The author addresses the legal consequences that are triggered when a business representative does not disclose the legal form of the business in a business-related transaction.
Starting point is the existence and the legal framework of such a disclosure obligation. In this respect, the duty to indicate the legal form on all business letters is of significant importance. Moreover, the author shows that a loophole in protection does exist when the duty is breached because the business organisation remains primarily liable according to the law of agency, although the other contractual party may argue that if it had known the actual legal form it would not have concluded a contract. Against this background, the author develops an approach providing a solution by advocating a reliance-based liability of the business representatives for breaching the duty to disclose the legal form according to sections 311 III S. 1, 241 II, 280 I German Civil Code.