Consultant’s Liability for Damages
If the agent breaches his/her contractual duties, he/she is liable for the damage. Thus, the liability for damages is based on contract. The most important criterion for establishing liability is to evaluate, whether or not the agent has acted with care. In order for the liability for damages to arise, however, the damage must have been foreseeable. The principal’s contribution will be taken into account when evaluating amount of the damages, even if the agent was an expert.
The right to claim damages caused by an agent is subject to a statute of limitations of three years. The period of limitation commences when the agent has prepared the accounts, from which the grounds for liability have become evident, or when the principal has or should have become aware of the agent’s error or omission.
The agent is not responsible for the solvency of the principal’s contracting parties. Thus, the principal must assume liability f0r losses if such counterparties fail to fulfill their obligations. It is, however, possible to agree in the commission agreement that the agent assumes liability for the solvency of a contracting party. Such liability is referred to as “del credere”-liability. The agent shall, however, always choose the principal’s contracting party with care and, if required, verify such contracting party’s solvency.