Late Delivery: Buyer's Rights under German Law

When does late delivery arise under Section 286 BGB?

Late delivery is more than a delivery that runs late. Under Section 286 BGB it takes three things. First, the claim to delivery must be due and enforceable: the delivery date has been reached and the supplier has no right of retention. Second, the creditor must, as a rule, send the supplier a reminder (Mahnung), an unambiguous demand for performance made after the claim has fallen due. Third, the supplier must be responsible for the delay. Under Section 286(4) BGB, the supplier does not fall into default as long as performance is held up by a circumstance for which it is not responsible.

The reminder is a unilateral declaration that takes effect only on receipt. It must identify the performance owed clearly enough, but need carry neither a deadline nor a threat. For proof, it should go out in text form. Default begins only when it is received, and with it the consequences of default start to run. As long as no binding delivery date has been agreed, performance falls due at once under Section 271 BGB, so the buyer can trigger default at any time simply by sending a reminder. A reminder should therefore be dated, identify the performance precisely and document its receipt, because every further claim hangs on it.

When is a reminder dispensable in late delivery?

In many supply relationships no reminder is needed, because Section 286(2) BGB makes it dispensable in four case groups. The leading one is a date set by the calendar (no. 1): where a time for performance is fixed by the calendar, say delivery on 15 October, default arises automatically at the end of that day. A period calculable from the calendar (no. 2) does just as well, running from a preceding event, for example delivery within three weeks of a call-off. A reminder is dispensable, too, if the supplier seriously and definitively refuses performance (no. 3), or if special reasons, weighing both sides' interests, justify default setting in at once (no. 4).

A non-binding delivery date, or a mere calendar week as a rough marker, is not enough for this. With a non-binding date, the rule stands: the buyer must send a reminder to trigger default. For monetary claims, Section 286(3) BGB adds the well-known 30-day rule, but that concerns the debtor's payment obligation, not the supplier's delivery obligation. In procurement, a fixed calendar date in the contract is worth the effort, because it saves the reminder and sets the consequences of default running without any further step.

What are the buyer's rights in late delivery?

Once the supplier is in default, the buyer may continue to insist on delivery and claim the loss caused solely by the delay. These delay damages under Section 280(1) and (2) in conjunction with Section 286 BGB may include financing costs, the cost of temporary substitute procurement or contractual penalties that the buyer itself owes its customers. No grace period is required for this claim; default is the decisive condition.

If the buyer wishes to end the contract, it must generally first set the supplier a reasonable additional period for delivery. If that period also expires without performance, the buyer may withdraw under Section 323 BGB, in which case any performance already exchanged must be returned. Alternatively, the buyer may claim damages in lieu of performance under Section 281 BGB. This includes, in particular, the additional cost of a cover purchase. Once such damages are claimed, however, the right to the original delivery is excluded under Section 281(4) BGB.

Instead of damages in lieu of performance, the buyer may claim reimbursement under Section 284 BGB for expenses incurred in reliance on the delivery that have become wasted. The commercially appropriate remedy therefore depends on the actual loss and on whether the buyer still wants the original delivery. Withdrawal and damages in lieu of performance normally require a grace period; whether it can be dispensed with depends on the statutory exceptions.

What are the buyer's rights in late delivery without a grace period?

As a rule the buyer must set the supplier a reasonable grace period before withdrawing or claiming damages in lieu of performance. The law, though, allows several exceptions in which the buyer may act at once, without a grace period. For withdrawal they come from Section 323(2) BGB, for damages in lieu of performance from Section 281(2) BGB.

The first exception is a serious and definitive refusal to perform. If the supplier says plainly that it will not deliver, a grace period would be an empty formality; the buyer can withdraw at once or claim damages in lieu of performance.

The second is the relative fixed-date transaction (relatives Fixgeschäft) under Section 323(2) no. 2 BGB. Where performance depends for the buyer, recognisably, on the punctual date, because the buyer said so before the contract was concluded or it follows from the circumstances, the grace period falls away. A typical case is a material delivery timed to a fixed production start or trade-fair date. The third exception applies where special circumstances, weighing both sides' interests, justify immediate withdrawal.

For merchants, Section 376 HGB goes further still. In a bilateral commercial sale with a firmly fixed time for performance or a fixed period (the commercial fixed-date transaction, Fixhandelskauf), the buyer may, if delivery is not made in time, withdraw or claim damages for non-performance without a grace period. If it exceptionally still wants to insist on performance, it must tell the supplier so immediately after the period expires, under Section 376(1) HGB; otherwise it loses the claim to performance and is left with withdrawal or damages.

Section 376 HGB also allows an abstract calculation of damages against the market price where the goods have an exchange or market price. With tight delivery dates, then, check whether a fixed-date transaction exists, because it shortens the path to withdrawal and damages considerably.

How long must the grace period be in late delivery?

The law names no fixed length. What it requires is a reasonable period, and a period is reasonable if it lets the supplier finish a performance already prepared without granting extra preparation time. What decides it is the nature of the goods, the procurement channels and what is customary in the sector. For stock goods a few days may do; for special manufacture or long supply chains, longer periods are reasonable. There is no flat figure, such as always 14 days.

Two points matter in practice. First, a period set too short does the buyer no lasting harm: if the buyer inadvertently sets too tight a period, the case law runs a reasonable period in its place, so the buyer can withdraw or claim damages once that has passed. Second, the period must state a specific, dated demand; a mere request for prompt delivery is not enough. A threat of refusal has not been required since the reform of the law of obligations. To be safe, name a specific end date in the period you set and expressly reserve your further rights.

How much are the damages for late delivery? A cover purchase example

The damage covers, in principle, the extra costs the buyer runs up through the delayed or missing delivery. The core case is the cover purchase: once the period has passed without result, the buyer sources the goods elsewhere and claims the price difference. On the case law of the Federal Court of Justice (Bundesgerichtshof, judgment of 3 July 2013, VIII ZR 169/12), the additional cost of a cover purchase is damages in lieu of performance under Sections 280(1) and (3), 281 BGB, not merely delay damages. So the buyer can claim these extra costs only if it has first let the grace period pass, or if the grace period was dispensable, and it can no longer insist on performance alongside.

The example below serves only to illustrate the method of calculation.

Under the original contract, 100 special pumps at €2,000 each cost a total of €200,000. After the grace period expires, the buyer purchases the same quantity elsewhere at €2,300 per unit, resulting in a total price of €230,000. The direct additional cost of the cover purchase is therefore €30,000. If a further €4,000 is incurred for express freight and necessary retooling, the simplified example produces damages in lieu of performance of €34,000.

Alongside this, the buyer can assert the pure delay damages, so far as they are not already absorbed in the cover purchase, for example financing costs for the bridging period or the interest loss on advance payments already made.

On statutory default interest, a distinction has to be drawn. The higher rate of nine percentage points above the base rate (Basiszinssatz, Section 247 BGB) under Section 288(2) BGB applies only to monetary claims between businesses, that is, to a company's own payment claim, and in the supply relationship it mainly hits the supplier against a defaulting buyer. At a base rate of 1.52 percent (since 1 July 2026), that works out at a default interest of 10.52 percent per year.

For the buyer's own monetary claims against the supplier, such as reclaiming an advance payment after withdrawal or a quantified sum of damages, the general rate of five percentage points above the base rate under Section 288(1) BGB applies instead, because these lack the character of a payment claim.

For monetary claims, Section 288(5) BGB adds a flat sum of 40 euros, which, however, is to be set off against any further reimbursement of the costs of pursuing the claim. The buyer must set out and prove the damage specifically; the cover purchase quotes, the invoices and the time of setting the period should therefore all be carefully documented.

What applies to contractual penalties and liquidated damages in supply contracts?

Many framework and supply contracts carry clauses meant to spare proof of the individual loss. Two must be kept apart: the contractual penalty (Vertragsstrafe), which holds the supplier to the contract and is incurred subject to fault, and liquidated damages (pauschalierter Schadensersatz), which fix in advance the amount of a loss that typically arises. Both are permissible, but both face standard-terms review (AGB-Kontrolle) where the user imposes them.

Even between businesses, the value judgements of Section 309 no. 5 and no. 6 BGB carry through the general clause of Section 307 BGB. A lump sum of damages is unenforceable if it exceeds the loss to be expected in the ordinary course, or if it bars the contractual partner from the outset from proving a lower loss.

A contractual penalty must not set a flat amount without differentiating by the gravity of the breach, and it must be reasonable in size. On the case law, a clause is unenforceable, too, if it lets a contractual penalty and liquidated damages run cumulatively side by side, because that breaches the set-off requirement.

For the buyer, the upshot is twofold: a well-drafted contractual-penalty clause is an effective lever against late delivery, while an excessive one is worthless in a dispute, because it may fall as a whole.

How do the supplier's standard terms take effect?

Suppliers frequently cap their liability through their own purchasing or sales terms. Typical clauses limit the amount of liability for delay damages, confine liability to intent and gross negligence, or cap flat delay compensation in the supplier's favour. Such clauses are not per se unenforceable in commercial dealings, but they are measured against Section 307 BGB. A complete exclusion of liability for the breach of essential contractual duties (the so-called cardinal duties) as a rule does not survive the content review, nor does an exclusion of liability for intent and gross negligence.

A second practical question is whose standard terms apply at all. If buyer and supplier each point to their own conflicting terms, the case law on the defensive clause takes over: the conflicting clauses do not become part of the contract, and the non-mandatory statutory law fills the gap. Anyone who wants to plan reliably in procurement should read the supplier's default and liability clauses before the contract is concluded and put its own position into the contract actively, a grace-period mechanism, a contractual penalty and a lump sum of damages, rather than leave it to the chance of a battle of standard terms.

Late delivery or force majeure?

Not every missed delivery establishes default. Under Section 286(4) BGB the supplier does not fall into default so long as performance is held up by a circumstance for which it is not responsible. Where a supplier invokes force majeure, an external, unavoidable event such as a natural disaster, a strike in the upstream supply chain or an official import ban, the question is whether it is at fault.

If the delay really is not the supplier's responsibility, default interest and delay damages fall away for that period. The claim to performance survives as long as performance has not become permanently impossible within the meaning of Section 275 BGB; on permanent impossibility, the unwinding follows Sections 275, 326 BGB.

Force-majeure clauses in supply contracts frequently shift this statutory allocation in the supplier's favour, by defining which events relieve it and for how long. Whether such a clause holds in the specific case is a matter of interpretation and enforceability. We go into this set of questions in more depth in a separate article; for late delivery, it is enough to note that default may fail for want of responsibility, and that where the supplier invokes force majeure, the buyer should first check whether its conditions are really met.