German law · English information
A counterparty’s insolvency raises questions about delivery, termination, payment and continuing rights of use. Contract type and the stage of performance are decisive.
Performance and claims
For contracts not fully performed by either party, section 103 InsO may give the administrator a choice concerning performance. Other contract types have special rules. Classification as an insolvency claim or an estate liability depends on the legal basis and timing.
Termination clauses
A clause triggered by insolvency is not automatically valid or invalid. Statutory policy and the specific wording must be assessed. Prematurely stopping deliveries or wrongfully terminating a contract can expose the acting party to claims.
Licences and intellectual property
For software, patent and trade mark licences, review title, the licence chain, scope and contractual structure. Rights must actually be available for continued operation or acquisition. An unqualified promise that a licence is insolvency-proof is not reliable without a case-specific assessment.
Related information
Procedures overview · Creditor rights · Corporate insolvency
Official German Insolvency Code · Official StaRUG
Practical implementation
Identify the contract and performance stage
Insolvency does not automatically terminate every contract. Section 103 InsO may affect contracts not fully performed by either party, while particular contract types have special rules. Contract classification, performance, procedural stage and prior declarations are therefore important. Advances, partial performance and accrued claims should be separated. A clause triggered solely by filing or opening cannot simply be assumed enforceable. Other termination rights also require their own factual and legal basis.
Examine licences and digital services separately
Trade mark, patent and software licences depend on the actual rights granted. Head licences, sublicences, maintenance, hosting and data access may have different legal treatment. A continuing right to use software does not necessarily secure updates, support or migration. A purchaser must also check transferability. Technical contingency planning should be coordinated with legal rights. Uncertain access rights cannot be resolved by unauthorised copying of protected programs or data.
Four practical examples
The following scenarios are illustrative examples, not reports of client matters. The outcome depends on the facts and applicable rules.
Example 1: A software supplier fails
A business depends on software and continuing support. Use rights, hosting, maintenance and data export need separate examination. A perpetual licence may create a different position from a cloud service, but the particular contract remains decisive.
Example 2: A customer paid in advance
Goods have not been delivered despite a deposit. The customer needs to assess performance rights, the relevant procedural decision and any repayment claim. An advance alone does not automatically create ownership rights over unspecified funds.
Example 3: A licence is included in a proposed sale
A purchaser needs a licence held by the debtor. Transfer restrictions and consents must be checked. The licence should not be valued as securely transferable while its legal availability remains unresolved.
Example 4: A contract has an insolvency clause
A supplier proposes immediate termination following a filing. The clause must be assessed against mandatory insolvency rules. Independent performance defaults may also matter, but the two possible grounds should be distinguished.
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