK Ltd [1998] QB 87.) There was therefore no reason to deviate from the general rule. As a consequence, the claim of the contractor on behalf of his purchasers was rejected.

The decision was reaffirmed in 1968 in a seminal case that established a stricter (though not strict) regime of tortious product liability, the ‘chicken pest case’ (BGHZ 51, 91, reproduced in The German Law of Torts, case no 61, p 555 et seq). It was held that Drittschadensliquidation could not be extended to cover product liability situations. The veterinarian could not demand from the pharmaceutical company (which had sold him defective vaccine) the loss suffered by the owner of chickens (which died as a result of inoculation).

What is apparent from this development is a gradual departure from pinning liability on (an often strained, and sometimes downright fictitious,) interpretation of the parties’ intention(s). Instead, the BGH now focuses on objective requirements for claims in respect of a third party’s loss. The aforementioned BGHZ 40, 91, case no 71, contains a useful summary of the underlying rationale. A claim may be available only ‘where all the damage due to the harmful conduct of the obligor is suffered by a third party rather than by the person with title to sue.’ Thus, ‘there must be only one damage, one which the claimant would have suffered if the protected interest had been vested in him.’ The doctrine was not triggered by the mere fact that, in addition to the person with title to sue, a third party has suffered harm: ‘allowing a person to sue for damage to a third party must not be permitted to bring about any extension of liability founded in law or contract by duplicating the victims whom the person causing the harm must satisfy.’ In the ‘chicken pest case’ the BGH confirmed this analysis once again and added that: ‘Only in special cases have the courts admitted exceptions, namely where special legal relations between the creditor under the contract and the beneficiary of the protected interest cause the interest to be ‘shifted’ on to the third party, so that as a matter of law the damage is done to him, and not to the creditor.’ This was denied, for instance, in the famous ‘cable cases’ (BGH NJW 1977, 2208, case no 72; reproduced also in The German Law of Torts, case no 13, p 211; cf Spartan Steel & Alloys Ltd v Martin & Co (Contractors) Ltd [1973] 1 QB 27 and see also Martindale v Duncan [1973] 1 WLR 574).

We can see now more clearly why it was necessary to develop the notion of Vertrag mit Schutzwirkung examined in the previous sub-section. For in these situations the risk of liability of the promisor is increased. To put it simply, the range of plaintiffs who can rely on a contract and who can sue the promisor directly is potentially indeterminate. The delicate balance between imposing contractual liability and the danger of blurring the boundaries between contract and tort is achieved by confining Drittschadensliquidation to cases where there is one loss, one interest at stake and the third party did not sustain loss ‘in addition to’ the promisee. This means that loss resulting from a breach of contract typically suffered by the promisee is actually suffered by a third party; or to put it differently: the promisee would have been harmed in the very same interest had it not been shifted to the third party. In this sense, the concept of Drittschadensliquidation is indeed one of ‘transferred’ loss.

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Two consequences follow from this. First, it is irrelevant whether the third party is entitled to a tortious claim that covers the loss (BGH NJW 1985, 2411, reproduced in The German Law of Torts, case no 25, p 289). The second is of equal practical importance. The courts do not allow enrichment of the promisee at the expense of the third party. The courts are keen to emphasise that damages are recovered on behalf of the third party. Therefore, the BGH is willing to ‘create’ contractual remedies for the third party against the promisee; for instance, to imply a duty on the promisee to assign the right of action to the third party or to account for the damages recovered. The court has said recently that it would be difficult to imagine a Drittschadensliquidation case where such a right to assignment would not exist (BGH ZIP 1998, 511, 512). Usually the legal basis remains open. One possibility is an implied term, the other an analogy with § 285 BGB. Moreover, if the third party does not wish to claim for its loss, the basis of the promisee’s claim in respect of that loss collapses (eg, RGZ 115, 419, 426; BGH WM 1987, 581, 582). The concept of Drittschadensliquidation governs not only the relationship between the contracting parties, but the rights of the third party against the promisee.

However, despite several attempts at further rationalisation, the law has grown in a patchy way. The judicial exceptions to the doctrine of the creditor’s interest gathered more or less loosely under the heading of Drittschadensliquidation are to a certain extent founded on an abstract concept, as explained, but they have been specifically developed in particular types of contractual situations. There are three principal lines of cases in which such claims have been successful. An overview of the case law is given in the BGHZ 40, 91, case no 71, already mentioned. Ironically, all types of situations had been part of the original proposal to include the idea of awarding damages for a third party’s loss in the BGB. Cases falling outside these main groups are controversial; the courts are reluctant to subject the doctrine of the creditor’s interest to further exceptions (eg, BGHZ 133, 36).

(c) Risk Cases

In this line of cases, there is a ‘transfer of risk’ from the promisee to a third party. The promisee is allowed to recover damages in respect of that party’s loss. The new doctrine was to find a wider application in the context of the law of sales whenever risk and property do not pass at the same time. Paragraph 447 BGB regulates one such case. If the buyer has requested the seller to dispatch the goods sold to a place other than the place of performance, the risk passes to the buyer as soon as the seller has delivered the goods to the forwarder, freighter etc, even though the property in the goods is not normally transferred to the buyer until delivery. Thus, the seller still has a claim against the person who damaged the goods during transit, even though he has suffered no loss. The buyer, on the other hand, has suffered a loss, but has no valid claim. In German law, as we have already seen above, it is well established that the seller can recover from the carrier in order to pay the money over to the buyer. Alternatively, if the seller does not co-operate in this, the buyer can have this right assigned to him by operation of law (§ 285 BGB). (See: RGZ 62, 331; BGH VersR 1972, 1138; BGH VersR 1976, 168.) It is interesting to note that the reasoning would also found a tort action by the owner on behalf of the purchaser who is on risk but has not yet acquired ownership of the goods when the damage occurred (BGHZ 49, 357,

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case no 73). In this case, the purchaser brought an action in tort as assignee of the rights of the owner against the carrier. Therefore, the court did not need to decide whether the damages awarded compensated the loss of the owner, the vendor or that of a third party, ie, the party at risk, namely the purchaser. This would only make a difference, the court indicated, where the loss of the third party would be idiosyncratic, ie, exceed that of the vendor. In the case at hand this was not the situation.

This case law, incidentally, would be applicable not only to terrestrial transport, but to carriage of goods by sea so that it would neatly solve the problem that perplexed the English courts in The Aliakmon ([1986] AC 785) which in the end had to be solved by means of legislation (see the discussion of this case, below). Indeed, the Germanic approach may offer one advantage over the attempted English tort solution. Being a contractually-flavoured action, it ensures that the defences available to the debtor/carrier against the creditor/seller are also available against the third party/plaintiff; and this may be a neater way of achieving this desirable result than by trying to fashion a tort duty (towards the third party) in accordance with the underlying contract between seller and carrier. (See on this, Kötz (1990) 10 Tel Aviv Univ Studies in Law 195, 211; Markesinis (1987) 103 LQR 354 and ‘Doctrinal Clarity in Tort Litigation’ in (1991) 25 The International Lawyer 953.)

Parties to contracts of carriage of goods by sea regularly use bills of lading (Konnossement). In such cases, the Hague-Visby Rules may govern the contract of carriage. The relevant provisions of the HGB are mostly contained in Book 5 (‘Sea Trade’), §§ 476–905. The lawful holder of a bill of lading is entitled to the rights under the bill of lading: § 364 I HGB. (For English law in this area see, generally, Treitel and Reynolds, Carver on Bills of Lading (2001).) Although the problem does not seem to have generated much litigation, recovery of damages in respect of a third party’s loss in actions against carriers is regarded as both desirable and possible.

This was held by the BGH as early as 1957 in a seminal case concerning a ship named ‘Aspirator’. (BGHZ 25, 250.) The action was by the consignor against the shipowner. The shipowner had issued bills of lading in respect of the cargo. When the goods were delivered at the port of destination, their weight was considerably less than what was stated in the bill of lading. In the meantime, the consignor had sold the goods and his buyer had in turn endorsed the bill of lading to a forwarder, company D. However, the buyer bought (and paid for) the actual quantity delivered and not that stated in the bill of lading. The consignor claimed for the difference. The BGH held that the consignor could recover in principle. First, it was confirmed that, generally speaking, the correct nominal plaintiff would have been the company D in its capacity as lawful holder of the bill of lading. However, the breach of contract by the carrier caused loss to the original holder of the bill of lading, the plaintiff consignor, and not to the present holder of the bill of lading. Hence, the latter’s right to recover damages for breach of contract was of no avail unless he were allowed to recover damages on behalf of the original holder of the bill of lading. The BGH clarified that this was indeed the case. The present holder of the bill of lading, the company D, could have claimed damages on behalf of the plaintiff according to the doctrine of Drittschadensliquidation; ie, the company D could have recovered damages in respect of the consignor’s loss (BGHZ 25, 250, 258).

Overall it can be stated that German courts are ‘generous’ in allowing recovery of damages in respect of a third party’s loss and hostile to technical defences such as that

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that the wrong nominal plaintiff brought the action or that the claimant was not the party who sustained the loss. (See eg, Münchener Kommentar HGB- Basedow, vol 7 (1997), § 429 HGB Rn. 52. See also, the line of cases concerning carriage by land, discussed above, section 2(a)(vi): here the contract of carriage is analysed as one for the benefit of a third party and in addition the promisor is not allowed to object that the loss arising from damage to or loss of the goods has been shifted to a third party.)

By contrast, carriage of goods by sea has given rise to formidable difficulties in English law and we may briefly allude to one line of cases in which the problem of third party loss became acute. The Aliakmon [1985] QB 350 (CA); [1986] AC 785 (HL) concerned an action by the consignee buyers (who were on risk) against the shipowner for damage to goods caused by bad stowage. The sale contract was not performed as contemplated. The buyers had problems in paying the price. The Court of Appeal held that, by reason of section 19(1) of the Sale of Goods Act 1979, the true inference from the negotiations between the parties was that the seller had retained the ownership of the goods notwithstanding the delivery of the bill of lading to the buyers; and consequently that section 1 of the 1855 Act did not transfer to the buyers any rights of suit under the bills of lading contract.

The buyers, however, had failed to have the sellers’ right against the carrier assigned to them. Therefore, the rule developed in The Albazero case ([1977] AC 774) could not be applied. In this case Lord Diplock stated in a famous passage of his speech (at 847):

The only way in which I find it possible to rationalise the rule in Dunlop v Lambert so that it may fit into the pattern of English law is to treat it as an application of the principle, accepted also in relation to policies of insurance on goods, that in a commercial contract concerning goods where it is in the contemplation of the parties that the proprietary interests in the goods may be transferred from one owner to another after the contract has been entered into and before the breach which causes loss or damage to the goods, an original party to the contract, if such be the intention of them both, is to be treated in law as having entered into the contract for the benefit of all persons who have or may acquire an interest in the goods before they are lost or damaged, and is entitled to recover by way of damages for breach of contract the actual loss sustained by those for whose benefit the contract is entered into.

In The Aliakmon, Robert Goff LJ (as he then was) remarked that the rule in The Albazero was of no value where the promisee was not willing to co-operate and sue on behalf of the consignee or assign his right of suit ([1985] QB 350, 396–7). The Court of Appeal concluded that all contractual claims against the shipowners failed.

The focus was thus on the buyers’ claim in tort. It was held by the House of Lords that, since the buyers were not the owners of the goods nor had an immediate right to possession in the whole course of the carriage on the defendant’s ship, they had no right to sue in tort. Robert Goff LJ, on the other hand, submitted that there was no good reason in principle why the buyers should not have a direct cause of action against the shipowner in tort; but on the facts, the shipowners were not liable for bad stowage (at 398–401).

It is not the place here to discuss whether a direct tort action based on the ‘principle of transferred loss’ is a satisfactory solution to the problem encountered in such triangular cases, or whether the law of contract ought to provide efficient remedies to the parties to the contract of carriage contained in the bill of lading. (See, for further discussion: Unberath, Transferred Loss (2003) 117 et seq.) It suffices here to point out that a flexible approach in relation to the rights arising under the contract of carriage,

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as described in this sub-section, seems to have created few problems in German law. In the end, English law also sought the solution in the law of contract and not in the law of tort. The Bills of Lading Act 1855 transferred the contractual rights to the consignee or endorsee provided that property in the goods passed to him on or by reason of the consignment or endorsement. There remained gaps, however, for instance where property did not pass by reason of the endorsement, as in some odd cases like The Aliakmon or in the more common cases of bulk cargoes, which was the main source of difficulties (see Reynolds. ‘The Significance of Tort Claims in Respect of Carriage by Sea’ [1986] LMCLQ 97, 108 and 110). The most significant change for our purposes is that the transfer of the rights under the contract of carriage contained in or evidenced in the bill of lading depends not on the passing of property, but on the claimant becoming the lawful holder of the bill of lading. In The Aliakmon, the sellers retained the right of disposal of the goods and the buyers could therefore not rely on the bill of lading. Under section 2(1) of the 1992 Act, they could now have recovered as holders of the bill of lading. This was regarded as highly desirable, especially by Lord Goff of Chieveley, who welcomed the result of The Aliakmon being reversed by statute. (White v Jones [1995] 2 AC 207, 265. Lord Goff introduced the Bill himself as a private peer’s measure in the House of Lords.) Furthermore, section 2(4) of the Carriage of Goods by Sea Act 1992 (which repealed the Bills of Lading Act 1855) is remarkable because it is the only statutory provision in which a (limited) right to

recover a third party’s loss in a contractual action is expressly confirmed.

Finally, it should be noted that cases such as The Aliakmon are not covered by the Contracts (Rights of Third Parties) Act 1999. Section 6(5) excludes from the application of the Act contracts of carriage of goods by sea covered by the Carriage of Goods by Sea Act 1992.

(c) Indirect Representation

A second line of cases (historically, as explained, the origin of the doctrine) involves what has in chapter 2 been called ‘indirect’ representation. A party concludes a contract in his own name but at the instance and on the account of a third party. The person executing the order can sue for loss suffered by the person giving it. The commission agent is the paradigmatic case, discussed in detail in chapter 2, section 6(f), p 117. It will be recalled that German law does not accept undisclosed agency. But there are other examples. Freight forwarders, regulated by Book 4, part 5 of the HGB, are also normally allowed to recover substantial damages from the carrier employed by him ‘on behalf of’ (though not as agent of (within the meaning of § 164 BGB)) the consignor or the consignee respectively (eg, RGZ 75, 169; 115, 419). A forwarder undertakes to organise the transport while sub-contractors carry out the actual transport. The forwarder enters into the sub-contracts as ‘indirect agent’ of the consignor. The consignor is entitled to sue only after the forwarder’s rights have been assigned to him: § 392 I HGB. (See also, BGH VersR 1972, 274, reproduced in The German Law of Torts, case no 26, p 290, annotated at p 305, where indirect representation prompted the application of the doctrine in a construction context.)

The issue has arisen in English law in the cases of St Martins Property Corporation Ltd v Sir Robert McAlpine Ltd [1994] 1 AC 85; Darlington BC v Wiltshier Northern Ltd [1995] 1 WLR 68, and Alfred McAlpine Construction Ltd v Panatown Ltd [2001] 1

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AC 518. In this controversial line of construction cases, the defendant sought to rely on the fact that the employer did not have a proprietary interest in the subject matter of the contract at the time of the breach and did not incur any financial loss. The courts held that this ‘no-loss’ point could not in itself prevent the employer from recovering substantial damages. Otherwise the contractor would in effect enjoy an undesirable immunity in respect of breaches of contract (thus giving rise to a ‘legal black hole’). However, these cases are not easily reconciled with each other and the reasoning is not always easy to follow. As a result, the right to recover damages on behalf of a third party remains somewhat uncertain. For instance, according to the majority in the Panatown case it is not available if the third party has a right of his own (even if it is only a limited right) against the promisee. Furthermore, while Lord Clyde in that important case expressly adopted a ‘transferred loss’ approach to solve the problem of the ‘legal black hole,’ Lord Goff —who had previously favoured such a principle in the Court of Appeal in The Aliakmon, referred to above—now preferred to solve the case on the basis of a far-reaching ‘performance interest’ theory. A detailed treatment of these cases must be reserved to more specialised works. (See for a brief annotation, The German Law of Torts, p 304 et seq, and more detailed examination: Unberath, Transferred Loss (2003), chapters 2 and 8; Goode, Commercial Law (3rd edn, 2004), p 117, and McKendrick, ‘The Common Law at Work: The Saga of

Alfred McAlpine Construction Ltd v Panatown Ltd’ Oxford U Commonwealth LJ [2003] 145.)

It suffices here to note that this line of cases reopens important contractual avenues in the area of construction law, after the decision of the House of Lords in Murphy v Brentwood DC [1991] 1 AC 398 made it all the more difficult to recover pure economic loss in the tort of negligence in relation to latent defects in buildings. The reasoning clearly reminds one of the approach of the German courts in Drittschadensliquidation cases. One could venture the thought that comparative law might be of assistance in developing the law further. The right of the third party to have the promisee’s right assigned or to be able to claim the proceeds of an action by the promisee is an example in point. The German courts achieved such a neat solution with little effort, whereas the English courts have had considerable difficulties in solving cases where promisee and third party were not willing to co-operate.

(d) Taking Care of Another’s Goods

A third class of cases is that where a person is looking after the goods of another. Consider the following example: BGH NJW 1985, 2411 reproduced in The German Law of Torts, case no 25, p 289. The first plaintiff had a continuous business relationship with the defendant, a forwarding agent, and stored goods in one of his warehouses. The second plaintiff owned the goods. The first plaintiff was the parent company of the second plaintiff. Some of the goods were stolen. Both plaintiffs sought to obtain declaratory judgments to the effect that the defendant was liable in damages for the loss of the goods. The second plaintiff’s claim was exclusively founded on the law of delict. It was held that this direct right of action of the second plaintiff did not prevent the first plaintiff from pursuing his contractual claim based on Drittschadensliquidation against the defendant. The BGH held that the fact that the second plaintiff suffered the loss and not the first plaintiff was not a bar to that

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right of action: ‘[i]n cases like the present, where a bailor enters into a contract with a bailee whereunder the bailee undertakes to store and guard the goods the promisee or bailor is entitled to recover damages in respect of the loss suffered by the third party owner of the goods.’ The second context in which Drittschadensliquidation has been applied resembles the situation in The Winkfield [1902] P 42. The bailee takes possession of another’s goods and owes certain duties of protection regarding them. If a third party contractually linked to the bailee (for instance a carrier) damages the goods, the person who suffers the loss is the owner. Contractually linked to the person responsible for the damage is, however, the person who has agreed to take care of the goods. The bailee may claim damages on behalf of the bailor (BGHZ 15, 224, 229; BGH NJW 1969, 789, 790, case no 74). A typical example arises where a person who rented a chattel enters into a contract to have it repaired. If the chattel is damaged or lost by the contracting party, then the promisee will not normally be liable to the owner of the goods and as a result will not suffer loss. However, he may claim damages on behalf of the owner. While this situation is parallel to that in The Winkfield, in German law the emphasis is on the contractual remedy. Overall, the German cases relating to contracts to take care of chattels give rise to very similar problems to those experienced in the English bailment cases. This is remarkable if one remembers that bailment is a peculiarity of English law that does not have an exact equivalent in German law.