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Under German Law, the defendant typically is under a duty to perform the contract and courts can and do order specific performance. On the other hand, the creditor may ask for damages in place of specific performance, provided that the prerequisites of the (‘transformation’) rules in the general part allowing such change are satisfied. The core (‘transformation’) rule under the old BGB was not very transparent and was too complicated; moreover, it did not meet the needs of practice. With the Schuldrechtsmodernisierung, it therefore has been replaced by a new one. This new rule allows the creditor to opt for ‘damages instead of performance’ if he has, to no avail, granted an additional period of time for performance. This claim for damages constitutes the second remedy besides a claim for specific performance. The debtor typically has the right to a ‘second chance’ to perform. The reform did away with the problems caused by the old version. The fact that now two claims are available does, however, also raise new problems which are still awaiting clarification in doctrine and in the courts.

european review of contract law

Die Transformation des Erfüllungsanspruchs in einen Schadensersatzanspruch nach deutschem Recht: Eine Skizze der Neuregelung des Schuldrechtsmodernisierungsgesetzes