Damages and Compensation for Breach of Contract in German Civil Law

Based on an analysis of German civil law, the author concludes that the concept of damages in Germany generally aligns with the domestic framework established by the Civil Code of the Russian Federation. A distinctive feature of the German model for remedying the adverse consequences of civil wrongdoing is its universal mechanism for compensation, which applies both to breaches of obligations and to tortious harm. German jurisprudence attaches particular importance to compensation for losses, but not as a mere procedural matter, but as a means of satisfying the interests of the affected counterparty. In German law, the basis for compensation is a violation of an obligation rather than a subjective civil right, as stipulated in Article 15 of the Russian Civil Code. In cases of contractual breach, German civil law focuses not so much on the violation of a party’s subjective right as on the legal interests arising from their entry into the contractual relationship. The study finds that in Germany, the nature of the protected interest determines the type of compensable damages, their extent, and the method of calculation. As established by the author, German civil law adheres to the principle of priority of specific performance, meaning that compensation for damages does not eliminate the obligation to fulfill the breached contract. This is explained by the fact that the creditor, when receiving compensation for losses, does not receive the positive economic effect that led to the conclusion of the contract.

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