учебный год 2023 / Kahler, Decision-Making about Suretyships under Empirical Uncertainty

freedom of contract. For in that situation neither the infringement of third people’s rights nor the necessity to protect the individual in its own interests is plausible, let alone the problem of paternalism. Thus, the basic rule applies that people are free to enter into contracts. Decisions under uncertainty have therefore to be made ‘in dubio pro libertatem’. One has in this situation to rely that the individual can protect himself. The choice of an underprotective rules does not mean that there is no protection at all but rather that in a situation of uncertainty one relies on the ability of the individual to protect himself.

For these reasons the uncertainty about the consequences of the law of suretyship supports a narrow concept of unfairness. As in the case of free speech the point is not that there is no risk of underprotection from ruinous suretyships. Instead the argument is that the involved risk in a narrow interpretation of unfairness is preferable to the risk under a broad interpretation of it. Accordingly, courts shall adopt a strategy of limitation meaning that they declare a suretyship invalid only if such a case is before them and limit its scope to narrowly defined cases. If they have to decide about borderline cases the unfairness of which depends on uncertain consequences of the adopted rules they shall rather enforce the suretyship. In clear cases in which the suretyship is unfair due to a deception about the involved risks or obvious and severe pressure from family members to enter into a suretyship the protection of the surety is, of course, legitimate. The same arguments apply for attempts to codify rules about suretyships on a European level. In that situation one has to take into account the possible consequences of different rules and shall, therefore, avoid the risk of overprotection by adopting underprotective rules. I admit that the strategy of limitation has to be made more specific because it is necessary to define concretely the class of borderline cases. Probably, many people will have different views about the question when exactly a suretyship is under these conditions unfair. But the aim was not to determine when exactly suretyships shall be regarded as fair or unfair but rather that in a situation of uncertainty a narrow interpretation of unfairness is preferable to a broad one.

The situation of uncertainty also has implications for the way courts shall make their decisions about suretyships. They shall make explicit the uncertainty about the consequences of their rules62 and the fact that these consequences have legal implications. They could, for instance, state: ‘This rule prevails as long as we do not have empirical evidence that the creditworthiness of small business is considerably diminished by it’. Although this is, at least, for German courts unusual it is necessary if the opinion of the court shall reflect the reasons for its decisions. Moreover, courts would thereby create an incentive for empirical research to overcome the uncertainty. If reliable figures show that the consequences of the adopted rules are overor underprotective the courts could overrule the precedents and refer

62 Cf. M.G. Morgan, M. Henrion (footnote 7), p 39.

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to their previous reasons stating the dependence on empirical facts.63 They would not have to change the complete reasoning but could just adapt the rules to the new empirical data. Thus the parties would not only know why a court decided as it did but also what arguments would be necessary to overrule the precedents.64

The dependence on empirical questions seems to contradict the process of constitutionalisation of private law. For at the first glance, constitutional law does not depend on uncertain empirical data because the provisions of a constitution are fundamental rules for changing historic, social and economic conditions. The process of constitutionalisation could be regarded as a process by which unchangeable fundamental rights are more and more introduced into private law. Thus it seems as if a constitutionalised private law is immune from empirical evidence about its problematic consequences. This feature is intensified by the tendency of German courts not to contradict decision by the Constitutional Court even if they were made many years ago.65 At least, the opinions of the German Supreme Court about suretyships did not reflect the possible consequences of overor underprotective rules.66 However, constitutionalisation and the open statement that certain rules depend on empirical questions do not necessarily contradict each other. For the constitutional provisions like the protection of the freedom to act in Art. 2 I of the German Constitution are abstract and do not entail detailed rules about suretyships. Therefore, in the process of application empirical questions can play a role. This is, for instance, possible when the interests of the potential sureties and creditors are weighed against the interests of the actual sureties regarding their suretyships as unfair. The criteria with which these interests are weighed can take into account which consequences different rules of suretyships have. The relevant arguments in that conflict are not all that different from the arguments discussed above. As long as the process is an open constitutionalisation, i.e. open to empirical arguments about the consequences of different rules it is compatible with the strategy of underprotection.

63Cf. the suggestion of I. SPIECKER genannt DÖHMANN (n. 22), p 77, that decisions under uncertainty have to keep open the possibility of their correction.

64Similarly, some authors suggest an approach of ‘temporalisation’ in administrative law, U. Di FABIO, Risikoentscheidungen im Rechtsstaat, Mohr Siebeck, Tübingen 1994, 306; W. HOFF- MANN-RIEM, ‘Reform des allgemeinen Verwaltungsrechts als Aufgabe’, Archiv des öffentlichen Rechts (AöR) 115 (1990), 400 at 445; M. SCHULTE, ‘Zum Umgang mit Wissen, Nichtwissen und Unsicherem Wissen im Recht’, in C. Engel, K. Halfmann, M. Schulte (footnote 8), p 351 at 356.

65It is controversial whether § 31 section 1 Bundesverfassungsgerichtsgesetz (BVerfGG) creates a bindingness of Constitutional Court’s decisions, cf. K. RENNERT, in: D. UMBACH, T. CLEMENS, Bundesverfassungsgerichtsgesetz, C.F. Müller, Heidelberg 1992, § 31 follow ups 10; SCHLAICH/ KORIOTH, Das Bundesverfassungsgericht, 5th edition, Beck, Munich 2004, pp 318.

66See BGH 29.6.1999, NJW 1999, 2584-2588 with a summary of the previous decisions.

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5Conclusion

Decisions about a suretyship have to be made under uncertainty about their consequences. There is no sufficient empirical evidence to what extent rules restricting the validity of suretyships effect the creditworthiness of potential debtors and indirectly harm the interests of sureties. It is even difficult to judge by subjective probabilities what is likely to occur. The possible consequences of different rules are, at least, in borderline cases relevant for the construction of the law of suretyship. In this situation one has to choose between the risk of underprotection and the risk of overprotection of sureties. At least, under the current conditions of the German law of enforcement and bankruptcy the risk of underprotection seems to be preferable. Negative consequences of underprotective rules are better avoidable then negative consequences of overprotective rules because such a rule generally limits the capacity to enter into valid suretyships and there is unlikely a compensation for the lost security. Furthermore, courts can overrule underprotective precedents better than overprotective precedents and thus better adapt their rules to new empirical evidence. Creditors have an incentive to apply more protective rules than the existing law demands. Thus underprotective rules are, at least partly, compensated by the precautions of creditors. Therefore, it seems that in borderline cases in which the validity of a suretyship is dubious the enforcement of the suretyship is preferable.

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