The plaintiff acted from the middle of April until the end of June 1926 as daily help to the widow M. On 10 and 11 August 1926 she was helping Frau M to move to a new dwelling; as from 15 August she had accepted a new post as a maidservant. Frau M had employed the defendant firm to move the gas meter in the bathroom of her new dwelling. At the end of July the firm instructed their leading fitter B to do the job. On 11 August the plaintiff noticed a smell of gas in the dwelling, as she had done the day before. To discover the place of the leak she climbed a ladder in the bathroom and lit the gas burner with a match. The leaking gas was set alight and the plaintiff suffered appreciable damage to the upper part of her body. The gas escape was due to the looseness of an overflow screw on the meter. The screw had been installed by B. The Court of Appeal found that he had been grossly negligent in the unworkmanlike execution of the job.

The plaintiff first sued the widow M for damages in preliminary proceedings. At that stage the present defendant firm appeared as ‘co-defendant’ with Frau M. The action was dismissed on the ground that in any case the plaintiff was predominantly to blame (§ 254 BGB).

The plaintiff now sued the firm B & R and also B as co-defendants for damages and an annuity, and for a declaration of liability for further damage.

The Landgericht found the claim against both defendants justified as to two-thirds. The Oberlandesgericht reduced the award to one-half.

The appeal of the firm B & R (hereinafter called the defendant) was unsuccessful, apart from a determination of the duration of the annuity.

Reasons

The essential grounds on which the Court of Appeal based its judgment were the following. The defendants were strictly liable without exoneration for damage caused by B under the contract made with Frau M. That contract bound the defendants to take the care normally required in carrying out the job; moreover, in performing that duty they made use of their employee B and must therefore take responsibility for him under § 278 BGB. Not only was Frau M entitled as a contracting party to have that care taken, and to be compensated for the damage caused by the neglect of it, but the plaintiff was also entitled in so far as the contract must be taken to have been a contract for the benefit of third parties.

Whether a contract was intended to bring § 328 I BGB into operation, so that the third party should acquire directly a right to claim the promised performance must, under § 328 II BGB and in the absence of any special provision, be decided on the facts of each case, with particular reference to what can be recognized by both parties to have been the purpose of the contract.

The contractual purpose here signifies the objective means of determining the terms of the contract so that an agreement must be taken as covered by the contractual intention which the contracting parties could have arrived at if they had faced up to the elaboration of the details according to the purpose of the contract. Whether the extent of their agreement had actually been realized was beside the point. The application of these principles led to the conclusion that there was here a contract for the benefit of third parties. When a contract is made for the execution of a job in a customer’s dwelling the danger is involved for anyone using it, the customer must be assumed to have intended—and this intention is capable of being observed by the contractor—that the interest of relatives living with him would be respected and that they should, for this purpose, have the same rights as he himself has to be compensated for damage done to them through the performance of the job. For without such an extension of the contractual duties, injured dependants would be limited to non-contractual claims. Such a different treatment of the customer and his dependants would offend against a sound instinct for justice and be out of accord with the contractual intent of the customer who, as the contractor must have been aware, would not wish to place his dependants in a worse position than himself as regards claims for compensation.

The position of the customer’s domestic servants is the same. Here, too, the intention—capable of being recognized by the contractor—must be implied that he will respect the interest of the domestic staff, who must work on the premises where the contractor does the job and would have a claim to a safe system of work against the customer (§ 618 BGB). Where the customer contracts for a performance of a dangerous character, the contractor must know that he intends the performance to be carried out so as not to cause damage either to himself or to the members of his family or domestic staff, and that he is to stand in no better position than those belonging to his immediate household.

Now the plaintiff was indeed not a domestic servant but only a daily help, and therefore, was not a member of the domestic community. But, when making the contract, the head of the household must have intended—and this intention must have been understood by the contractor—to ensure that, over and above the circle of family dependants and domestic staff, all those persons to whom a master owes a duty of protection shall enjoy the special protection of a personal claim to have care taken of them under § 618 BGB. The daily help belongs to that class. This interpretation, however, must be subject to the limitation that only such persons must be regarded as benefiting from § 618 BGB as stand towards their employer in a relationship of some duration from which arises at least a moral duty on the employer to increase his protection. For a master must not be taken to intend to contract for the benefit of persons who serve only occasionally and temporarily on his premises and with whom he does not form any close attachment, such as arises from a longer use of their services and a more frequent contact, and even the creation of personal relations. The plaintiff stood in no passing relation to Frau M for she was in regular service with her for about a quarter of a year and was also, as is stated more fully, in a long-standing relationship with her.

But even if that no longer applied to 11 August 1926—so says the appellate decision—a contract for the benefit of third parties would exist as regards the plaintiff. For during the removal and the putting in order of the new dwelling, the dangers involved in the furnishing were so much greater than in ordinary housekeeping that the occupier must be taken to have intended to provide special protection to all taking part in the removal. The contract for the benefit of third parties must be taken to have imposed a duty of care upon all taking part in it.

Against this the appeal contends that a contract for a job of work cannot be taken to include the protection of all those permanently or temporarily in a dwelling; for principles worked out for leases cannot be applied to contracts for a job of work.

This attack cannot succeed, in particular because the appellate judge’s interpretation of the contract of work between the defendant and the widow M, to the effect that it was a contract of work for the benefit of the plaintiff is free from legal error, above all in his application of §§ 133, 157, 328 BGB. Whether his definition of the circle of those benefited was entirely correct need not be discussed. In any case it includes persons who are entitled to damages from the customer under § 618 BGB.

The fundamental considerations on which the Court of Appeal proceeded are to the point, and are established by case-law of the Reichsgericht. It is in particular correct that the contract for the benefit of a third party can be an implied one and that the decision whether a contract is to be regarded as having been made for the benefit of a third party also and whether the third party shall acquire rights immediately against the promisor depends essentially, in the absence of a special term, on a finding of the facts in each case. For that purpose, regard must be had to the intention of the parties, the purpose of the transaction, and business usages; especial attention must be paid to the supplementary interpretation of contracts. The business intention of the parties provides an objective indication; whether the parties were aware when contracting of the scope of their declarations is irrelevant. Finally, there is no requirement that the identity of the third party should be ascertained when the contract is made; it is enough for it to be ascertainable.

On this basis, more recent judgments of the Reichsgericht have followed its earlier case-law in recognizing more and more contracts for the benefit of third parties in cases where a third party has suffered damage [there follows an exposition of the slowly developing practice of the Court].

If, now, one comes to decide the present case, one arrives at the following conclusions. The plaintiff was a daily help in a long-term relationship with the widow M. Accordingly she was entitled and obliged, in the interest of her own health but also in the furtherance of her employer’s business, to enter the bathroom from which the smell of gas seemed to come. The gas escape rendered the premises in which she was bound to serve unfit to afford her protection against danger to life and limb. The unfitness was due to the grossly negligent way B, the defendant’s ‘employee’, performed the job of fixing the gas meter (§ 278 BGB). Under § 618 BGB Frau M was subjected to obligations which the legislator considered so essential that their exclusion or limitation by contract was made illegal (§ 619 BGB). Under them Frau M was liable to compensate the plaintiff, although she was not herself to blame. For liability under § 618 BGB is contractual and hence § 278 is applicable, so that Frau M had to answer the plaintiff for the defendant’s fault.

Now, Frau M’s purpose, as the defendant could well realize, in making the contract was to have the gas meter properly fixed, and in particular that the execution of the job should produce no danger to life and limb either to herself or to any persons to whom she might become liable under § 618 BGB. No obligation to point of law can be taken to the further finding that the appellate made in interpreting the contract by way of supplementation, according to § 157 BGB, that Frau M and the defendant would have agreed to the direct liability of the latter for all damage for which Frau M might become liable to compensate persons through an improper fitting of the gas meter, if the parties, when making the contract, had contemplated such a possibility. For Frau M would have made the assumption of such direct liability a term of the contract and the defendant would, in order to get the order, have accepted such a term, all the more so because he had in any case to do a perfect job and it made no essential differences to him whether he exposed himself to a direct claim for damages by the employee of Frau M or for an indemnity by the latter.

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