The decision of the German Federal Supreme Court was based on the following set of facts: the defendant sold the claimant several properties in 1993 for an overall price of 1.7 million DM. In § 12 of the notarised contract it stated:
'The vendor undertakes to repurchase the … property on the request of the purchaser up until 30.6.1996. The request must be made to the vendor in writing before 31.3.1996. The repurchase will then take place in accordance with the conditions of this contract for a sale price of 1.7 million DM.'
By an agreement of 6.2.1994 the defendant granted the claimant an interest-free loan of 300,000 DM with provision that in the case of a repurchase this sum would be set off against the purchase price to be demanded by the claimant. The remainder of the purchase price was to be settled via an extension of credit. In 1995 the claimant demanded that the property be repurchased by 31.1.1995. The defendant refused this, objecting that the condition of the object of the sale had deteriorated significantly during the time that it had been in the claimant's possession, through the fault of the latter.
The Landgericht rejected the claim, the Oberlandesgericht gave judgment for the claimant, with the proviso that the property be sold without any guarantee as to its size or condition, but that the vendor's rights arising from § 498 (2) BGB should remain unaffected.
The defendant's appeal to the Supreme Court led to this decision being quashed. In the opinion of the Supreme Court § 497(1) BGB was not applicable to the right of resale, since the parties had not included this right in their agreement as a right on the part of the purchaser to modify the terms of the contract, but rather as an obligation to repurchase on the part of the vendor. Furthermore, neither §498 (2) second sentence BGB nor § 498 (2) first sentence BGB were applicable by analogy to the resale of immovable property, because of the difference in the framework of the parties' interests. In so far as the parties had structured the right of resale as a personal obligation, the purchaser could only require the conclusion of a contract of repurchase if he at the same time made good the defects that had emerged in the interim period.
On the following pages, the authors examine the decision from the point of view of Belgian, Spanish and Greek law.European Review of Private Law