BGH, Decision of January 11, 2012 – XII ZR 40/10

Due to their economic importance, competition protection clauses repeatedly become the subject matter of disputes between tenants and landlords of commercial premises. At issue is regularly the scope of the agreed competition protection, which has to be determined based on the relevant competition protection clause.

In its Decision of January 11, 2012, the German Federal Court of Justice (BGH) commented on the interpretation of competition protection clauses. In this context, the BGH particularly addressed to what extent the principles of supplementary contract interpretation may be applied in the absence of unambiguous contractual rules.


On the preconditions of supplementary contract interpretation in connection with a competition protection clause agreed in a lease agreement.


In 1986, the plaintiff entered into a lease agreement for commercial properties in a medical center with the legal predecessor of the defendant, in order to operate an optician and hearing aid store. The lease agreement contained a competition protection clause, according to which it was not permitted to operate another optician and hearing aid store in the landlord’s object. At the time when the lease agreement was concluded, a practice for otolaryngology was already located in the building, which was taken over in 2005 by its current proprietor. Subsequently, the plaintiff expanded its pure optician business by adding a hearing aid acoustics department. The proprietor of the medical practice began to sell hearing aids in the so-called “shortened supply channel” directly to patients. The plaintiff considered this a violation of the contractually agreed competition protection clause and demanded from the defendant to ensure that the competition protection is observed. In addition, it asserted a rent reduction as well as damages because of lost profits.


The BGH rejected a violation of the contractually agreed competition protection clause. In particular, such a violation could not be assumed based on supplementary contract interpretation. Such a supplementary contract interpretation required the existence of an unplanned gap in the agreement. Such a gap could be assumed only, if the agreement was missing a provision, which was necessary, in order to complete the underlying regulatory plan of the parties.

In order to examine, whether a gap existed that needs to be filled, it was primarily relevant, which extent of competition protection the plaintiff was able to expect at the time the lease agreement was concluded. Taking this fact into account, the wording of the competition protection clause was already speaking against the assumption of a gap. The prohibition there had been limited explicitly only to leasing to third parties for the operation of an optician and hearing aid store. The aim had therefore been to protect the plaintiff primarily against direct competition from operation of a similar business. At the time of the conclusion of the lease agreement, it had also been known already that a practice for otolaryngology was operated in the leased object. Therefore, the plaintiff had had to expect at that time that the proprietor of the medical practice will provide all services, which are permitted by law and that overlapping may occur. If the parties had intended to also cover medical services, it would have been obvious, not to base the competition protection clause on the operation of a business, but on the services for which competition protection is to be provided. Finally, when interpreting contractually agreed competition protection clauses it also had to be taken into account that the landlord was generally not required to keep any noticeable or unwanted competition away from the tenant.


The presented decision of the BGH shows that supplementary contract interpretation will play a rather subordinated role when interpreting competition protection clauses. In this context rather the specific wording of the agreed clause as well as the relevant circumstances at the time of the conclusion of the contract are of decisive importance.

In order to ensure comprehensive competition protection, tenant should therefore pursue the most detailed description of the protected activity that is possible. For this purpose, any future changes as well as overlapping assortments should also be taken into account. For the landlord, however, this means that the risk of a violation of the competition protection clause is increased. Generally, the more detailed the competition protection clause, the more difficult it is to coordinate it with other lease agreements. From the landlord’s perspective, restraint is therefore necessary when agreeing on comprehensive competition protection clauses.