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English is not an official language of the Swiss Confederation. This translation is provided for information purposes only and has no legal force.

Title Six: Sale and Exchange

Section One: General Provisions

A. Rights and obligations of the parties in genera

Art. 184

1 A contract of sale is a contract whereby the seller undertakes to deliver the item sold and transfer ownership of it to the buyer in return for the sale price, which the buyer undertakes to pay to the seller. 2 Unless otherwise provided by agreement or custom, the seller and the buyer are obliged to discharge their obligations simultaneously quid pro quo. 3 The price is deemed sufficiently determined where it can be determined from the circumstances.

B. Benefits and risks

Art. 185

1 The benefit and risk of the object pass to the buyer on conclusion of the contract, except where otherwise agreed or dictated by special circumstance. 2 Where the object sold is defined only in generic terms, the seller must select the particular item to be delivered and, if it is to be shipped, must hand it over for dispatch. 3 In a contract subject to a condition precedent, benefit and risk of the object do not pass to the buyer until the condition has been fulfilled.

C. Reservation of cantonal law

Art. 186

Cantonal law may limit or exclude the right to bring claims in connection with retail sales of alcoholic beverages, including hotel bills.

Section Two: The Chattel Sale

A. Object

Art. 187

1 Any sale in which the object is not land, property or a right in rem entered in the land register is a chattel sale. 2 Where constituent parts of land, such as crops, architectural salvage materials or quarry products, are separated therefrom for transfer to the acquirer, their sale constitutes a chattel sale.

B. Seller’s obligations

I. Transfer

1. Transfer costs

Art. 188

Unless otherwise provided by agreement or custom, the seller bears the costs of transfer and in particular those of measuring and weighing, while the buyer bears those of documentation and receipt.

2. Transport costs

Art. 189

1 Unless otherwise provided by agreement or custom, if the object sold must be transported to a place other than the place of performance, the buyer bears the costs of such transport. 2 The seller is presumed to have borne the transport costs where free delivery has been agreed. 3 Where delivery free of shipping costs and duties has been agreed, the seller is deemed to have assumed the export, transit and import duties payable during transport but not the consumer tax levied on receipt of the object.

3. Delivery default

a. Withdrawal from commercial transactions

Art. 190

1 Where in commercial transactions the contract specifies a time limit for delivery and the seller is in default, the presumption is that the buyer will forego delivery and claim damages for non-performance. 2 However, if the buyer prefers to demand delivery, he must inform the seller without delay on expiry of the time limit.

b. Liability for and computation of damages

Art. 191

1 A seller who fails to discharge his contractual obligation is liable for the resultant damage to the buyer. 2 The buyer in a commercial transaction is entitled to compensation of the difference between the sale price and the price he has paid in good faith to replace the object that was not delivered to him. 3 In the case of goods with a market or stock exchange price, the buyer need not buy the replacement object but is entitled to claim as damages the difference between the contractual sale price and the market price at the time of performance.

II. Warranty of title

1. Warranty obligation

Art. 192

1 The seller is obliged to transfer the purchased goods to the buyer free from any rights enforceable by third parties against the buyer that already exist at the time the contract is concluded. 2 Where on conclusion of the contract the buyer was aware of the existence of such rights, the seller is not bound unless by any express warranty given. 3 Any agreement to exclude or limit the warranty obligation is void if the seller has intentionally omitted to mention the right of a third party.

2. Procedure

a. Third-party notice

Art. 193

1 The requirements for and effects of the third-party notice are governed by the CPC. 2 In the event of failure to serve the third-party notice for reasons not attributable to the seller, he is released from his warranty obligation to the extent that he can prove that the outcome would have been more favourable had the third-party notice been served promptly.

Art. 193 — Amended by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, in force since 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221). Para. 1 — SR 272

b. Surrender of object without court decision

Art. 194

1 The seller remains subject to the warranty obligation even if the buyer has in good faith acknowledged the right of a third party without waiting for a court decision or if he has agreed to submit to arbitration, provided that the seller was warned of the arbitration proceedings in good time but declined an invitation to engage therein. 2 The same applies if the buyer proves that he was compelled to surrender the object.

3. Rights of the buyer

a. Full dispossession

Art. 195

1 In the case of full dispossession, the contract of sale is deemed terminated and the buyer has the right to claim: 1. restitution of the price paid, with interest, less the value of any fruits the buyer has obtained or neglected to obtain from the object and other benefits derived therefrom; 2. reimbursement of his expenditures on the object, to the extent this cannot be obtained from the third party with the superior right; 3. reimbursement of all judicial and extra-judicial costs arising from the proceedings, apart from those he would have avoided by serving third-party notice on the seller; 4. compensation for all other damage directly caused by the dispossession. 2 The seller is also obliged to make good any further loss suffered by the buyer unless the seller can prove that he is not at fault.

b. Partial dispossession

Art. 196

1 Where the buyer is dispossessed of only part of the purchased object or it is encumbered with a charge in rem for which the seller is guarantor, the buyer may not seek termination of the contract of sale but may only claim damages for being thus dispossessed. 2 However, where in the circumstances there is cause to presume that he would not have entered into the contract if he had foreseen such a partial dispossession, he has the right to request its termination. 3 In this case, he must return to the seller that part of the item of which he has not been dispossessed together with the benefits he obtained from it in the interim.

c. Objects of cultural heritage

Art. 196a

In the case of objects of cultural heritage within the meaning of Article 2 paragraph 1 of the Cultural Property Transfer Act of 20 June 2003, actions for breach of warranty of title prescribe one year after the buyer discovered the defect of title but in any event 30 years after the contract was concluded.

Art. 196a — Inserted by Art. 32 No 2 of the Cultural Property Transfer Act of 20 June 2003, in force since 1 June 2005 (AS 2005 1869; BBl 2002 535). SR 444.1

III. Warranty of quality and fitness

1. Object of the warranty

a. In general

Art. 197

1 The seller is liable to the buyer for any breach of warranty of quality and for any defects that would materially or legally negate or substantially reduce the value of the object or its fitness for the designated purpose. 2 He is liable even if he was not aware of the defects.

b. In livestock trading

Art. 198

There is no warranty obligation in sales of livestock (horses, donkeys, mules, cattle, sheep, goats or pigs) unless the seller has given express warranty in writing to the buyer or has intentionally misled the buyer.

2. Exclusion of warranty

Art. 199

Any agreement to exclude or limit the warranty obligation is void if the seller has fraudulently concealed the failure to comply with warranty from the buyer.

3. Defects known to the buyer

Art. 200

1 The seller is not liable for defects known to the buyer at the time of purchase. 2 He is not liable for defects that any normally attentive buyer should have discovered unless he assured the buyer that they do not exist.

4. Notice of defects

a. In general

Art. 201

1 The buyer must inspect the condition of the purchased object as soon as feasible in the normal course of business and, if he discovers defects for which the seller is liable under warranty, must notify him without delay. 2 Should he fail to do so, the purchased object is deemed accepted except in the case of defects that would not be revealed by the customary inspection. 3 Where such defects come to light subsequently, the seller must be notified immediately, failing which the object will be deemed accepted even in respect of such defects. 4 If defects in an object that has been integrated into an immovable work in accordance with its intended use have caused the work to be defective, these defects must be reported within 60 days. Defects that were not apparent on customary inspection must be reported within 60 days of their discovery. An agreement on shorter periods is invalid.

Para. 4 — Inserted by No I of the FA of 20 Dec. 2024 (Construction Defects), in force since 1 Jan. 2026 (AS 2025 270; BBl 2022 2743).

b. In livestock trading

Art. 202

1 Where in a sale of livestock a written assurance includes no time limit and does not warrant that an animal is pregnant, the seller is not liable to the buyer unless a defect is discovered and notified within nine days of delivery or of the notice of default in taking delivery and an application is made to the competent authority within the same time limit to have the animal examined by experts. 2 The court evaluates the experts’ report at its discretion. 3 In other respects the procedure is governed by regulations enacted by the Federal Council.

5. Intentional deceit

Art. 203

Where the seller has wilfully misled the buyer, liability for breach of warranty is not limited by any failure on the buyer’s part to give prompt notice of defects.

6. Remote sale and purchase

Art. 204

1 A buyer who complains that an object sent from another place is defective is obliged to place it in temporary storage, provided the seller has no representative in the place in which it was received, and cannot simply return it to the seller. 2 The buyer is obliged to have the condition of the object duly and promptly witnessed, failing which he will bear the burden of proving that the alleged defects already existed when he took receipt of the object. 3 Where there is a risk that the object will rapidly deteriorate, the buyer has the right and, should the interests of the seller so require, the obligation to arrange its sale with the assistance of the competent authority of the place where the object is located, but must notify the seller of such sale as soon as possible to avoid rendering himself liable in damages.

7. Types of action

a. Rescission or reduction

Art. 205

1 In claims for breach of warranty of quality and fitness, the buyer may sue either to rescind the contract of sale for breach of warranty or to have the sale price reduced by way of compensation for the decrease in the object’s value. 2 Even where the buyer has brought action for rescission the court is free to order a reduction in the price of the object if it does not consider rescission justified by the circumstances. 3 If the decrease in the object’s value is equal to the sale price, the buyer may only sue for rescission.

b. Substitute performance

Art. 206

1 Where the contract of sale is for delivery of a specified quantity of fungibles, the buyer may choose to bring action either for rescission or for a reduction in the sale price or to request other acceptable goods of the same kind. 2 Where the purchased objects have not been sent from another place, the seller may discharge his obligation to the buyer by immediately delivering acceptable items of the same kind and making good any damage the buyer has suffered.

c. Rescission when the object is destroyed

Art. 207

1 Action for rescission of the contract of sale may be brought if the object has been destroyed as a result of its defects or by accident. 2 In such cases the buyer must return only that which remains of the object. 3 If the object is destroyed through the fault of the buyer or has been sold on or transformed by him, his only claim is for compensation for the decrease in value.

8. Rescission of the contract of sale

a. In general

Art. 208

1 In the event of rescission of the contract of sale the buyer must return the object to the seller together with any benefits derived from it in the interim. 2 The seller must reimburse to the buyer the sale price paid together with interest and, in accordance with the provisions governing full dispossession, compensation for litigation costs, expenses and the damage incurred by the buyer as a result of the delivery of defective goods. 3 The seller is obliged to compensate the buyer for any further damage unless he can prove that no fault is attributable to him.

b. For sales of batches or sets of objects

Art. 209

1 Where the sale involves a batch or set of objects of which only some are defective, action for rescission may be brought only in respect of the defective items. 2 However, where the defective items cannot be separated from the unflawed items without substantial prejudice to the buyer or the seller, rescission of the contract of sale must extend to the entire batch or set. 3 Rescission in respect of the main sale object necessarily involves rescission in respect of all accessory objects even if they are priced separately, whereas rescission in respect of accessory objects does not extend to the main object.

9. Prescription

Art. 210

1 An action for breach of warranty of quality and fitness prescribes two years after delivery of the object to the buyer, even if he does not discover the defects until later, unless the seller has assumed liability under warranty for a longer period. 2 The period amounts to five years where defects in an object that has been incorporated in an immovable work in a manner consistent with its nature and purpose have caused the work to be defective. 3 In the case of cultural property within the meaning of Article 2 paragraph 1 of the Cultural Property Transfer Act of 20 June 2003, actions for breach of warranty of quality and fitness prescribe one year after the buyer discovered the defect but in any event 30 years after the contract was concluded. 4 An agreement to reduce the prescriptive period is null and void if: a. the prescriptive period is reduced to less than two years, or less than one year in the case of second-hand goods; b. the object is intended to be used by the buyer or his

Art. 210 — Amended by No I of the FA of 16 March 2012 (Prescription of Guarantee Claims. Extension and Coordination), in force since 1 Jan. 2013 (AS 2012 5415; BBl 2011 2889 3903). Para. 3 — SR 444.1

C. Obligations of the buyer

I. Payment of the sale price and acceptance of the

Art. 211

1 The buyer has an obligation to pay the price in accordance with the terms of the contract and to accept the sale object provided it is offered to him by the seller as contractually agreed. 2 Unless otherwise provided by agreement or custom, such acceptance must take place immediately.

II. Fixing the price

Art. 212

1 Where the buyer places a firm order without indicating the sale price, the price is presumed to be the average current market price at the place of performance. 2 Where the price is based on the weight of the goods, the weight of the packaging (tare) is deducted. 3 The foregoing does not apply to special commercial customs whereby the gross weight of certain resale merchandise is reduced by a set amount or percentage or the price is based on the gross weight including packaging.

III. Time when price falls due, interest

Art. 213

1 The price falls due as soon as the property passes into the buyer’s possession, unless some other juncture is agreed. 2 Regardless of the provision governing default on expiry of a specified time limit, interest accrues on the sale price even if no reminder is issued where such practice is customary or the buyer may derive fruits or other benefits from the purchased object.

IV. Buyer in default

1. Seller’s right of withdrawal

Art. 214

1 Where the property is to be delivered against advance payment of the price in full or in instalments and the buyer is in default on such payment, the seller is entitled to withdraw from the contract without further formality. 2 However, if he intends to exercise this right he must notify the buyer immediately. 3 Where the purchased object has passed into the buyer’s possession prior to payment, the seller may withdraw from the contract on the grounds that the buyer is in default and demand the return of the object only if he has expressly reserved the right to do so.

2. Liability for and computation of damages

Art. 215

1 Where the buyer in a commercial transaction fails to discharge his payment obligation, the seller is entitled to compensation for the difference between the sale price and the price at which he has subsequently sold the object in good faith. 2 In the case of goods with a market or stock exchange price, the seller is entitled to claim as damages the difference between the contractual sale price and the market price at the time of performance without needing to sell the object on.

Section Three: The Sale of Immovable Property

A. Formal requirements

Art. 216

1 A contract for the sale of immovable property is valid only if done as a public deed. 2 A preliminary contract and an agreement conferring a right of pre-emption, purchase or repurchase in relation to immovable property is valid only if done as a public deed. 3 An agreement conferring a right of pre-emption without fixing a price is valid if done in writing.

Para. 2 — Amended by No II of the FA of 4 Oct. 1991, in force since 1 Jan. 1994 (AS 1993 1404; BBl 1988 III 889). Para. 3 — Amended by No II of the FA of 4 Oct. 1991, in force since 1 Jan. 1994 (AS 1993 1404; BBl 1988 III 889).

Abis. Duration and priority notice

Art. 216a

Rights of pre-emption or repurchase may be agreed for a maximum duration of 25 years and rights of purchase for a maximum of 10 years, and they may be entered under priority notice in the land register.

Art. 216a — Inserted by No II of the FA of 4 Oct. 1991, in force since 1 Jan. 1994 (AS 1993 1404; BBl 1988 III 889).

Ater. Inheritance and assignment

Art. 216b

1 Unless otherwise agreed, contractual rights of pre-emption, purchase and repurchase may be inherited but not assigned. 2 Where assignment is permitted by contractual agreement, it is subject to the same formal requirements as apply to the establishment of the right.

Art. 216b — Inserted by No II of the FA of 4 Oct. 1991, in force since 1 Jan. 1994 (AS 1993 1404; BBl 1988 III 889).

Aquater. Rights of pre-emption

I. Pre-emption events

Art. 216c

1 A right of pre-emption may be exercised on the sale of the immovable property or any other legal transaction economically equivalent to a sale (pre-emption event). 2 In particular, the following are not pre-emption events: allocation to an heir in the division of an estate, forced sale, or acquisition in performance of public duties.

Art. 216c — Inserted by No II of the FA of 4 Oct. 1991, in force since 1 Jan. 1994 (AS 1993 1404; BBl 1988 III 889).

II. Effect of pre-emption, conditions

Art. 216d

1 The seller must inform persons with a right of pre-emption of the conclusion and content of any contract of sale entered into. 2 Where the contract of sale is terminated after the right of pre-emption has been exercised or if necessary permission is refused for reasons pertaining to the person of the buyer, such termination or refusal has no effect on the person to whom the right of pre-emption accrues. 3 Unless the pre-emption agreement provides otherwise, the person with the right of pre-emption may purchase the property on the conditions agreed by the seller with the third party.

Art. 216d — Inserted by No II of the FA of 4 Oct. 1991, in force since 1 Jan. 1994 (AS 1993 1404; BBl 1988 III 889).

III. Exercise, forfeiture

Art. 216e

A person wishing to exercise his right of pre-emption must give notice of his intention within three months to the seller or, if it is entered in the land register, to the owner. This time limit commences on the day on which the person with the right of pre-emption became aware of the conclusion and content of the contract of sale.

Art. 216e — Inserted by No II of the FA of 4 Oct. 1991, in force since 1 Jan. 1994 (AS 1993 1404; BBl 1988 III 889).

B. Conditional purchase and reservation of ownersh

Art. 217

1 Conditional purchases of immovable property are not entered in the land register until the condition has been fulfilled. 2 A reservation of ownership may not be entered in the land register.

C. Agricultural properties

Art. 218

The Federal Act of 4 October 1991 on Rural Land Rights applies to the sale of agricultural properties.

Art. 218 — Amended by Art. 92 No 2 of the FA of 4 Oct. 1991 on Rural Land Rights, in force since 1 Jan. 1994 (AS 1993 1410; BBl 1988 III 953). SR 211.412.11

D. Warranty

I. For size

Amended by No I of the FA of 20 Dec. 2024 (Construction Defects), in force since 1 Jan. 2026 (AS 2025 270; BBl 2022 2743).

Art. 219

1 Unless otherwise agreed, the seller of a property must compensate the buyer if it is not of the size indicated in the contract of sale. 2 Where the property is not of the size entered in the land register based on an official survey, the seller must compensate the buyer only where he gave express warranty to that effect. 3 …

Para. 3 — Repealed by No I of the FA of 20 Dec. 2024 (Construction Defects), with effect from 1 Jan. 2026 (AS 2025 270; BBl 2022 2743).

II. Reporting defects, rectification free of charg

Art. 219a

1 The period for reporting defects when purchasing immovable property is 60 days. Defects that were not apparent on customary inspection must be reported within 60 days of their discovery. An agreement on shorter periods is invalid. 2 The purchaser of immovable property with a structure that has yet to be built or was newly built less than two years prior to the sale may also demand rectification free of charge. This right is subject to the provisions governing work contracts. 3 The purchaser's rights in relation to defects in the property shall prescribe five years after acquisition of ownership. The prescriptive period may not be changed to the detriment of the purchaser.

Art. 221 — Inserted by No I of the FA of 20 Dec. 2024 (Construction Defects), in force since 1 Jan. 2026 (AS 2025 270; BBl 2022 2743).

E. Benefits and risks

Art. 220

Where the agreement stipulates a date on which the buyer is to take possession of the property, the presumption is that the associated benefits and risks do not pass to the buyer until that date.

F. Reference to chattel sale

Art. 221

In other respects, the provisions governing chattel sale apply mutatis mutandis to the sale and purchase of immovable property.

Section Four: Special Types of Sale

A. Sale by sample

Art. 222

1 In a sale by sample, the person to whom the sample was entrusted is not obliged to prove that the sample he presented is identical with the one received; his personal assurance to the court is sufficient, even where the sample presented has altered in form since delivery, provided that such alteration was a necessary consequence of the examination made of the sample. 2 In any event the other party is entitled to prove that the sample is not the same one. 3 If the sample has been spoiled or been destroyed while in the possession of the buyer, even if he was not at fault, the onus is not on the seller to prove that the object conforms with the sample, but on the buyer to prove the contrary.

B. Sale on approval or inspection

I. Effect

Art. 223

1 In a sale on approval or inspection, the buyer is free to accept or refuse the object. 2 Until it is accepted, the seller remains its owner even if it has passed into the buyer’s possession.

II. Inspection on the seller’s premises

Art. 224

1 Where the object is to be inspected on the premises of the seller, he is released from his obligation if the buyer fails to accept the object within the agreed or customary time limit. 2 In the absence of any such time limit the seller may, after an appropriate interval, call on the buyer to declare whether he accepts the object, and the seller is released from his obligation if the buyer fails to make such declaration immediately on request.

III. Inspection on the buyer’s premises

Art. 225

1 Where the object has been delivered to the buyer prior to inspection, the sale is deemed to have been approved if the buyer neither declares that he rejects the object nor returns it within the agreed or customary time limit or, in the absence of any such time limit, immediately on demand by the seller. 2 The sale is similarly treated as completed, if the buyer pays the whole or part of the price without reservation or if he deals with the property otherwise than was necessary for its inspection.

Art. 226

Repealed by No I of the FA of 23 March 1962, with effect from 1 Jan. 1963 (AS 1962 1047; BBl 1960 I 523).

C. ...

Art. 226a–226d

Inserted by No I of the FA of 23 March 1962 (AS 1962 1047; BBl 1960 I 523). Repealed by Annex 2 No II 1 to the FA of 23 March 2001 on Consumer Credit, with effect from 1 Jan. 2003 (AS 2002 3846; BBl 1999 III 3155).

Art. 226e

Inserted by No I of the FA of 23 March 1962 (AS 1962 1047; BBl 1960 I 523). Repealed by No I of the FA of 14 Dec. 1990, with effect from 1 July 1991 (AS 1991 974; BBl 1989 III 1233, 1990 I 120).

Art. 226f–226k

Inserted by No I of the FA of 23 March 1962 (AS 1962 1047; BBl 1960 I 523). Repealed by Annex 2 No II 1 to the FA of 23 March 2001 on Consumer Credit, with effect from 1 Jan. 2003 (AS 2002 3846; BBl 1999 III 3155).

Art. 226l

Inserted by No I of the FA of 23 March 1962 (AS 1962 1047; BBl 1960 I 523). Repealed by Annex No 5 to the Civil Jurisdiction Act of 24 March 2000, with effect from 1 Jan. 2001 (AS 2000 2355; BBl 1999 III 2829).

Art. 226m

Inserted by No I of the FA of 23 March 1962 (AS 1962 1047; BBl 1960 I 523). Repealed by Annex 2 No II 1 to the FA of 23 March 2001 on Consumer Credit, with effect from 1 Jan. 2003 (AS 2002 3846; BBl 1999 III 3155).

Art. 227

Repealed by No I of the FA of 23 March 1962, with effect from 1 Jan. 1963 (AS 1962 1047; BBl 1960 I 523).

Art. 227a–227i

Inserted by No I of the FA of 23 March 1962 (AS 1962 1047; BBl 1960 I 523). Repealed by No I of the FA of 13 Dec. 2013 (Repeal of the Provisions on Advance Payment Agreements), with effect from 1 July 2014 (AS 2014 869; BBl 2013 4631 5793).

Art. 228

Repealed by No I of the FA of 13 Dec. 2013 (Repeal of the Provisions on Advance Payment Agreements), with effect from 1 July 2014 (AS 2014 869; BBl 2013 4631 5793).

D. Auctions

I. Conclusion of the purchase

Art. 229

1 At a compulsory auction, a contract of sale is concluded when the official auctioneer knocks the object down to the highest bidder. 2 In the case of a voluntary auction that has been publicly announced and is open to all bidders, a contract of sale is concluded when the seller accepts the bid of the highest bidder. 3 Unless the seller has expressed some other intention, the auctioneer is deemed to have the authority to knock the object down to the highest bidder.

II. Avoidance

Art. 230

1 Any interested party may within ten days bring a claim for avoidance in respect of an auction whose outcome has been influenced by unlawful or immoral means. 2 In the case of a compulsory auction, the avoidance claim must be brought before the supervisory authority, and in all other cases before the court.

III. Binding nature of bids at auction

1. In general

Art. 231

1 A bidder is bound by his offer according to the auction terms and conditions. 2 Unless these provide otherwise, he is released from his obligation if a higher bid is made or if his own bid is not accepted immediately after the usual call has been made.

2. Immovable property

Art. 232

1 In the case immovable property, the highest bid must be accepted or refused at the auction itself. 2 Any condition whereby the bidder is bound to maintain his bid after the auction is void, other than in the case of compulsory auctions or sales of land or buildings that require official approval.

IV. Cash payment

Art. 233

1 The successful bidder must pay in cash unless the auction terms and conditions provide otherwise. 2 The seller may immediately withdraw from the transaction if payment is not tendered in cash or in accordance with the auction terms and conditions.

V. Warranty

Art. 234

1 Sale at compulsory auction is without warranty, apart from special assurances given or where the bidders are intentionally deceived. 2 The successful bidder acquires the object in the condition and with the attendant rights and encumbrances indicated in the public registers or the lot description and/or those that exist by operation of law. 3 In sales at voluntary public auction, the seller has the same liability as in any other sale, but in the lot description he may disclaim any warranty obligation with the exception of liability for intentional deceit.

VI. Transfer of ownership

Art. 235

1 The successful bidder for a chattel acquires title to it as soon as it is knocked down to him, whereas ownership of immovable property is not transferred until the entry is made in the land register. 2 The official auctioneers immediately notify the land registry of the sale at auction by reference to the formal auction record. 3 The provisions governing acquisition of ownership at compulsory auction are reserved.

VII. Cantonal provisions

Art. 236

The cantons may enact other provisions governing sale at public auction within the bounds of federal law.

Section Five: The Contract of Exchange

A. Reference to provisions governing purchase

Art. 237

The rules governing contracts of sale also apply to contracts of exchange in the sense that each party to the exchange is treated as seller in respect of the object promised by him and as buyer in respect of the object promised to him.

B. Warranty

Art. 238

A party to the exchange who is dispossessed of the object received or has returned it as defective may either claim for damages or for the return of the object that he delivered.

Title Seven: The Gift

A. Definition

Art. 239

1 A gift is any inter vivos disposition in which a person uses his assets to enrich another without receiving an equivalent consideration. 2 Waiving a right before having acquired it or renouncing an inheritance does not constitute a gift. 3 The performance of a moral duty is not considered to be a gift.

B. Personal capacity

I. Of the donor

Art. 240

1 A person with capacity to act may make gifts of his assets within the bounds imposed by matrimonial property law and inheritance law. 2 The assets of a person who lacks capacity to act may be used only to make customary occasional gifts. The liability of the legal representative is reserved. 3 ...

Para. 2 — Amended by Annex No 10 of the FA of 19 Dec. 2008 (Adult Protection, Law of Persons and Law of Children), in force since 1 Jan. 2013 (AS 2011 725; BBl 2006 7001). Para. 3 — Repealed by Annex No 10 of the FA of 19 Dec. 2008 (Adult Protection, Law of Persons and Law of Children), with effect from 1 Jan. 2013 (AS 2011 725; BBl 2006 7001).

II. Of the recipient

Art. 241

1 A person who lacks capacity to act may accept and legally acquire title to a gift provided he has capacity to consent. 2 However, the gift is not acquired or is annulled where his legal representative forbids him to accept it or instructs him to return it.

C. Establishing the gift

I. From hand to hand

Art. 242

1 A gift from hand to hand is made when the donor presents the object to the recipient. 2 Gifts of title or rights in rem to immovable property are not effective until an entry is made in the land register. 3 The entry presupposes a valid promise to give.

II. Promise of a gift

Art. 243

1 The promise of a gift is valid only if done in writing. 2 A promise to give title or rights in rem to immovable property is valid only if done as a public deed. 3 On fulfilment of the promise to give, the relationship is treated as a gift from hand to hand.

III. Effect of acceptance

Art. 244

A person who bestows an object on another person by way of a gift may reverse the bestowal at any time before the recipient has accepted it, even where he has effectively separated it from his assets.

D. Conditions and provisos

I. In general

Art. 245

1 Conditions or provisos may be attached to a gift. 2 A gift whose occurrence is made contingent on the donor’s death is subject to the provisions governing testamentary dispositions.

II. Fulfilment of provisos

Art. 246

1 The donor may bring action for fulfilment of a proviso that has been accepted by the recipient. 2 Where fulfilment of the proviso is in the public interest, the competent authority may compel fulfilment after the death of the donor. 3 The recipient may refuse to fulfil the proviso if the value of the gift does not cover the expenses occasioned by the proviso and he is not reimbursed for the shortfall.

III. Reversion clause

Art. 247

1 The donor may provide that the object given shall revert to him in the event that the recipient dies before he does. 2 A reversionary right attached to a gift of title or rights in rem to immovable property may be entered under priority notice in the land register.

E. Liability of the donor

Art. 248

1 The donor is liable for damage caused by the gift to the recipient only in the event of wilful injury or gross negligence. 2 He need give only such warranty as he has promised in respect of the object given or the claim assigned.

F. Annulment of gifts

I. Claim for return of gift

Art. 249

Where a gift has been made from hand to hand or a promise to give has been fulfilled, the donor may revoke the gift and claim return of the object given, provided the recipient is still enriched thereby: 1. if the recipient has committed a serious criminal offence against the donor or a person close to him; 2. if the recipient has grossly neglected his duties under family law towards the donor or any of the latter’s dependants; 3. if the recipient has failed without good cause to fulfil the provisos attached to the gift.

let. 1 — Amended by Annex No 2 to the FA of 26 June 1998, in force since 1 Jan. 2000 (AS 1999 1118; BBl 1996 I 1).

II. Revocation and invalidation of a promise to gi

Art. 250

1 The donor who has made a promise to give may revoke the promise and refuse to fulfil it: 1. on the same grounds as justify a claim for return of the object given in the case of a gift from hand to hand; 2. where since the promise was made the donor’s financial situation has altered to such an extent that making the gift would cause serious hardship; 3. where since the promise was made the donor has acquired duties under family law that previously did not exist or were significantly less onerous. 2 All promises to give are annulled when an unpaid debt certificate is issued against the donor or he is declared bankrupt.

III. Prescription and heirs’ right of action

Art. 251

1 Revocation may take place at any time in the year commencing on the day on which the grounds for revocation came to the donor’s attention. 2 If the donor dies before the end of this one-year period, his right of action passes to his heirs for the remainder of the period. 3 The donor’s heirs may revoke the gift if the recipient wilfully and unlawfully caused the donor’s death or prevented him from exercising his right of revocation.

IV. Death of the donor

Art. 252

Unless otherwise provided, where the donor has undertaken to make periodic payments or performance, his obligation is extinguished on his death.

Title Eight: The Lease

Amended by No I of the FA of 15 Dec. 1989, in force since 1 July 1990 (AS 1990 802; BBl 1985 I 1369). See also the financial provisions of Titles VIII and VIIIbis Art. 5, at the end of this Code.

Section One: General Provisions

A. Definition and scope of application

I. Definition

Art. 253

Leases are contracts in which a landlord or lessor grants a tenant or lessee the use of an object in exchange for rent.

II. Scope of application

1. Residential and commercial premises

Art. 253a

1 The provisions governing the leasing of residential and commercial premises are also applicable to objects on such premises of which the tenant has use. 2 They are not applicable to holiday homes hired for three months or less. 3 The Federal Council issues the provisions for implementation.

2. Provisions on protection against unfair rents

Art. 253b

1 The provisions governing protection against unfair rents (Art. 269 et seq.) apply mutatis mutandis to non-agricultural leases and to other contracts whose essential purpose is to regulate the transfer of the use of residential or commercial premises against valuable consideration. 2 They do not apply to the lease of luxury apartments and single-occupancy residential units with six or more bedrooms and reception rooms (not including the kitchen). 3 The provisions governing challenges to unfair rents do not apply to residential premises made available with public sector support for which rent levels are set by a public authority.

B. Tie-in transactions

Art. 254

A tie-in transaction linked to a lease of residential or commercial premises is void where the conclusion or continuation of the lease is made conditional on such transaction and, under its terms, the tenant assumes an obligation towards the landlord or a third party which is not directly connected with the use of the leased premises.

C. Duration

Art. 255

1 Leases may be concluded for a limited or indefinite duration. 2 Where the intention is that they should end without notice on expiry of the agreed duration, they have a limited duration. 3 Other leases are deemed to be of indefinite duration.

D. Obligations of the landlord

I. In general

Art. 256

1 The landlord or lessor is required to make the object available on the agreed date in a condition fit for its designated use and to maintain it in that condition. 2 Clauses to the contrary to the detriment of the tenant or lessee are void if they are set out: a. in previously formulated general terms and conditions; b. in leases for residential or commercial premises.

II. Duty of disclosure

Art. 256a

1 If a report was drawn up on the return of the object at the end of the previous lease, the landlord or lessor must on request make this document available for perusal by the new tenant or lessee when the object is handed over to him. 2 Similarly, the new tenant or lessee has the right to be informed of the amount of rent paid under the previous lease.

III. Charges and taxes

Art. 256b

The landlord or lessor bears all taxes and charges in connection with the leased object.

E. Obligations of the tenant or lessee

I. Payment of rent and accessory charges

1. Rent

Art. 257

The rent is the consideration owed by the tenant or lessee to the landlord or lessor for the transfer of the use of the object.

2. Accessory charges

a. In general

Art. 257a

1 Accessory charges are the consideration due for services provided by the landlord or lessor or a third party in connection with the use of the property. 2 They are payable by the tenant or lessee only where this has been specifically agreed with the landlord or lessor.

b. Residential and commercial premises

Art. 257b

1 Accessory charges for residential and commercial premises are the actual outlays made by the landlord for services connected with the use of the property, such as heating, hot water and other operating costs, as well as public taxes arising from the use of the property. 2 The landlord must allow the tenant on his request to inspect the documentation for such outlays.

3. Payment deadlines

Art. 257c

The tenant or lessee must pay the rent and, where applicable, the accessory charges at the end of each month and at the latest on expiry of the lease, unless otherwise agreed or required by local custom.

4. Tenant in arrears

Art. 257d

1 Where, having accepted the property, the tenant or lessee is in arrears with payments of rent or accessory charges, the landlord or lessor may set a time limit for payment and notify him that in the event of non-payment the landlord or lessor will terminate the lease on expiry of that time limit. The minimum time limit is ten days, and 30 days for leases of residential or commercial premises. 2 In the event of non-payment within the time limit the landlord or lessor may terminate the contract with immediate effect or, for leases of residential and commercial premises, subject to at least 30 days’ notice ending on the last day of a calendar month.

II. Security furnished by the tenant

Art. 257e

1 Where the tenant of residential or commercial premises furnishes security in the form of cash or negotiable securities, the landlord must deposit it in a bank savings or deposit account in the tenant’s name. 2 In residential leases, the landlord is not entitled to ask for more than three months’ rent by way of security. 3 The bank may release such security only with the consent of both parties or in compliance with a final payment order or final decision of the court. On expiry of one year following the end of the lease, the tenant or lessee may request that the security be returned to him by the bank if no claim has been brought against him by the landlord or lessor. 4 The cantons may enact further provisions.

III. Care and consideration

Art. 257f

1 The tenant or lessee must use the object with all due care. 2 Where the lease relates to immovable property, the tenant must show due consideration for others who share the building and for neighbours. 3 If, despite written warning from the landlord or lessor, the tenant or lessee continues to act in breach of his duty of care and consideration such that continuation of the lease becomes unconscionable for the landlord or lessor or other persons sharing the building, the landlord or lessor may terminate the contract with immediate effect or, for leases of residential and commercial premises, subject to at least 30 days’ notice ending on the last day of a calendar month. 4 However, leases of residential and commercial premises may be terminated with immediate effect if the tenant intentionally causes serious damage to the property.

IV. Duty of notification

Art. 257g

1 On learning of defects which he himself is not obliged to remedy, the tenant or lessee must inform the landlord or lessor. 2 Failure to notify renders the tenant or lessee liable for any damage incurred by the landlord or lessor as a result.

V. Duty of tolerance

Art. 257h

1 The tenant or lessee must tolerate works intended to remedy defects in the object or to repair or prevent damage. 2 The tenant or lessee must permit the landlord or lessor to inspect the object to the extent required for maintenance, sale or future leasing. 3 The landlord or lessor must inform the tenant or lessee of works and inspections in good time and take all due account of the latter’s interests when they are carried out; all claims of the tenant or lessee for reduction of the rent (Art. 259d) and for damages (Art. 259e) are reserved.

F. Non-performance or defective performance when o

Art. 258

1 Where the landlord or lessor fails to hand over the property on the agreed date or hands it over with defects rendering it wholly or partly unfit for its designated use, the tenant or lessee may sue for non-performance of contractual obligations pursuant to Articles 107–109 above. 2 Where the tenant or lessee accepts the object despite such defects but insists that the contract be duly performed, he may make only such claims as would have accrued to him had the defects arisen during the lease (Art. 259a–259i). 3 The tenant or lessee may bring the claims pursuant to Articles 259a–259i below even if, when handed over to him, the object has defects: a. which render the object less fit for its designated use, albeit not substantially so; b. which the tenant or lessee would have to remedy at his own expense during the lease (Art. 259).

G. Defects during the contract

I. Obligation of tenant to carry out minor cleanin

Art. 259

The tenant or lessee must remedy defects which can be dealt with by minor cleaning or repairs as part of regular maintenance and, depending on local custom, must do so at his own expense.

II. Rights of the tenant

1. In general

Art. 259a

1 Where defects arise in the object which are not attributable to the tenant or lessee and which he is not obliged to remedy at his own expense, or where he is prevented from using the object as contractually agreed, he may require that the landlord or lessor: a. repair the object; b. reduce the rent proportionately; c. pay damages; d. assume responsibility for litigation against a third party. 2 In addition, a tenant of immovable property may pay rent on deposit rather than to the landlord.

2. Remedy of defects

a. General principle

Art. 259b

Where the landlord is aware of a defect and fails to remedy it within a reasonable time, the tenant may: a. terminate the contract with immediate effect if the defect renders the leased property unfit or significantly less fit for its designated use or renders a chattel less fit for purpose; b. arrange for the defect to be remedied at the landlord’s or lessor’s expense if it renders the object less fit for its designated use, albeit not substantially so.

b. Exception

Art. 259c

The tenant or lessee is not entitled to rectification of the defect where the landlord or lessor provides full compensation for the defective object within a reasonable time.

3. Reduction of rent

Art. 259d

Where the object is rendered unfit or less fit for its designated use, the tenant or lessee may require the landlord or lessor to reduce the rent proportionately from the time when the landlord or lessor became aware of the defect until the defect is remedied.

4. Damages

Art. 259e

Where the defect has caused damage to the tenant or lessee, the landlord or lessor is liable in damages unless he can prove that he was not at fault.

5. Assumption of litigation

Art. 259f

Where a third party claims a right over the object that is incompatible with the rights of the tenant or lessee, on notification by the latter the landlord or lessor is obliged to assume responsibility for the litigation.

6. Deposit of rent

a. General principle

Art. 259g

1 A tenant of immovable property requesting that a defect be remedied must, in writing, set the landlord a reasonable time limit within which to comply with such request and may warn him that, in the event of failure to comply, on expiry of the time limit the tenant will deposit his future rent payments with an office designated by the canton. He must notify the landlord in writing of his intention to pay rent on deposit. 2 Rent paid on deposit is deemed duly paid.

b. Release of deposited rent

Art. 259h

1 The landlord becomes entitled to the rent paid on deposit if the tenant or lessee does not bring claims against him before the conciliation authority within 30 days of the due date for the first rent payment paid into deposit. 2 On being notified by the tenant that he intends to pay rent on deposit as it falls due, the landlord may apply to the conciliation authority for release of rent unjustly paid on deposit.

c. Procedure

Art. 259i

The procedure is governed by the CPO.

Art. 259i — Amended by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, in force since 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221). SR 272

H. Renovations and modifications

I. By the landlord

Art. 260

1 The landlord or lessor may renovate or modify the object only where conscionable for the tenant or lessee and the lease has not been terminated. 2 In carrying out such works, the landlord or lessor must give due consideration to the tenant or lessee’s interests; all claims of the tenant or lessee for reduction of the rent (Art. 259d) and for damages (Art. 259e) are reserved.

II. By the tenant

Art. 260a

1 The tenant or lessee may renovate or modify the object only with the written consent of the landlord or lessor. 2 Once such consent has been given, the landlord or lessor may require the restoration of the object to its previous condition only if this has been agreed in writing. 3 Where at the end of the lease the object has appreciated significantly in value as a result of renovations or modifications to which the landlord or lessor consented, the tenant or lessee may claim appropriate compensation for such appreciation, subject to any written agreements providing for higher levels of compensation.

J. Change of ownership

I. Alienation of the object

Art. 261

1 Where after concluding the contract the landlord alienates the object or is dispossessed of it in debt collection or bankruptcy proceedings, the lease passes to the acquirer together with ownership of the object. 2 However, the new owner may: a. serve notice to terminate a lease on residential or commercial premises as of the next legally admissible termination date if he claims an urgent need of such premises for himself, his close relatives or in-laws; b. serve notice to terminate a rental agreement in respect of other objects as of the next legally admissible termination date unless the contract allows for earlier termination. 3 If the new owner terminates sooner than is permitted under the contract with the existing landlord or lessor, the latter is liable for all resultant losses. 4 The provisions governing compulsory purchase are unaffected.

II. Conferral of limited rights in rem

Art. 261a

Where the landlord or lessor grants a third party a limited right in rem and this is tantamount to a change of ownership, the provisions governing alienation of the object apply mutatis mutandis.

III. Entry under priority notice in the land regis

Art. 261b

1 The parties to a lease may agree to have it entered under priority notice in the land register. 2 The effect of such entry is that every future owner must allow the property to be used in accordance with the lease.

K. Sub-letting

Art. 262

1 A tenant may sub-let all or part of the property with the landlord’s consent. 2 The landlord may refuse his consent only if: a. the tenant refuses to inform him of the terms of the sub-lease; b. the terms and conditions of the sub-lease are unfair in comparison with those of the principal lease; c. the sub-letting gives rise to major disadvantages for the landlord. 3 The tenant is liable to the landlord for ensuring that the sub-tenant uses the property only in the manner permitted to the tenant himself. To this end the landlord may issue reminders directly to the sub-tenant.

L. Transfer of lease to a third party

Art. 263

1 The tenant of commercial premises may transfer his lease to a third party with the landlord’s written consent. 2 The landlord may withhold consent only for good cause. 3 Once the landlord gives his consent, the third party is subrogated to the rights and obligations of the tenant under the lease. 4 The tenant is released from his obligations towards the landlord. However, he remains jointly and severally liable with the third party until such time as the lease ends or may be terminated under the contract or by law, but in any event for no more than two years.

M. Early return of the object

Art. 264

1 Where the tenant or lessee returns the object without observing the notice period or the deadline for termination, he is released from his obligations towards the landlord or lessor only if he proposes a new tenant or lessee who is acceptable to the landlord or lessor, solvent and willing to take on the lease or rental agreement under the same terms and conditions. 2 Otherwise, the tenant or lessee must continue to pay the rent until such time as the lease ends or may be terminated under the contract or by law. 3 Against the rent owing to him, the landlord or lessor must permit account to be taken of: a. any expenses he has saved, and b. any earnings which he has obtained, or intentionally failed to obtain, from putting the object to some other use.

N. Set-off

Art. 265

The landlord or lessor and the tenant or lessee may not waive in advance their right to set off claims arising from the lease.

O. End of lease

I. Expiry of agreed duration

Art. 266

1 Where the parties have expressly or tacitly agreed to a limited duration, the lease comes to an end on expiry thereof without any need for notice to be given. 2 If the lease is tacitly continued, its duration becomes indefinite.

II. Notice of termination and termination dates

1. In general

Art. 266a

1 The parties may give notice to terminate a lease of indefinite duration by observing the legally prescribed notice periods and termination dates, except where they have agreed a longer notice period or a different termination date. 2 Where the prescribed notice period or termination date is not observed, termination will be effective as of the next termination date.

2. Immovable and movable structures

Art. 266b

A party may terminate a lease of immovable property or a movable structure by giving three months’ notice expiring on a date fixed by local custom or, in the absence of such custom, at the end of a six-month period of the lease.

3. Residential premises

Art. 266c

A party may terminate a lease of residential premises by giving three months’ notice expiring on a date fixed by local custom or, in the absence of such custom, at the end of a three-month period of the lease.

4. Commercial premises

Art. 266d

A party may terminate the lease of a commercial property by giving six months’ notice expiring on a date fixed by local custom or, in the absence of such custom, at the end of a three-month period of the lease.

5. Furnished rooms and parking spaces

Art. 266e

A party may terminate the lease of furnished rooms, a separately rented parking space or other comparable facility by giving two weeks’ notice expiring at the end of a one-month period of the lease.

6. Chattels

Art. 266f

A party may terminate a lease of chattels by giving three days’ notice expiring at any time.

III. Extraordinary notice

1. Good cause

Art. 266g

1 Where performance of the contract becomes unconscionable for the parties for good cause, they may terminate the lease by giving the legally prescribed notice expiring at any time. 2 The court determines the financial consequences of early termination, taking due account of all the circumstances.

2. Bankruptcy of the tenant or lessee

Art. 266h

1 Where the tenant or lessee becomes bankrupt after taking possession of the property, the landlord or lessor may call for security for future rent payments. He must grant the tenant or lessee and the bankruptcy administrators an appropriate time limit in which to furnish it. 2 Where no such security is furnished to the landlord or lessor, he may terminate the contract with immediate effect.

3. Death of the tenant or lessee

Art. 266i

In the event of the death of the tenant or lessee, his heirs may terminate the contract by giving the legally prescribed notice expiring on the next admissible termination date.

4. Chattels

Art. 266k

A lessee of a chattel hired for his own private use and leased to him on a commercial basis by the lessor may terminate the lease by giving at least 30 days’ notice expiring at the end of a three-month period of the lease. The lessor has no claim for compensation.

IV. Required form of notice for residential and co

1. In general

Art. 266l

1 Notice to terminate leases of residential and commercial premises must be given in writing. 2 The landlord must give notice of termination using a form approved by the canton which informs the tenant how he must proceed if he wishes to contest the termination or apply for an extension of the lease.

2. Family residence

a. Notice given by the tenant

Art. 266m

1 Where the leased property serves as the family residence, one spouse may not terminate the lease without the express consent of the other. 2 If the spouse cannot obtain such consent or it is withheld without good cause, he or she may apply to the court. 3 The same provisions apply mutatis mutandis to registered partners.

Para. 3 — Inserted by Annex No 11 to the Same-Sex Partnership Act of 18 June 2004, in force since 1 Jan. 2007 (AS 2005 5685; BBl 2003 1288).

b. Notice given by the landlord

Art. 266n

Notice of termination given by the landlord and any notification of a time limit for payment accompanied by a warning of termination in the event of non-payment (Art. 257d) must be served separately on the tenant and on his spouse or registered partner.

Art. 266n — Amended by Annex No 11 to the Same-Sex Partnership Act of 18 June 2004, in force since 1 Jan. 2007 (AS 2005 5685; BBl 2003 1288).

3. Void notice

Art. 266o

Notice of termination is void if it does not conform to Articles 266l–266n.

P. Return of the object

I. In general

Art. 267

1 At the end of the lease, the tenant or lessee must return the object in a condition that accords with its contractually designated use. 2 Any clause whereby the tenant or lessee undertakes to pay compensation on termination of the lease is void except insofar as such compensation relates to possible damage.

II. Inspection of object and notification of tenan

Art. 267a

1 When the object is returned, the landlord or lessor must inspect its condition and immediately inform the tenant or lessee of any defects for which he is answerable. 2 If the landlord or lessor fails to do so, he forfeits his claims save in respect of defects not detectable on customary inspection. 3 Where the landlord or lessor discovers such defects subsequently, he must inform the tenant or lessee immediately.

Q. Landlord’s special lien

I. Scope

Art. 268

1 As security for rent for the past year and the current six-month period, a landlord of commercial premises has a special lien on chattels located on the leased premises and either used as fixtures or required for the use of the premises. 2 The landlord’s special lien also extends to property brought onto the premises by a sub-tenant to the extent that he has not paid his rent. 3 Goods not subject to attachment by creditors of the tenant are not subject to the lien.

II. Objects belonging to third parties

Art. 268a

1 The rights of third parties to objects which the landlord knew or should have known do not belong to the tenant and to stolen, lost, missing or otherwise mislaid objects take precedence over the landlord’s special lien. 2 Where the landlord learns only during the lease that objects brought onto the premises by the tenant are not the latter’s property, his lien on them is extinguished unless he terminates the lease as of the next admissible termination date.

III. Exercise of lien

Art. 268b

1 Where the tenant wishes to vacate the premises or intends to remove the objects located thereon, the landlord may, with the assistance of the competent authority, retain such objects as are required to secure his claim. 2 Items removed secretly or by force may, with police assistance, be brought back onto the premises within ten days of their removal.

Section Two: Protection against Unfair Rents or ot

A. Unfair rent

I. General rule

Art. 269

Rents are unfair where they permit the landlord to derive excessive income from the leased property or where they are based on a clearly excessive sale price.

II. Exceptions

Art. 269a

In particular, rents are not generally held to be unfair if: a. they fall within the range of rents customary in the locality or district; b. they are justified by increases in costs or by additional services provided by the landlord; c. in the case of a recently constructed property, they do not exceed the range of gross pre-tax yield required to cover costs; d. they serve merely to balance out a rent decrease previously granted as part of a reallocation of funding costs at prevailing market rates and they are set out in a payment plan made known to the tenant in advance; e. they serve merely to balance out the inflation on the risk capital; f. they do not exceed the levels recommended in master agreements drawn up by landlords’ and tenants’ associations or organisations representing similar interests.

B. Index-linked rent

Art. 269b

An agreement to link rent to an index is valid only where the lease is contracted for at least five years and the benchmark is the Swiss consumer prices index.

C. Periodical rent increases

Art. 269c

An agreement to increase the rent periodically by fixed amounts is valid only where: a. the lease is contracted for at least three years; b. the rent is increased no more than once a year; and c. the amount by which it is increased is fixed in francs.

D. Rent increases and other unilateral amendments

Art. 269d

1 The landlord may at any time increase the rent with effect from the next termination date. He must give notice of and reasons for the rent increase at least ten days before the beginning of the notice period for termination using a form approved by the canton. 2 The rent increase is void where: a. it is not communicated using the prescribed form; b. no reasons are given; c. notice of the increase is accompanied by notice to terminate or a threat of termination. 3 Paragraphs 1 and 2 also apply where the landlord intends to make other unilateral amendments to the lease to the detriment of the tenant, for example by reducing the services provided or adding new accessory charges. 4 Notice of a rent increase and other unilateral contract amendments may be given by appending a signature reproduced by mechanical means to the prescribed form. 5 In the case of a rent increase in accordance with an agreement under Article 269c, it is sufficient that notice be given in writing.

Para. 4 — Inserted by No I of the FA of 29 Sept. 2023 (Tenancy Law: Formal Requirements), in force since 1 Oct. 2025 (AS 2025 197; BBl 2022 2100, 2624). Para. 5 — Inserted by No I of the FA of 29 Sept. 2023 (Tenancy Law: Formal Requirements), in force since 1 Oct. 2025 (AS 2025 197; BBl 2022 2100, 2624).

E. Challenge to rent

I. Request for rent reduction

1. Initial rent

Art. 270

1 Within 30 days of taking possession of the property, the tenant may challenge the initial rent as unfair within the meaning of Articles 269 and 269a before the conciliation authority and request said authority to order a reduction of the rent: a. if the tenant felt compelled to conclude the lease agreement on account of personal or family hardship or by reason of the conditions prevailing on the local market for residential and commercial premises; or b. if the initial rent required by the landlord is significantly higher than the previous rent for the same property. 2 In the event of a housing shortage, the cantons may make it obligatory in all or part of their territory to use the form stipulated in Article 269d when contracting any new lease.

2. During the lease

Art. 270a

1 The tenant may challenge the rent as unfair and request its reduction as of the next termination date where he has good cause to suppose that, because of significant changes to the calculation basis and most notably a reduction in costs, the return derived by the landlord from the leased property is now excessive within the meaning of Articles 269 and 269a. 2 The tenant must present his request for a rent reduction in writing to the landlord, who has 30 days in which to respond. Where the landlord does not accede to the request in full or in part or does not respond in good time, the tenant may apply to the conciliation authority within 30 days. 3 Paragraph 2 does not apply if the tenant is simultaneously challenging a rent increase and requesting a rent reduction.

II. Challenging rent increases and other unilatera

Art. 270b

1 Within 30 days of receiving notice of a rent increase, the tenant may challenge it before the conciliation authority as unfair within the meaning of Articles 269 and 269a. 2 Paragraph 1 also applies where the landlord makes other unilateral amendments to the lease to the detriment of the tenant, in particular by reducing the services provided or adding new accessory charges.

III. Challenging index-linked rent

Art. 270c

Without prejudice to the right to challenge the initial rent, a party may argue before the conciliation authority only that the rent increase or reduction requested by the other party is not justified by a corresponding change in the index.

IV. Challenging periodical rent increases

Art. 270d

Without prejudice to the right to challenge the initial rent, the tenant may not challenge periodical rent increases.

F. Continued validity of lease during challenge pr

Art. 270e

The existing lease remains in force without change: a. during conciliation proceedings, where the parties fail to reach agreement; b. during court proceedings, subject to provisional measures ordered by the court.

Section Three: Protection against Termination of L

A. Notice open to challenge

I. In general

Art. 271

1 Notice of termination may be challenged where it contravenes the principle of good faith. 2 On request, reasons for giving notice must be stated.

II. Notice served by the landlord

Art. 271a

1 Notice of termination served by the landlord may be challenged in particular where it is given: a. because the tenant is asserting claims arising under the lease in good faith; b. because the landlord wishes to impose a unilateral amendment of the lease to the tenant’s detriment or to change the rent; c. for the sole purpose of inducing the tenant to purchase the leased premises; d. during conciliation or court proceedings in connection with the lease, unless the tenant initiated such proceedings in bad faith; e. within three years of the conclusion of conciliation or court proceedings in connection with the lease in which the landlord: 1. was largely unsuccessful, 2. withdrew or considerably reduced his claim or action, 3. declined to bring the matter before the court, 4. reached a settlement or some other compromise with the tenant; f. because of changes in the tenant’s family circumstances which do not give rise to any significant disadvantage to the landlord. 2 Paragraph 1 let. e

B. Extension of the lease

I. Tenant’s entitlement

Art. 272

1 The tenant may request the extension of a fixed-term or open-ended lease where termination of the lease would cause a degree of hardship for him or his family that cannot be justified by the interests of the landlord. 2 When weighing the respective interests, the competent authority has particular regard to: a. the circumstances in which the lease was contracted and the terms of the lease; b. the duration of the lease; c. the personal, family and financial circumstances of the parties, as well as their conduct; d. any need that the landlord might have to use the premises for himself, his family members or his in-laws and the urgency of such need; e. the conditions prevailing on the local market for residential and commercial premises. 3 Where the tenant requests a second extension, the competent authority must also consider whether the tenant has done everything that might reasonably be expected of him to mitigate the hardship caused by the notice of termination.

II. Exclusion of extension

Art. 272a

1 No extension is granted where notice of termination is given: a. because the tenant is in default on his payments (Art. 257d); b. because the tenant is in serious breach of his duty of care and consideration (Art. 257f para. 3 and 4); c. because the tenant is bankrupt (Art. 266h); d. in respect of a lease expressly concluded for a limited period until refurbishment or demolition works begin or the requisite planning permission is obtained. 2 As a general rule, no extension is granted where the landlord offers the tenant equivalent residential or commercial premises.

III. Length of extension

Art. 272b

1 A lease may be extended by up to four years in the case of residential premises and by up to six years for commercial premises. Within these overall limits, one or two extensions may be granted. 2 Where the parties agree to an extension of the lease, they are not bound by a maximum duration and the tenant may waive a second extension.

IV. Continued validity of lease

Art. 272c

1 Either party may ask the court to modify the lease in line with changed circumstances when deciding on the lease extension. 2 Where the lease is not varied in the decision on the lease extension, it remains in force during the extension period, subject to other means of variation envisaged by law.

V. Notice given during extension

Art. 272d

Unless the decision on extension or the extension agreement stipulates otherwise, the tenant may terminate the lease: a. by giving one month’s notice expiring at the end of a calendar month in cases where the extension does not exceed one year; b. by giving three months’ notice expiring on an admissible termination date in cases where the extension exceeds one year.

C. Time limits and procedure

Amended by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, in force since 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221).

Art. 273

1 A party wishing to challenge termination must bring the matter before the conciliation authority within 30 days of receiving the notice of termination. 2 A tenant wishing to apply for a lease extension must submit his request to the conciliation authority: a. within 30 days of receiving the notice of termination, where the lease is open-ended; b. not later than 60 days before expiry of the lease, where it is of limited duration. 3 A tenant requesting a second extension must submit his request to the conciliation authority not later than 60 days before expiry of the first extension. 4 The procedure before the conciliation authority is governed by the CPO. 5 Where the competent authority rejects a request made by the tenant relating to challenging termination, it must examine ex officio whether the lease may be extended.

Para. 4 — SR 272 Para. 4 — Amended by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, in force since 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221). Para. 5 — Amended by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, in force since 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221).

D. Family residence

Art. 273a

1 Where the leased property serves as the family residence, the tenant’s spouse is likewise entitled to challenge the termination, request a lease extension and exercise the other rights accruing to the tenant in the event that notice of termination is served. 2 Agreements providing for an extension of the lease are valid only if concluded with both spouses. 3 The same provisions apply mutatis mutandis to registered partners.

Para. 3 — Inserted by Annex No 11 to the Same-Sex Partnership Act of 18 June 2004, in force since 1 Jan. 2007 (AS 2005 5685; BBl 2003 1288).

E. Sub-letting

Art. 273b

1 The provisions of this Chapter apply to sub-leases provided the principal lease has not been terminated. A sub-lease may be extended only within the duration of the principal lease. 2 Where the main purpose of the sub-lease is to circumvent the provisions governing protection against termination, the sub-tenant is granted such protection without regard to the principal lease. If the principal lease is terminated, the landlord is subrogated to the rights of the tenant in his contract with the sub-tenant.

F. Mandatory provisions

Art. 273c

1 The tenant may waive the rights conferred on him by the provisions of this Chapter only where this is expressly envisaged. 2 All agreements to the contrary are void.

Section Four: ...

Art. 274–274g

Repealed by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, with effect from 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221).

Title Eightbis: The Usufructuary Lease

Inserted by No I of the FA of 15 Dec. 1989, in force since 1 July 1990 (AS 1990 802; BBl 1985 I 1369). See also the Final Provisions of Titles VIII and VIIIbis Art. 5 at the end of this Code.

A. Definition and scope of application

I. Definition

Art. 275

The usufructuary lease is a contract whereby the lessor undertakes to grant the lessee the use of a productive object or right and the benefit of its fruits or proceeds in exchange for rent.

II. Scope of application

1. Residential and commercial premises

Art. 276

The provisions governing usufructuary leases of residential and commercial premises also apply to objects made available together with such premises for the use and enjoyment of the tenant.

2. Agricultural lease

Art. 276a

1 Usufructuary leases relating to agricultural enterprises or to agricultural land and buildings are governed by the Federal Act of 4 October 1985 on Agricultural Leases, insofar as it contains special provisions. 2 In other respects the Code of Obligations applies with the exception of the provisions governing leases of residential and commercial premises.

Para. 1 — SR 221.213.2 Para. 2 — Amended by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, in force since 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221).

B. Inventory

Art. 277

Where machinery, livestock or supplies are included in the lease, each party must furnish the other with a precise, signed inventory and take part in a joint valuation thereof.

C. Obligations of the lessor

I. Hand-over of object

Art. 278

1 The lessor is required to make the object available on the agreed date in a condition fit for its designated use and operation. 2 If a report was drawn up on the return of the object at the end of the previous lease, on request the lessor must make this document available for inspection by the new lessee when the object is handed over to him. 3 Similarly, the new lessee has the right to be informed of the amount of rent paid under the previous lease.

II. Major repairs

Art. 279

The lessor is obliged to carry out major repairs to the object that become necessary during the lease at his own expense and as soon as the lessee has informed him of the need for such repairs.

III. Charges and taxes

Art. 280

The lessor bears all taxes and charges in connection with the object.

D. Obligations of the lessee

I. Payment of rent and accessory charges

1. In general

Art. 281

1 The lessee must pay the rent and, where applicable, the accessory charges at the end of each year of the lease but not later than when the lease expires, save where another payment date is stipulated by agreement or local custom. 2 Article 257a applies to accessory charges.

2. Lessee in arrears

Art. 282

1 Where, having accepted the property, the lessee is in arrears with payments of rent or accessory charges, the lessor may set a time limit of at least 60 days for payment and notify him that in the event of non-payment the lessor will terminate the lease on expiry of that time limit. 2 In the event of non-payment within the time limit the lessor may terminate the usufructuary lease with immediate effect or, for leases of residential and commercial premises, subject to at least 30 days’ notice ending on the last day of a calendar month.

II. Care, consideration and maintenance

1. Care and consideration

Art. 283

1 The lessee must use the leased object with due care in accordance with its intended use and in particular must ensure that its long-term productivity is sustained. 2 Where the usufructuary lease relates to immovable property, the tenant must show due consideration for others who share the building and for neighbours.

2. Normal maintenance

Art. 284

1 The lessee must carry out the normal maintenance of the leased object. 2 In accordance with local custom, he must carry out minor repairs and replace inexpensive equipment and tools which have become useless as a result of age or wear and tear.

3. Breach of duty by the lessee

Art. 285

1 If, despite written warning from the lessor, the lessee continues to act in breach of his duty of care, consideration or maintenance such that continuation of the usufructuary lease becomes unconscionable for the lessor or other persons sharing the building, the lessor may terminate the lease with immediate effect or, for leases of residential and commercial premises, subject to at least 30 days’ notice ending on the last day of a calendar month. 2 However, leases of residential and commercial premises may be terminated with immediate effect if the tenant intentionally causes serious damage to the property.

III. Duty of notification

Art. 286

1 If major repairs become necessary or a third party makes claims against the object of the usufructuary lease, the lessee must inform the lessor immediately. 2 Failure to notify renders the lessee liable for any damage incurred by the lessor as a result.

IV. Duty of tolerance

Art. 287

1 The lessee must tolerate major repairs intended to remedy defects in the object or to repair or prevent damage. 2 The lessee must permit the lessor to inspect the object to the extent required for maintenance, sale or future leasing. 3 The lessor must inform the lessee of works and inspections in good time and take all due account of the latter’s interests when they are carried out; the provisions on leases in Title 8 (Art. 259d and 259e) apply mutatis mutandis to all claims of the lessee for reduction of the rent and for damages.

E. Rights of the lessee on non-performance or defe

Art. 288

1 The provisions on leases in Title 8 (Art. 258 and 259a–259i) apply mutatis mutandis: a. where the lessor fails to hand over the property on the agreed date or hands it over in a defective condition; b. where defects arise in the object which are not attributable to the lessee and which he is not obliged to remedy at his own expense, or where he is prevented from using the object as contractually agreed. 2 Clauses to the contrary to the detriment of the lessee are void if they are set out: a. in previously formulated general terms and conditions; b. in usufructuary leases for residential or commercial premises.

F. Renovations and modifications

I. By the lessor

Art. 289

1 The lessor may renovate or modify the object only where conscionable for the lessee and the usufructuary lease has not been terminated. 2 In carrying out such works, the lessor must give due consideration to the lessee’s interests; the provisions on leases in Title 8 (Art. 259d and Art. 259e) apply mutatis mutandis to any claims of the lessee for reduction of the rent and for damages.

II. By the lessee

Art. 289a

1 The lessee requires the lessor’s written consent in order to: a. alter the manner in which the object has traditionally been managed in ways which will have lasting significance beyond the duration of the lease; b. carry out renovations or modifications to the object above and beyond the remit of normal maintenance. 2 Once such consent has been given, the lessor may require the restoration of the object to its previous condition only if this has been agreed in writing. 3 Where the lessor has not given his written consent to an alteration within the meaning of paragraph 1 let. a. and the lessee has failed to reverse such alteration within an appropriate time, the lessor may terminate the contract with immediate effect or, for leases of residential and commercial premises, subject to at least 30 days’ notice expiring on the last day of a calendar month.

G. Change of ownership

Art. 290

The provisions on leases in Title 8 (Art. 261–261b) apply mutatis mutandis: a. where the leased object is alienated; b. where limited rights in rem are established on the leased object; c. where the lease is entered under priority notice in the land register.

H. Sub-letting

Art. 291

1 The lessee may sub-let all or part of the leased object with the lessor’s consent. 2 The lessor may refuse his consent to the sub-letting of premises which form part of a leased property only if: a. the lessee refuses to inform him of the terms of the sub-lease; b. the terms and conditions of the sub-lease are unfair in comparison with those of the usufructuary lease; c. the sub-letting gives rise to major disadvantages for the lessor. 3 The lessee is liable to the lessor for ensuring that the sub-tenant or sub-lessee uses the object only in the manner permitted to the lessee himself. To this end the lessor may issue reminders directly to the sub-tenant or sub-lessee.

J. Transfer of usufructuary lease to a third party

Art. 292

Article 263 applies mutatis mutandis to the transfer of a usufructuary lease of commercial premises to a third party.

K. Early return of the object

Art. 293

1 Where the lessee returns the object without observing the notice period or the deadline for termination, he is released from his obligations towards the lessor only if he proposes a new lessee who is acceptable to the lessor, solvent and willing to take on the lease on the same terms and conditions. 2 Otherwise, the lessee must continue to pay the rent until such time as the lease ends or may be terminated under the contract or by law. 3 Against the rent owing to him the lessor must permit the following to be brought into account: a. any expenses he has saved, and b. any earnings which he has obtained, or intentionally failed to obtain, from putting the object to some other use.

L. Set-off

Art. 294

Article 265 applies mutatis mutandis to the set-off of claims arising from a usufructuary lease.

M. End of usufructuary lease

I. Expiry of agreed duration

Art. 295

1 Where the parties have expressly or tacitly agreed to a limited duration, the usufructuary lease comes to an end on expiry thereof without any need for notice to be given. 2 If the usufructuary lease is tacitly continued, it is deemed to have been extended on the same terms and conditions for a further year unless otherwise agreed. 3 A party may terminate the extended usufructuary lease by giving the legally prescribed period of notice expiring at the end of a lease year.

II. Notice of termination and termination dates

Art. 296

1 The parties may terminate an open-ended usufructuary lease by giving six months’ notice expiring on any date of their choosing unless otherwise stipulated by agreement or local custom and unless the nature of the leased object implies that the parties intended otherwise. 2 The parties may terminate an open-ended usufructuary lease of residential or commercial premises by giving at least six months’ notice expiring on a date fixed by local custom or, absent in the absence of such custom, at the end of a three-month lease period. The parties may agree a longer notice period or another termination date. 3 Where the prescribed notice period or termination date is not observed, termination will be effective as of the next termination date.

III. Extraordinary notice

1. Good cause

Art. 297

1 Where performance of the contract becomes unconscionable for the parties for good cause, they may terminate the usufructuary lease by giving the legally prescribed notice expiring at any time. 2 The court determines the financial consequences of early termination, taking due account of all the circumstances.

2. Bankruptcy of the lessee

Art. 297a

1 Where the lessee becomes bankrupt after taking possession of the property, the lease ends on commencement of bankruptcy proceedings. 2 However, where the lessor has received sufficient security for the current year’s rent and the inventory, he must continue the lease until the end of the lease year.

3. Death of the lessee

Art. 297b

In the event of the death of the lessee, his heirs and the lessor may terminate the contract by giving the legally prescribed notice expiring on the next admissible termination date.

IV. Required form of notice for residential and co

Art. 298

1 Notice to terminate usufructuary leases of residential or commercial premises must be given in writing. 2 The lessor must give notice of termination using a form approved by the canton which informs the lessee how he must proceed if he wishes to contest the termination or apply for an extension of the lease. 3 Notice to terminate is void if it does not fulfil the above requirements.

N. Return of the object

I. In general

Art. 299

1 At the end of the usufructuary lease, the lessee must return the object together with all items listed in the inventory in the condition they are in at that time. 2 He is entitled to compensation for improvements which result: a. from endeavours exceeding the normal degree of diligence due in managing the object; b. for renovations or modifications to which the lessor gave his written consent. 3 He must compensate the lessor for any deterioration that could have been prevented by diligent management of the object. 4 Any agreement whereby the lessee undertakes to pay compensation on termination of the lease is void except insofar as such compensation relates to possible damage.

II. Inspection of object and notification of lesse

Art. 299a

1 When the object is returned, the lessor must inspect its condition and immediately inform the lessee of any defects for which he is answerable. 2 If the lessor fails to do so, he forfeits his claims save in respect of defects not detectable on customary inspection. 3 Where the lessor discovers such defects subsequently, he must inform the lessee immediately.

III. Replacement of inventory items

Art. 299b

1 Where items listed in the inventory were valued when the object was originally handed over to the lessee, he must return an inventory of items of the same type and estimated value or pay compensation for any reduction in value. 2 The lessee is not obliged to pay compensation for missing items if he can prove that they were lost through the fault of the lessor or force majeure. 3 The lessee is entitled to compensation for added value resulting from his outlays and his labour.

O. Lessor’s lien

Art. 299c

The lessor of commercial premises has the same right of lien in respect of the rent for the past year and the current year of a usufructuary lease as the landlord under the provisions governing leases and rental agreements (Art. 268 et seq.).

P. Protection against termination of usufructuary

Art. 300

1 The provisions on leases in Title 8 (Art. 271–273c) apply mutatis mutandis to protection against termination of usufructuary leases of residential or commercial premises. 2 The provisions governing the family residence (Art. 273a) are not applicable.

Q. Procedure

Art. 301

The procedure is governed by the CPO.

Art. 301 — Amended by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, in force since 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221). SR 272

R. Livestock lease

I. Rights and obligations of the tenant farmer

Art. 302

1 In respect of a lease of livestock which is not part of an agricultural tenancy, all benefits arising from leased livestock belong to the tenant farmer unless otherwise provided by agreement or local custom. 2 The tenant farmer feeds and cares for the livestock and pays rent to the lessor in the form of either money or a share in the benefits in kind.

II. Liability

Art. 303

1 Unless otherwise provided by agreement or local custom, the tenant farmer is liable for damage to the leased livestock unless he can prove that such damage could not have been avoided even with all due care and attention. 2 The tenant farmer is entitled to have any extraordinary costs of caring for the livestock reimbursed by the lessor unless the tenant farmer was at fault in incurring such costs. 3 The tenant farmer must inform the lessor as soon as possible of serious accidents or illness.

III. Termination

Art. 304

1 Where the lease is open-ended, either party may terminate it as of any date of their choosing, unless otherwise provided by agreement or local custom. 2 However, such termination must take place in good faith and not at an inopportune juncture.

Title Nine: The Loan

Section One: The Loan for Use

A. Definition

Art. 305

A loan for use is a contract whereby the lender undertakes to make an object available free of charge to the borrower for the latter’s use and the borrower undertakes to return it to him after having made use of it.

B. Effect

I. Borrower’s right of use

Art. 306

1 The borrower may make use of the loaned object only for the purpose stipulated in the contract or, in the absence of any stipulation, for its normal purpose or the purpose dictated by its nature. 2 He is not entitled to grant use of the object to a third party. 3 A borrower acting in breach of these provisions is liable even for accidental damage unless he can prove that the object would have been affected in any event.

II. Maintenance costs

Art. 307

1 The borrower bears the ordinary costs of maintenance and, in the case of loaned animals, in particular the costs of feeding them. 2 He is entitled to reimbursement of extraordinary expenses he has been obliged to incur for the lender’s benefit.

III. Liability of joint borrowers

Art. 308

Persons who have jointly borrowed a single object are jointly and severally liable for it.

C. Termination

I. Loan for designated use

Art. 309

1 Where the loan for use is open-ended, it ends as soon as the borrower has made use of the object as agreed or on expiry of the period in which such use could have been made of it. 2 The lender is entitled to reclaim the object before that time if the borrower uses it for a purpose contrary to the agreement, if he damages it, if he permits a third party to use it or if unforeseen developments occur which leave the lender in urgent need of the object.

II. Loan for non-designated use

Art. 310

Where the contract stipulates neither the purpose nor the duration of the loan, the lender may reclaim the loaned object whenever he sees fit.

III. Death of the borrower

Art. 311

The loan for use ends on the death of the borrower.

Section Two: The Fixed-Term Loan

A. Definition

Art. 312

A fixed-term loan is a contract whereby the lender undertakes to transfer the ownership of a sum of money or of other fungible goods to the borrower, who in return undertakes to return objects of the same quantity and quality to him.

B. Effect

I. Interest

1. Liability for interest

Art. 313

1 In normal dealings, interest is payable on a fixed-term loan only where this has specifically been agreed. 2 In commercial transactions, interest is payable on fixed-term loans even where this has not been expressly agreed.

2. Rules governing interest

Art. 314

1 Where the interest rate is not stipulated in the contract, it is presumed to be the customary rate for loans of the same type at the time and place that the fixed-term loan was received. 2 Unless otherwise agreed, the promised interest is payable annually. 3 Any prior agreement that interest will be added to the loan principal and become subject to further interest is void, subject to standard business practices and in particular those of savings banks for calculating interest on current accounts and similar commercial instruments under which the calculation of compound interest is customary.

II. Prescriptive period for claims for delivery an

Art. 315

The borrower’s claim for delivery and the lender’s claim for acceptance of the fixed-term loan prescribe six months after the date on which the other party defaults.

III. Insolvency of the borrower

Art. 316

1 The lender may refuse to hand over the fixed-term loan if the borrower becomes insolvent after entering into the contract. 2 The lender has the right to refuse delivery even if insolvency occurred before the contract was concluded but he only subsequently became aware of it.

C. Goods in lieu of money

Art. 317

1 Where the borrower receives securities or goods rather than the agreed sum of money, the amount of the fixed-term loan is deemed to be the current or market price of the securities or goods concerned at the time and place of delivery. 2 Any agreement to the contrary is void.

D. Timing of repayment

Art. 318

Where a fixed-term loan contract does not stipulate the repayment date or the period of notice to terminate the contract or the expiry of the contract at any time on first request, the borrower must repay the loan within six weeks of the first request by the lender.

Title Ten: The Employment Contract

Amended by No I of the FA of 25 June 1971, in force since 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Transitional and Final Provisions of Title X Art. 7 at the end of this Code.

Section One: The Individual Employment Contract

A. Definition and conclusion

I. Definition

Art. 319

1 By means of an individual employment contract, the employee undertakes to work in the service of the employer for a limited or unlimited period and the employer undertakes to pay him a salary based on the amount of time he works (time wage) or the tasks he performs (piece work). 2 A contract whereby an employee undertakes to work regularly in the employer’s service by hours, half-days or days (part-time work) is likewise deemed to be an individual employment contract.

II. Creation

Art. 320

1 Except where the law provides otherwise, the individual employment contract is not subject to any specific formal requirement. 2 It is deemed to have been concluded where the employer accepts the performance of work over a certain period in his service which in the circumstances could reasonably be expected only in exchange for salary. 3 Where an employee performs work in good faith for the employer under a contract which is subsequently found to be invalid, both parties must discharge their obligations under the employment relationship as if the contract had been valid until such time as one party terminates the relationship on grounds of the invalidity of the contract.

B. Obligations of the employee

I. Duty to work in person

Art. 321

The employee must carry out the contractually assumed tasks in person, unless otherwise required by agreement or the circumstances.

II. Duty of care and loyalty

Art. 321a

1 The employee must carry out the work assigned to him with due care and loyally safeguard the employer’s legitimate interests. 2 He must use the employer’s machinery, work tools, technical equipment, installations and vehicles in the appropriate manner and treat them and all materials placed at his disposal for the performance of his work with due care. 3 For the duration of the employment relationship the employee must not perform any paid work for third parties in breach of his duty of loyalty, in particular if such work is in competition with his employer. 4 For the duration of the employment relationship the employee must not exploit or reveal confidential information obtained while in the employer’s service, such as manufacturing or trade secrets; he remains bound by such duty of confidentiality even after the end of the employment relationship to the extent required to safeguard the employer’s legitimate interests.

III. Disclosure and hand-over of benefits received

Art. 321b

1 The employee is accountable to his employer for everything, and in particular sums of money, he receives from third parties in the performance of his contractual activities and must hand it over to the employer immediately. 2 He must likewise immediately hand over to the employer all work produced in the course of his contractual activities.

IV. Overtime

Art. 321c

1 If more hours of work are required than envisaged under the employment contract or provided for by custom, standard employment contract or collective employment contract, the employee is obliged to perform such overtime to the extent that he is able and may conscionably be expected to do so. 2 In consultation with the employee, the employer may compensate him within an appropriate period for the overtime worked by granting him time off in lieu of at least equal length. 3 Where the overtime is not compensated by time off in lieu and unless otherwise agreed in writing or under a standard employment contract or collective employment contract, the employer must compensate the employee for the overtime worked by paying him his normal salary and a supplement of at least one-quarter thereof.

V. Compliance with general directives and instruct

Art. 321d

1 The employer is entitled to issue general directives and specific instructions regarding the performance of the work and the conduct of employees in his business or household. 2 The employee must comply in good faith with the employer’s general directives and specific instructions.

VI. Employee’s liability

Art. 321e

1 The employee is liable for any damage he causes to the employer whether wilfully or by negligence. 2 The extent of the duty of care owed by the employee is determined by the individual employment contract, taking due account of the occupational risk, level of training and technical knowledge associated with the work as well as the employee’s aptitudes and skills of which the employer was or should have been aware.

C. Obligations of the employer

I. Salary

1. Type and amount in general

Art. 322

1 The employer must pay the agreed or customary salary or the salary that is fixed by standard employment contract or collective employment contract. 2 Where the employee lives in the employer’s household, his board and lodgings are part of the salary unless agreement or custom provide otherwise.

2. Share in the business results

Art. 322a

1 Where the employee is by contract entitled to a share in the profits, the turnover or the results of the business expressed in some other manner, such share is calculated on the basis of the results for the financial year as defined by statutory provision and generally recognised commercial principles. 2 The employer must furnish all the necessary information to the employee or, in his stead, to an expert designated by both employer and employee or appointed by the court and must grant the employee or the expert such access to the accounts as is required for verification of the business results. 3 In addition, where a share in the profits of the business has been agreed, a copy of the profit and loss account must be made available to the employee on request.

Para. 3 — Amended by No I 3 of the FA of 23 Dec. 2011 (Financial Reporting Law), in force since 1 Jan. 2013 (AS 2012 6679; BBl 2008 1589).

3. Commission

a. Entitlement

Art. 322b

1 Where the employee is by contract entitled to commission on particular transactions, his entitlement is established as soon as the transaction with the third party enters into force. 2 In the case of transactions involving performance in instalments and insurance policies, it may be agreed in writing that such entitlement arises as each instalment falls due or is performed. 3 The entitlement to commission lapses subsequently if through no fault of his the employer fails to carry out the transaction or the third party fails to fulfil his obligations; in the event of only partial performance, the commission is reduced proportionately.

b. Statement

Art. 322c

1 Where the terms of the contract do not require the employee to draw up a statement of commission due to him, on each date on which commission falls due, the employer must provide him with a written statement including a breakdown of the transactions on which it is payable. 2 The employer must furnish all the necessary information to the employee or, in his stead, to an expert designated by both employer and employee or appointed by the court, and must grant the employee or the expert such access to the books of account or supporting documents as is required for verification of the commission statement.

4. Bonuses

Art. 322d

1 Where the employer pays a bonus over and above the salary on particular occasions, such as at Christmas or the end of the financial year, the employee is entitled to such bonus where it is contractually stipulated. 2 If the employment relationship ends prior to the occasion on which the bonus is paid, the employee is entitled to a pro rata bonus where the contract so provides.

II. Payment of salary

1. Payment terms and periods

Art. 323

1 Unless shorter periods or other payment terms have been agreed or are customary and unless otherwise provided by standard employment contract or collective employment contract, the salary is paid to the employee at the end of each month. 2 Unless a shorter payment period has been agreed or is customary, commission is paid at the end of each month; however, where execution of a transaction takes more than half a year, the due date of the commission payable on it may be deferred by written agreement. 3 Shares in business results are payable as soon as the results are determined, but not later than six months after the end of the financial year. 4 If an employee is in hardship and requests an advance against salary due for work already performed, the employer must advance such sum as may reasonably be expected of him.

2. Withholding of salary

Art. 323a

1 To the extent provided for by individual agreement, custom, standard employment contract or collective employment contract, the employer may withhold part of the salary. 2 The amount withheld on any given payment date must not exceed one-tenth of the salary due and the cumulative amount withheld must not exceed the salary due for one week’s work; however, a higher amount may be withheld under the terms of a standard employment contract or collective employment contract. 3 Unless otherwise provided by individual agreement, custom, standard employment contract or collective employment contract, the salary withheld is deemed to be security for the employer’s claims arising from the employment relationship rather than a contractual penalty.

3. Salary protection

Art. 323b

1 Unless otherwise provided by agreement or custom, the salary must be paid to the employee in legal tender during working hours; a written salary statement must be provided to the employee. 2 Where the employer holds claims against the employee, he may set them off against the employee’s salary claim only to the extent that such salary claim is subject to attachment, although claims for compensation of intentional damage may be set off without restriction. 3 Any agreement whereby the salary must be used for the employer’s benefit is void.

III. Salary in the event work is not possible

1. Failure by employer to accept performance

Art. 324

1 Where the employer is at fault in preventing performance of the work or fails to accept its performance for other reasons, he remains obliged to pay the salary but the employee is not obliged to make up the time thus lost. 2 The salary payable in this event is reduced by any amounts that the employee saved as a result of being prevented from working or that he earned by performing other work or would have earned had he not intentionally foregone such work.

2. Employee prevented from working

a. General principle

Art. 324a

1 Where the employee is prevented from working by personal circumstances for which he is not at fault, such as illness, accident, legal obligations or public duties, the employer must pay him his salary for a limited time, including fair compensation for lost benefits in kind, provided the employment relationship has lasted or was concluded for longer than three months. 2 Subject to longer periods being fixed by individual agreement, standard employment contract or collective employment contract, the employer must pay three weeks’ salary during the first year of service and thereafter the salary for appropriately longer periods depending on the duration of the employment relationship and the particular circumstances. 3 The employer has the same obligation in the event that an employee becomes pregnant. 4 A written agreement, standard employment contract or collective employment contract may derogate from the above provisions provided it gives the employee terms of at least equivalent b

Para. 3 — Amended by Annex No 1 to the FA of 3 Oct. 2003, in force since 1 July 2005 (AS 2005 1429; BBl 2002 7522, 2003 1112 2923).

b. Exceptions

Art. 324b

1 If the employee has compulsory insurance prescribed by law against the financial consequences of being prevented from working by personal circumstances for which he is not at fault, the employer is not obliged to pay his salary where the insurance benefits for that limited period cover at least four-fifths of the salary income lost over that period. 2 Where the insurance benefits are less, the employer must pay the difference between them and four-fifths of the salary. 3 Where the insurance benefits are paid only after a waiting period, the employer must pay at least four-fifths of the salary during that period.

Para. 3 — Inserted by Annex No 12 to the FA of 20 March 1981 on Accident Insurance, in force since 1 Jan. 1984 (AS 1982 1676 1724 Art. 1 para. 1; BBl 1976 III 141).

IV. Assignment and pledge of salary claims

Art. 325

1 The employee may assign or pledge his future salary claims as security for maintenance or support obligations under family law only to the extent that such claims are subject to attachment; at the request of an interested party the debt collection office at the employee’s domicile determines the amount that is not subject to attachment in accordance with Article 93 of the Federal Act of 11 April 1889 on Debt Collection and Bankruptcy. 2 Any assignment or pledge of future salary claims as security for other obligations is void.

Art. 325 — Amended by No I of the FA of 14 Dec. 1990, in force since 1 July 1991 (AS 1991 974; BBl 1989 III 1233, 1990 I 120). Para. 1 — SR 281.1

V. Piece work

1. Work allocation

Art. 326

1 Where by contract the employee carries out piece work for a single employer, the latter must allocate a sufficient quantity of work to him. 2 The employer may allocate time work to the employee where through no fault of his own the employer is unable to allocate piece work as contractually agreed or where time work is temporarily required for operational reasons. 3 If the rate of pay for such time work is not fixed by individual agreement, standard employment contract or collective employment contract, the employer must pay the employee the average salary he previously earned on a piece work basis. 4 An employer who is unable to allocate sufficient piece work or time work remains nonetheless obliged pursuant to the provisions governing failure to accept performance to pay the salary that he would have paid for time work.

2. Piece work rates

Art. 326a

1 Where by contract the employee carries out piece work, the employer must inform him of the applicable rate of pay before the start of each task. 2 Should the employer fail to give such information, he must pay the going rate for identical or comparable work.

VI. Work tools, materials and expenses

1. Work tools and materials

Art. 327

1 Unless otherwise provided by agreement or custom, the employer provides the employee with the tools and materials that the work requires. 2 Where the employee himself supplies such tools or materials with the employer’s consent, he is entitled to appropriate compensation unless otherwise provided by agreement or custom.

2. Expenses

a. In general

Art. 327a

1 The employer must reimburse the employee for all expenses necessarily incurred in the performance of the work and, in the case of work done off the employer’s premises, for his necessary living expenses. 2 An individual agreement, standard employment contract or collective employment contract may provide that such expenses be reimbursed in the form of a fixed sum, such as a per diem or a weekly or monthly allowance, provided that this covers all necessary expenses. 3 Any agreement whereby the employee must bear all or part of such necessary expenses is void.

b. Motor vehicle

Art. 327b

1 Where with the employer’s consent the employee uses his own motor vehicle or a vehicle supplied by the employer for business purposes, he is entitled to reimbursement of the normal running and maintenance costs incurred in the performance of his work. 2 Where with the employer’s consent the employee uses his own motor vehicle for work purposes, the employee is also entitled to reimbursement of the tax on the vehicle and the premiums for third-party liability insurance as well as appropriate compensation for wear and tear, to the extent that the vehicle is used for business purposes. 3 ...

Para. 3 — Repealed by No 12 of the Annex to the FA of 20 March 1981 on Accident Insurance, with effect from 1 Jan. 1984 (AS 1982 1676 1724 Art. 1 para. 1; BBl 1976 III 141).

c. Payment dates

Art. 327c

1 Expenses are reimbursed when the salary is paid based on the statement of expenses submitted by the employee, unless a shorter period has been agreed or is customary. 2 Where an employee regularly incurs expenses in the performance of his contractual obligations, the employer must pay him an advance against such expenses at regular intervals but not less frequently than every month.

VII. Protection of the employee’s personality righ

1. In general

Art. 328

1 Within the employment relationship, the employer must acknowledge and safeguard the employee’s personality rights, have due regard for his health and ensure that proper moral standards are maintained. In particular, he must ensure that employees are not sexually harassed and that any victim of sexual harassment suffers no further adverse consequences. 2 In order to safeguard the personal safety, health and integrity of his employees he must take all measures that are shown by experience to be necessary, that are feasible using the latest technology and that are appropriate to the particular circumstances of the workplace or the household, provided such measures may reasonably be expected of him in the light of each specific employment relationship and the nature of the work.

Para. 1 — Sentence inserted by Annex No 3 to the FA of 24 March 1995 on Gender Equality, in force since 1 July 1996 (AS 1996 1498; BBl 1993 I 1248). Para. 2 — Revised by the Federal Assembly Drafting Committee (Art. 33 ParlPA; AS 1974 1051). Para. 2 — Amended by Annex No 3 to the FA of 24 March 1995 on Gender Equality, in force since 1 July 1996 (AS 1996 1498; BBl 1993 I 1248).

2. Shared household

Art. 328a

1 Where the employee lives in the employer’s household, the employer must provide adequate board and appropriate lodgings. 2 If the employee is prevented from working through no fault of his own by sickness or accident, the employer must provide care and medical assistance for a limited period, this being three weeks within the first year of service and thereafter for appropriately longer periods depending on the duration of the employment relationship and the particular circumstances. 3 The employer has the same obligations in the event that an employee is pregnant or gives birth.

3. When handling personal data

Art. 328b

The employer may handle data concerning the employee only to the extent that such data concern the employee’s suitability for his job or are necessary for the performance of the employment contract. In all other respects, the provisions of the Data Protection Act of 25 September 2020 apply.

Art. 328b — Inserted by Annex No 2 to the FA of 19 June 1992 on Data Protection, in force since 1 July 1993 (AS 1993 1945; BBl 1988 II 413). SR 235.1 Second sentence amended by Annex 1 No II 18 of the Data Protection Act of 25 Sept. 2020, in force since 1 Sept. 2023 (AS 2022 491; BBl 2017 6941).

VIII. Days off work, holidays, and leave

1. Days off work

Amended by No II 1 of the FA of 20 Dec. 2019 on Improving the Compatibility of Work and Caring for Family Members, in force since 1 July 2021 (AS 2020 4525; BBl 2019 4103).

Art. 329

1 The employer must allow the employee one day off per week, generally Sunday or, where circumstances do not permit this, a full weekday instead. 2 In special circumstances, he may allow the employee several days off together or two half-days instead of one full day, provided the employee consents to this. 3 In addition, he must allow the employee the customary hours and days off work and, once notice has been given to terminate the employment relationship, the time required to seek other employment. 4 When determining time off work, due account is to be taken of the interests of both employer and employee.

2. Holidays

a. Annual entitlement

Art. 329a

1 The employer must allow the employee during each year of service at least four weeks’ holiday and five weeks’ holiday for employees under the age of 20. 2 ... 3 Where an employee has not yet completed one year’s service, his holiday entitlement is fixed pro rata.

Para. 1 — Amended by No I of the FA of 16 Dec. 1983, in force since 1 July 1984 (AS 1984 580; BBl 1982 III 201). Para. 2 — Repealed by No I of the FA of 16 Dec. 1983, with effect from 1 July 1984 (AS 1984 580; BBl 1982 III 201).

b. Reduction

Art. 329b

1 Where in a given year of service the employee through his own fault is prevented from working for more than a month in total, the employer may reduce his holiday entitlement by one-twelfth for each full month of absence. 2 Where the total absence does not exceed one month in a given year of service and is the result of personal circumstances for which the employee is not at fault, such as illness, accident, legal obligations, public duties or leave for youth work, the employer is not entitled to reduce his holiday entitlement. 3 The employer may not reduce the holiday entitlement of: a. a female employee who is prevented from working by pregnancy for up to two months; b. a female employee who has taken maternity leave in accordance with Article 329f; c. an employee who has taken parental leave in accordance with Article 329g or leave in the event of the mother’s death in accordance with Article 329gbis; d. an employee who has taken carer’s leave in accordance with Article 329i, e. an

Para. 1 — Amended by Art. 117 of the FA of 25 June 1982 on Unemployment Insurance, in force since 1 Jan. 1984 (AS 1982 2184, 1983 1204; BBl 1980 III 489). Para. 2 — Amended by Art. 13 of the FA of 6 Oct. 1989 on Youth Work, in force since 1 Jan. 1991 (AS 1990 2007; BBl 1988 I 825). Para. 3 let. c — Amended by Annex No 1 of the FA of 17 March 2023 (Daily Allowance for the Surviving Parent), in force since 1 Jan. 2024 (AS 2023 680; BBl 2022 2515, 2742). Para. 3 let. e — Inserted by Annex No 1 of t

c. Consecutive weeks, timing

Art. 329c

1 The holiday entitlement for a given year of service is generally granted during that year; at least two weeks of holiday must be taken consecutively. 2 The employer determines the timing of holidays taking due account of the employee’s wishes to the extent these are compatible with the interests of the business or household.

Para. 1 — Amended by No I of the FA of 16 Dec. 1983, in force since 1 July 1984 (AS 1984 580; BBl 1982 III 201).

d. Salary

Art. 329d

1 The employer must pay the employee the full salary due for the holiday entitlement and fair compensation for any lost benefits in kind. 2 During the employment relationship, the holiday entitlement may not be replaced by monetary payments or other benefits. 3 If while on holiday, the employee carries out paid work for a third party which harms the employer’s legitimate interests, the employer may refuse to pay the salary due for the holidays concerned and may reclaim any salary already paid.

3. Leave for extracurricular youth work

Art. 329e

1 During each year of service the employer must grant employees under the age of 30 leave of up to one working week for the purpose of carrying out unpaid leadership, care or advisory activities in connection with extracurricular youth work for cultural or social organisations and for related initial and ongoing training. 2 The employee has no salary entitlement during such leave for youth work. An individual agreement, standard employment contract or collective employment contract may provide otherwise to the employee’s benefit. 3 The employer and employee should agree on the timing and duration of leave for youth work, having due regard for each other’s interests. Where they cannot reach agreement, such leave must be granted on condition that the employee gives two months’ advance notice of his intention to exercise his right. Any leave for youth work not taken by the end of the calendar year is forfeited. 4 At the employer’s request, the employee must furnish proof of the activities

Art. 329e — Inserted by Art. 13 of the FA of 6 Oct. 1989 on Youth Work, in force since 1 Jan. 1991 (AS 1990 2007; BBl 1988 I 825).

4. Maternity leave

Art. 329f

1 After having given birth, a female employee is entitled to maternity leave of at least 14 weeks. 2 In the event of the hospitalisation of the new-born child, the maternity leave shall be extended by the extended period of payment the maternity allowance. 3 In the event of the death of the other parent during the six months following the birth of the child, a female employee is entitled to two additional weeks of leave; she may take this leave in full weeks or on a day-to-day basis within a period of six months from the day after the death.

Art. 329f — Inserted by Annex No 1 to the FA of 3 Oct. 2003, in force since 1 July 2005 (AS 2005 1429; BBl 2002 7522, 2003 1112 2923). Para. 2 — Inserted by No II of the FA of 18 Dec. 2020, in force since 1 July 2021 (AS 2021 288; BBl 2019 141). Para. 3 — Inserted by Annex No 1 of the FA of 17 March 2023 (Daily Allowance for the Surviving Parent), in force since 1 Jan. 2024 (AS 2023 680; BBl 2022 2515, 2742).

5. Parental leave

a. General

Art. 329g

1 The following persons are entitled to parental leave of two weeks: a. an employee who is legally the father at the time of the birth of a child or who becomes the legal father within the following six months; b. a female employee who is legally the other parent at the time of the birth of the child. 2 Parental leave must be taken within six months of the birth of the child. This period is suspended during leave in accordance with Article 329gbis. 3 The leave may be taken in full weeks or on a day-to-day basis.

Art. 329g — Inserted by No II 1 of the FA of 20 Dec. 2019 on Improving the Compatibility of Employment and Caring for Family Members (AS 2020 4525; BBl 2019 4103). Amended by Annex No 1 of the FA of 17 March 2023 (Daily Allowance for the Surviving Parent), in force since 1 Jan. 2024 (AS 2023 680; BBl 2022 2515, 2742).

b. In the event of the mother’s death

Art. 329gbis

1 If the mother dies on the day of the birth or during the 14 weeks thereafter, the other parent is entitled to leave of 14 weeks; this leave must be taken on consecutive days from the date of the death. 2 The other parent is entitled to the leave if the relationship with the child is established on the date of death or during the 14 weeks thereafter. 3 In the event of the hospitalisation of the new-born child in accordance with Article 329f paragraph 2, leave in accordance with paragraph 1 shall be extended by the duration of the hospitalisation, up to a maximum of eight weeks.

Art. 329gbis — Inserted by Annex No 1 of the FA of 17 March 2023 (Daily Allowance for the Surviving Parent), in force since 1 Jan. 2024 (AS 2023 680; BBl 2022 2515, 2742).

6. Leave to care for family members

Art. 329h

An employee is entitled to paid leave for the time he or she spends caring for a family member or life partner with health problems; however, the leave is limited to no more than three days per event and no more than ten days per year.

Art. 329h — Inserted by No II 1 of the FA of 20 Dec. 2019 on Improving the Compatibility of Employment and Caring for Family Members, in force since 1 Jan. 2021 (AS 2020 4525; BBl 2019 4103).

7. Leave to care for a child whose health is serio

Art. 329i

1 If an employee is entitled to carer’s allowance under Articles 16n–16s of the Loss of Earning Compensation Act (LECA) of 25 September 1952 because his or her child’s health has been seriously impaired by illness or accident, he or she is entitled to carer’s leave of a maximum of 14 weeks. 2 The carer’s leave must be taken within a period of 18 months. The period begins on the day for which the first daily allowance is claimed. 3 If both parents are in employment, each parent is entitled to carer’s leave of a maximum of seven weeks. They may choose to apportion the leave in a different way. 4 The leave may be taken in one stretch or on a day-to-day basis. 5 The employer must be informed immediately about the arrangements made for taking the leave and about any changes to these arrangements.

Art. 329i — Inserted by No II 1 of the FA of 20 Dec. 2019 on Improving the Compatibility of Work and Caring for Family Members, in force since 1 July 2021 (AS 2020 4525; BBl 2019 4103). Para. 1 — SR 834.1

8. Adoption leave

Art. 329j

1 If an employee adopts a child, he or she shall be entitled to adoption leave of two weeks provided the requirements of Article 16t LECA are met. 2 The adoption leave must be taken within one year of adopting the child. 3 It may be taken by one parent or shared between both parents. Both parents may not take their share of leave at the same time. 4 It may be taken in full weeks or on a day-to-day basis.

Art. 329j — Inserted by Annex No 1 of the FA of 1 Oct. 2021, in force since 1 Jan. 2023 (AS 2022 468; BBl 2019 7095, 7303). Para. 1 — SR 834.1

IX. Other duties

1. Security

Art. 330

1 Where the employee furnishes security for performance of his obligations under the employment contract, the employer must keep it separate from his own assets and guarantee its safekeeping. 2 The employer returns such security at the latest at the end of the employment relationship unless the date of its return has been deferred by written agreement. 3 Where the employer asserts claims arising from the employment relationship and these are contested, he may retain the security until they are resolved but must at the employee’s request deposit any retained security with the court. 4 In the event of the employer’s bankruptcy, the employee may demand the return of the security kept separate from the employer’s own assets, subject to any claims of the latter arising from the employment relationship.

2. Reference

Art. 330a

1 The employee may at any time request from the employer a reference concerning the nature and the duration of the employment relationship, the quality of his work and his conduct. 2 At the employee’s express request the reference must be limited to the nature and duration of the employment relationship.

3. Duty of information

Art. 330b

1 Where the employment contract has been concluded for an indefinite duration or for longer than one month, within one month of the beginning of the employment relationship, the employer must inform the employee in writing of: a. the names of the contracting parties; b. the date of the beginning of the employment relationship; c. the employee’s function; d. the salary and any additional benefits; e. the length of the working week. 2 In the event of changes to the contractual elements that are subject to the duty of information pursuant to paragraph 1 during the employment relationship, the employee must be informed of such changes in writing within one month of their entry into force.

Art. 330b — Inserted by Art. 2 No 2 of the FA of 17 Dec. 2004 approving and implementing the Protocol relating to the extension of the Agreement between the European Community and its Member States, of the one part, and the Swiss Confederation, of the other, on the free movement of persons to new EU member states and approving the revision of the accompanying measures on the free movement of persons, in force since 1 April 2006 (AS 2006 979; BBl 2004 5891 6565).

D. Employee benefits provision

I. Obligations of the employer

Amended by Annex No 2 of the Vested Benefits Act of 17 Dec. 1993, in force since 1 Jan. 1995 (AS 1994 2386; BBl 1992 III 533).

Art. 331

1 Where the employer contributes to a employee benefits scheme or the employees make their own contributions, the employer must transfer these contributions to a foundation, a cooperative or a public law institution. 2 Where the employer’s contributions and any made by the employee are used to take out health insurance, personal accident insurance, life assurance, disability insurance or whole life assurance in favour of the employee with a regulated insurance company or a recognised health insurance fund, the employer is not obliged to transfer the contributions as stipulated in the previous paragraph if an independent claim against the insurer would accrue to the employee on the occurrence of the event insured against. 3 Where the employee is obliged to make contributions to a benefits scheme, the employer must simultaneously contribute an amount at least equal to the total contributions of all his employees; he must finance his contributions from his own funds or from contribution r

Para. 1 — Term in accordance with Annex No 2 of the Vested Benefits Act of 17 Dec. 1993, in force since 1 Jan. 1995 (AS 1994 2386; BBl 1992 III 533). Para. 3 — Amended by Annex No 2 to the FA of 3 Oct. 2003 (OPA Revision I), in force since 1 Jan. 2005 (AS 2004 1677 1700; BBl 2000 2637). Para. 4 — Amended by Annex No 2 to the FA of 17 Dec. 1993 on the Vesting of Occupational Old Age, Survivors' and Invalidity Benefits, in force since 1 Jan. 1995 (AS 1994 2386; BBl 1992 III 533). Para. 5 — Inserte

II. Beginning and end of insurance cover

Art. 331a

1 Benefits cover commences on the date on which the employment relationship begins and ends on the date on which the employee leaves the benefits scheme. 2 However, he continues to enjoy life assurance and invalidity cover until he joins a new occupational benefits scheme, subject to a maximum period of one month. 3 The benefits scheme may require the insured to pay premiums for pension insurance maintained after the end of the occupational benefits

Art. 331a — Amended by Annex No 2 to the FA of 17 Dec. 1993 on the Vesting of Occupational Old Age, Survivors' and Invalidity Benefits, in force since 1 Jan. 1995 (AS 1994 2386; BBl 1992 III 533).

III. Assignment and pledge

Art. 331b

Claims for future benefits may not be validly assigned or pledged before they fall due.

Art. 331b — Amended by Annex No 2 to the FA of 17 Dec. 1993 on the Vesting of Occupational Old Age, Survivors' and Invalidity Benefits, in force since 1 Jan. 1995 (AS 1994 2386; BBl 1992 III 533).

IV. Reservations on medical grounds

Art. 331c

Occupational benefits schemes may make reservations on medical grounds in relation to invalidity and life policies. Such reservations may be made for a maximum of five years.

Art. 331c — Amended by Annex No 2 to the FA of 17 Dec. 1993 on the Vesting of Occupational Old Age, Survivors' and Invalidity Benefits, in force since 1 Jan. 1995 (AS 1994 2386; BBl 1992 III 533).

V. Promotion of home ownership

1. Pledge

Art. 331d

1 At any time up to three years before becoming entitled to draw retirement benefits, the employee may pledge his entitlement to occupational benefits or an amount up to the limit of his transferable benefits for the purpose of acquiring a property for his own personal use. 2 The pledge is also permitted for the purpose of acquiring shares in a housing cooperative or similar participatory venture provided a residential unit jointly financed in this manner is for the employee’s own personal use. 3 The pledge is valid only if notified in writing to the benefits scheme. 4 The amount pledged by employees aged 50 or older must not exceed the transferable benefit entitlement they would have had at 50 or one-half of their transferable benefit entitlement at the time the pledge is given. 5 Married employees may pledge benefits only with the written consent of their spouse. Where the employee cannot obtain such consent or if it is withheld, the employee may apply to the civil courts. The same a

Art. 331d — Inserted by No II of the FA of 17 Dec. 1993 on the Promotion of Home Ownership using Occupational Pension Benefits, in force since 1 Jan. 1995 (AS 1994 2372; BBl 1992 VI 237). Para. 5 — Second sentence amended by Annex No 1 of the FA of 19 June 2015 (Pension Equality on Divorce), in force since 1 Jan. 2017 (AS 2016 2313; BBl 2013 4887). Para. 5 — Amended by Annex No 11 to the Same-Sex Partnership Act of 18 June 2004, in force since 1 Jan. 2007 (AS 2005 5685; BBl 2003 1288). Para. 6 —

2. Early withdrawal

Art. 331e

1 At any time up to three years before becoming entitled to draw retirement benefits, the employee may claim an amount from his benefits scheme for the purpose of acquiring a property for his own personal use. 2 Employees under the age of 50 may withdraw an amount up to the limit of their transferable benefits. Employees aged 50 or older are entitled to withdraw no more than the transferable benefit entitlement they would have had at 50 or one-half of their transferable benefit entitlement at the time of the early withdrawal. 3 The employee may also use such amount for the purpose of acquiring shares in a housing cooperative or similar participatory venture provided a residential unit jointly financed in this manner is for the employee’s own personal use. 4 The early withdrawal brings about an immediate reduction in occupational benefit entitlements in accordance with the benefits scheme regulations and the actuarial basis employed by the benefits scheme. In order to avoid a shortfall

Art. 331e — Inserted by No II of the FA of 17 Dec. 1993 on the Promotion of Home Ownership using Occupational Pension Benefits, in force since 1 Jan. 1995 (AS 1994 2372; BBl 1992 VI 237). Para. 5 — Amended by Annex No 1 of the FA of 19 June 2015 (Pension Equality on Divorce), in force since 1 Jan. 2017 (AS 2016 2313; BBl 2013 4887). Para. 6 — SR 210 Para. 6 — SR 272 Para. 6 — SR 831.42 Para. 6 — Amended by Annex 1 of the FA of 19 June 2015 (Pension Equality on Divorce), in force since 1 Jan. 201

3. Restrictions if the benefits scheme has a cover

Art. 331f

1 The benefits scheme may provide in its regulations that the pledges of assignments, early withdrawals and repayments may be subject to time or volume restrictions or even refused while the fund has a cover deficit. 2 The Federal Council determines the conditions under which the restrictions stipulated in paragraph 1 are permissible and the scope thereof.

Art. 331f — Inserted by Annex No 2 to the FA of 18 June 2004, in force since 1 Jan. 2005 (AS 2004 4635; BBl 2003 6399).

E. Right to inventions and designs

Art. 332

1 Inventions and designs produced by the employee alone or in collaboration with others in the course of his work for the employer and in performance of his contractual obligations belong to the employer, whether or not they may be protected. 2 By written agreement, the employer may reserve the right to acquire inventions and designs produced by the employee in the course of his work for the employer but not in performance of his contractual obligations. 3 An employee who produces an invention or design covered by paragraph 2 must notify the employer thereof in writing; the employer must inform the employee within six months if he wishes to acquire the invention or design or release it to the employee. 4 Where it is not released to the employee, the employer must pay him separate, appropriate remuneration to be determined with due regard to all pertinent circumstances and in particular the economic value of the invention or design, the degree to which the employer contributed, any reli

Art. 332 — Amended by Annex No II to the FA of 5 Oct. 2001 on the Protection of Designs, in force since 1 July 2002 (AS 2002 1456; BBl 2000 2729).

Art. 332a

Repealed by Annex No II to the FA of 5 Oct. 2001 on the Protection of Designs, with effect from 1 July 2002 (AS 2002 1456; BBl 2000 2729).

F. Transfer of employment relationship

1. Effects

Amended by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805).

Art. 333

1 Where the employer transfers the company or a part thereof to a third party, the employment relationship and all attendant rights and obligations pass to the acquirer as of the day of the transfer, unless the employee refuses such transfer. 1bis Where the transferred relationship is governed by a collective employment contract, the acquirer is obliged to abide by it for one year unless it expires or is terminated sooner. 2 In the event that the employee refuses the transfer, the employment relationship ends on expiry of the statutory notice period; until then, the acquirer and the employee are obliged to perform the contract. 3 The former employer and the acquirer are jointly and severally liable for any claims of an employee which fell due prior to the transfer or which fall due between that juncture and the date on which the employment relationship could normally be terminated or is terminated following refusal of the transfer. 4 Moreover, the employer may not transfer the rights a

Para. 1 — Amended by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805). Para. 1bis — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805).

2. Consultation of employees’ organisation

Art. 333a

1 Where the employer transfers the company or a part thereof to a third party, he must inform the organisation that represents the employees or, where there is none, the employees themselves in good time before the transfer takes place of: a. the reason for the transfer; b. its legal, economic and social consequences for the employees. 2 Where measures affecting the employees are envisaged as a result of such transfer, the organisation that represents the employees or, where there is none, the employees themselves must be consulted in good time before the relevant decisions are taken.

Art. 333a — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805).

3. Transfer of the company on insolvency

Art. 333b

If the company or part thereof is transferred during a debt restructuring moratorium, in the course of bankruptcy proceedings or under a composition agreement with assignment of assets, the employment relationship with all rights and obligations is transferred to the acquirer if this has been agreed with the acquirer and the employee does not object to the transfer. In addition, Article 333, with the exception of its paragraph 3, and 333a apply mutatis mutandis.

Art. 333b — Inserted by the Annex to the FA of 21 June 2013, in force since 1 Jan. 2014 (AS 2013 4111; BBl 2010 6455).

G. End of the employment relationship

I. Fixed-term employment relationship

Art. 334

1 A fixed-term employment relationship ends without notice. 2 A fixed-term employment relationship tacitly extended beyond the agreed duration is deemed to be an open-ended employment relationship. 3 After ten years, any employment relationship contracted for a longer duration may be terminated by either party by giving six months’ notice expiring at the end of a month.

Art. 334 — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

II. Open-ended employment relationship

1. Notice in general

Art. 335

1 An employment relationship for an unlimited period may be terminated by either party. 2 The party giving notice of termination must state his reasons in writing if the other party so requests.

Art. 335 — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

2. Notice periods

a. In general

Art. 335a

1 Notice periods must be the same for both parties; where an agreement provides for different notice periods, the longer period is applicable to both parties. 2 However, where the employer has given notice to terminate the employment relationship or expressed an intention to do so for economic reasons, the employee may be permitted a shorter notice period by individual agreement, standard employment contract or collective employment contract.

Art. 335a — Inserted by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

b. During the probation period

Art. 335b

1 During the probation period, either party may terminate the contract at any time by giving seven days’ notice; the probation period is considered to be the first month of an employment relationship. 2 Different terms may be envisaged by an individual written agreement, a standard employment contract or a collective employment contract; however, the probation period may not exceed three months. 3 Where the period that would normally constitute the probation period is interrupted by illness, accident or performance of a non-voluntary legal obligation, the probation period is extended accordingly.

Art. 335b — Inserted by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

c. After the probation period

Art. 335c

1 The employment relationship may be terminated at one month’s notice during the first year of service, at two months’ notice in the second to ninth years of service and at three months’ notice thereafter, all such notice to expire at the end of a calendar month. 2 These notice periods may be varied by written individual, standard or collective employment contract; however, they may be reduced to less than one month only by collective employment contract and only for the first year of service. 3 If the employer terminates the employment relationship and if the employee is entitled to parental leave in accordance with Article 329g before the end of the employment relationship, the period of notice of termination shall be extended by the number of days of paternity leave not yet taken.

Art. 335c — Inserted by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551). Para. 3 — Inserted by Annex No 1 of the FA of 27 Sept. 2019(AS 2020 4689; BBl 2019 3405 3851). Amended by Annex No 1 of the FA of 17 March 2023 (Daily Allowance for the Surviving Parent), in force since 1 Jan. 2024 (AS 2023 680; BBl 2022 2515, 2742).

IIbis. Mass redundancies

1. Definition

Art. 335d

Mass redundancies are notices of termination given by the employer to employees of a business within 30 days of each other for reasons not pertaining personally to the employees and which affect: 1. at least 10 employees in a business normally employing more than 20 and fewer than 100 employees; 2. at least 10% of the employees of a business normally employing at least 100 and fewer than 300 employees; 3. at least 30 employees in a business normally employing at least 300 employees.

Art. 335d — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805).

2. Scope of application

Art. 335e

1 The provisions governing mass redundancies apply equally to fixed-term employment relationships terminated prior to expiry of their agreed duration. 2 They do not apply in the event of cessation of business operations by court order or in the case of mass redundancies due to bankruptcy or under a composition agreement with assignment of assets.

Art. 335e — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805). Para. 2 — Amended by the Annex to the FA of 21 June 2013, in force since 1 Jan. 2014 (AS 2013 4111; BBl 2010 6455).

3. Consultation of employees’ organisation

Art. 335f

1 An employer intending to make mass redundancies must consult the organisation that represents the employees or, where there is none, the employees themselves. 2 He must give them at least an opportunity to formulate proposals on how to avoid such redundancies or limit their number and how to mitigate their consequences. 3 He must furnish the organisation that represents the employees or, where there is none, the employees themselves with all appropriate information and in any event must inform them in writing of: a. the reasons for the mass redundancies; b. the number of employees to whom notice has been given; c. the number of employees normally employed in the business; d. the period in which he plans to issue the notices of termination. 4 He must forward a copy of the information stipulated in paragraph 3 to the cantonal employment office.

Art. 335f — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805).

4. Procedure

Art. 335g

1 The employer notifies the cantonal employment office in writing of any intended mass redundancies and forwards a copy of such notification to the organisation that represents the employees or, where there is none, to the employees themselves. 2 Such notification must contain the results of the consultation with the organisation that represents the employees (Art. 335f) and all appropriate information regarding the intended mass redundancies. 3 The cantonal employment office seeks solutions to the problems created by the intended mass redundancies. The organisation that represents the employees or, where there is none, the employees themselves may submit their own comments. 4 Where notice to terminate an employment relationship has been given within the context of mass redundancies, the relationship ends 30 days after the date on which the mass redundancies were notified to the cantonal employment office unless such notice of termination takes effect at a later date pursuant to statut

Art. 335g — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805).

5. Social plan

a. Definition and principles

Art. 335h

1 A social plan is an agreement in which an employer and employees set out measures to avoid redundancies or to reduce their numbers and mitigate their effects. 2 It must not jeopardise the continued existence of the company.

Art. 335h — Inserted by the Annex to the FA of 21 June 2013, in force since 1 Jan. 2014 (AS 2013 4111; BBl 2010 6455).

b. Duty to negotiate

Art. 335i

1 The employer must hold negotiations with the employees with the aim of preparing a social plan if he: a. normally employs at least 250 employees; and b. intends to make at least 30 employees redundant within 30 days for reasons that have no connection with their persons. 2 Redundancies over a longer period of time that are based on the same operational decision are counted together. 3 The employer negotiates: a. with the employee associations that are party to the collective employment contract if he is a party to this collective employment contract; b. with the organisation representing the employees; or c. directly with the employees if there is no organisation representing the employees. 4 The employee associations, the organisation representing the employees or the employees may invite specialist advisers to the negotiations. These persons must preserve confidentiality in dealings with persons outside the company.

Art. 335i — Inserted by the Annex to the FA of 21 June 2013, in force since 1 Jan. 2014 (AS 2013 4111; BBl 2010 6455).

c. Preparation by an arbitral tribunal

Art. 335j

1 If the parties are unable to agree on a social plan, an arbitral tribunal is appointed. 2 The arbitral tribunal issues the social plan in a binding arbitral award auf.

Art. 335j — Inserted by the Annex to the FA of 21 June 2013, in force since 1 Jan. 2014 (AS 2013 4111; BBl 2010 6455).

d. During bankruptcy or composition proceedings

Art. 335k

The provisions on the social plan (Art. 335h–335j) do not apply to mass redundancies that occur during bankruptcy or composition proceedings that are concluded with a composition agreement.

Art. 335k — Inserted by the Annex to the FA of 21 June 2013, in force since 1 Jan. 2014 (AS 2013 4111; BBl 2010 6455).

III. Protection from termination

1. Wrongful termination

a. General principle

Art. 336

1 Notice of termination is unlawful where given by one party: a. on account of an attribute pertaining to the person of the other party, unless such attribute relates to the employment relationship or substantially impairs cooperation within the business; b. because the other party exercises a constitutional right, unless the exercise of such right breaches an obligation arising from the employment relationship or substantially impairs cooperation within the business; c. solely in order to prevent claims under the employment relationship from accruing to the other party; d. because the other party asserts claims under the employment relationship in good faith; e. because the other party is performing Swiss compulsory military or civil defence service or Swiss alternative civilian service or a non-voluntary legal obligation. 2 Further, notice of termination given by the employer is unlawful when given: a. because the employee is or is not a member of an employees’ organisation or becaus

Art. 336 — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551). Para. 1 let. e — Amended by Annex No 3 to the FA of 6 Oct. 1995 on Alternative Civilian Service, in force since 1 Oct. 1996 (AS 1996 1445; BBl 1994 III 1609). Para. 2 let. c — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805). Para. 3 — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805

b. Penalties

Art. 336a

1 A party who terminates the employment relationship unlawfully must pay compensation to the other party. 2 The court determines the compensation taking due account of all the circumstances, though it must not exceed an amount equivalent to six months’ salary for the employee. Claims for damages on other counts are unaffected. 3 Where termination is unlawful pursuant to Article 336 paragraph 2 letter c, compensation may not exceed two months’ salary for the employee.

Art. 336a — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551). Para. 3 — Inserted by No I of the FA of 17 Dec. 1993, in force since 1 May 1994 (AS 1994 804; BBl 1993 I 805).

c. Procedure

Art. 336b

1 A party seeking compensation pursuant to Articles 336 and 336a must submit his objection to the notice of termination in writing to the party giving such notice not later than the end of the notice period. 2 Where the objection has been properly submitted and the parties cannot reach agreement on the continuation of the employment relationship, the party on whom notice was served may bring his claim for compensation. The claim prescribes if not brought before the courts within 180 days of the end of the employment relationship.

Art. 336b — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

2. Termination at an inopportune juncture

a. By the employer

Art. 336c

1 After the probation period has expired, the employer may not terminate the employment relationship: a. while the other party is performing Swiss compulsory military or civil defence service or Swiss alternative civilian service or, where such service lasts for more than eleven days, during the four weeks preceding or following it; b. while the employee through no fault of his own is partially or entirely prevented from working by illness or accident for up to 30 days in the first year of service, 90 days in the second to fifth years of service and 180 days in the sixth and subsequent years of service; c. during the pregnancy of an employee and the sixteen weeks following birth; cbis. before the end of the extended period of maternity leave in accordance with Article 329f paragraph 2; cter. between the start of leave in accordance with Article 329f paragraph 3 and the last day of leave taken, but for a maximum of three months from the end of the period in accordance with letter c; cqu

Art. 336c — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551). Para. 1 let. a — Amended by Annex No 3 to the FA of 6 Oct. 1995 on Alternative Civilian Service, in force since 1 Oct. 1996 (AS 1996 1445; BBl 1994 III 1609). Para. 1 let. a — Revised by the Federal Assembly Drafting Committee (Art. 33 ParlPA; AS 1974 1051). Para. 1 let. cbis — Inserted by No II of the FA of 18 Dec. 2020, in force since 1 July 2021 (AS 2021 288; BBl 2019 141). Para

b. By the employee

Art. 336d

1 After the probation period has expired, the employee may not terminate the employment relationship if he is required to deputise for a hierarchical superior whose function the employee is capable of assuming or for the employer himself who is prevented from working by the reasons set out at Article 336c paragraph 1 letter a. 2 Article 336c paragraphs 2 and 3 apply mutatis mutandis.

Art. 336d — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

IV. Termination with immediate effect

1. Requirements

a. For good cause

Art. 337

1 Both employer and employee may terminate the employment relationship with immediate effect at any time for good cause; the party doing so must give his reasons in writing at the other party’s request. 2 In particular, good cause is any circumstance which renders the continuation of the employment relationship in good faith unconscionable for the party giving notice. 3 The court determines at its discretion whether there is good cause, However, under no circumstances may the court hold that good cause is constituted by an employee being prevented from working through no fault of his own.

Para. 1 — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

b. Salary at risk

Art. 337a

In the event of the employer’s insolvency, the employee may terminate the employment relationship with immediate effect unless he is furnished with security for his claims under such relationship within an appropriate period.

2. Consequences

a. Termination for good cause

Art. 337b

1 Where the good cause for terminating the employment relationship with immediate effect consists in breach of contract by one party, he is fully liable in damages with due regard to all claims arising under the employment relationship. 2 In other eventualities the court determines the financial consequences of termination with immediate effect at its discretion, taking due account of all the circumstances.

b. Termination without just cause

Art. 337c

1 Where the employer dismisses the employee with immediate effect without good cause, the employee is entitled to damages in the amount he would have earned had the employment relationship ended after the required notice period or on expiry of its agreed duration. 2 Such damages are reduced by any amounts that the employee saved as a result of the termination of the employment relationship or that he earned by performing other work or would have earned had he not intentionally foregone such work. 3 The court may order the employer to pay the employee an amount of compensation determined at the court’s discretion taking due account of all circumstances; however, compensation may not exceed the equivalent of six months’ salary for the employee.

Art. 337c — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

c. Failure to take up post and departure without j

Art. 337d

1 Where the employee fails to take up his post or leaves it without notice without good cause, the employer is entitled to compensation equal to one-quarter of the employee’s monthly salary; in addition, he is entitled to damages for any further losses. 2 Where the employer has suffered no losses or lower losses than the value of the compensation stipulated in the previous paragraph, the court may reduce the compensation at its discretion. 3 Where the claim for damages is not extinguished by set-off, it must be asserted by means of legal action or debt enforcement proceedings within 30 days of the failure to take up the post or departure from it, failing which it prescribes. 4 ...

Para. 3 — Amended by No I of the FA of 18 March 1988, in force since 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551). Para. 4 — Repealed by No I of the FA of 18 March 1988, with effect from 1 Jan. 1989 (AS 1988 1472; BBl 1984 II 551).

V. Death of the employee or employer

1. Death of the employee

Art. 338

1 The employment relationship ends on the death of the employee. 2 However, the employer must pay the salary for a further month thereafter or, where the employee had completed more than five years of service, for a further two months, provided the employee is survived by a spouse, a registered partner, children who are minors or, in the absence of such heirs, other persons to whom he had a duty to provide support.

Para. 2 — Amended by Annex No 11 to the Same-Sex Partnership Act of 18 June 2004, in force since 1 Jan. 2007 (AS 2005 5685; BBl 2003 1288).

2. Death of the employer

Art. 338a

1 On the death of the employer, the employment relationship passes to his heirs; the provisions governing transfer of employment relationships on transfer of a business apply mutatis mutandis. 2 Where an employment relationship was entered into with the employer in person, it ends on his death; however, the employee may claim appropriate compensation for losses incurred as a result of the premature termination of the employment relationship.

VI. Consequences of termination of the employment

1. Maturity of claims

Art. 339

1 When the employment relationship ends, all claims arising therefrom fall due. 2 In the case of claims for commission on transactions performed partly or entirely after the end of the employment relationship, the due date may be deferred by written agreement, albeit generally for no more than six months, or for no more than one year in the case of transactions involving performance in instalments, and for no more than two years in the case of insurance policies and transactions whose execution takes more than half a year. 3 The claim for a share of the business results becomes due in accordance with Article 323 paragraph 3.

2. Return

Art. 339a

1 By the time the employment relationship ends, each contracting party must return to the other everything received from him or from third parties for his account during the employment relationship. 2 In particular, the employee must return motor vehicles and travel tickets and repay advances against salary and expenses to the extent that they exceed his claims. 3 The contracting parties’ rights of lien are unaffected.

3. Severance allowance

a. Requirements

Art. 339b

1 Where an employment relationship with an employee of at least 50 years of age comes to an end after twenty years or more of service, the employer must pay the employee a severance allowance. 2 If the employee dies during the employment relationship, such allowance is paid to the surviving spouse, registered partner or children who are minors or, in the absence of such heirs, other persons to whom he had a duty to provide support.

Para. 2 — Amended by Annex No 11 to the Same-Sex Partnership Act of 18 June 2004, in force since 1 Jan. 2007 (AS 2005 5685; BBl 2003 1288).

b. Amount and due date

Art. 339c

1 The amount of the severance allowance may be fixed by written individual agreement, standard employment contract or collective employment contract but may never be less than two months’ salary for the employee. 2 Where the amount of the severance allowance is not fixed, the court has discretion to determine it taking due account of all the circumstances, although it must not exceed the equivalent of eight months’ salary for the employee. 3 The severance allowance may be reduced or dispensed with if the employee has terminated the employment relationship without good cause or the employer himself has terminated it with immediate effect for good cause or where the payment of such allowance would inflict financial hardship on him. 4 The severance allowance is due on termination of the employment relationship, but the due date may be deferred by written individual agreement, standard employment contract or collective employment contract or by court order.

c. Benefits in lieu of allowance

Art. 339d

1 Where the employee receives benefits from an occupational benefits scheme, these may be deducted from the severance allowance to the extent that they were funded by the employer either directly or through his contributions to the occupational benefits scheme. 2 The employer is likewise released from his obligation to make a severance allowance to the extent that he gives a binding commitment to make future benefits contributions on the employee’s behalf or has a third party give such a commitment.

Para. 1 — Amended by Annex No 2 to the FA of 25 June 1982 on Occupational Old Age, Survivors' and Invalidity Pension Provision, in force since 1 Jan. 1985 (AS 1983 797 827 Art. 1 Abs. 1; BBl 1976 I 149).

VII. Prohibition of competition

1. Requirements

Art. 340

1 An employee with capacity to act may give the employer a written undertaking to refrain from engaging in any activity that competes with the employer once the employment relationship has ended and in particular to refrain from running a rival business for his own account or from working for or participating in such a business. 2 The prohibition of competition is binding only where the employment relationship allows the employee to have knowledge of the employer’s clientele or manufacturing and trade secrets and where the use of such knowledge might cause the employer substantial harm.

2. Restrictions

Art. 340a

1 The prohibition must be appropriately restricted with regard to place, time and scope such that it does not unfairly compromise the employee’s future economic activity; it may exceed three years only in special circumstances. 2 The court may at its discretion impose restrictions on an excessive prohibition of competition, taking due account of all the circumstances; in particular it will have due regard to any consideration made by the employer.

3. Consequences of infringement

Art. 340b

1 An employee who infringes the prohibition of competition must provide compensation for the resultant damage to the employer. 2 Where an employee who infringes the prohibition is liable to pay a contractual penalty, unless otherwise agreed he may exempt himself from the prohibition by paying it; however, he remains liable in damages for any further damage. 3 Where expressly so agreed in writing, in addition to the agreed contractual penalty and any further damages, the employer may insist that the situation that breaches the contract be rectified to the extent justified by the injury or threat to the employer’s interests and by the conduct of the employee.

4. Extinction

Art. 340c

1 The prohibition of competition is extinguished once the employer demonstrably no longer has a substantial interest in its continuation. 2 The prohibition is likewise extinguished if the employer terminates the employment relationship without the employee having given him any good cause to do so, or if the employee terminates it for good cause attributable to the employer.

H. No right of waiver and prescription

Art. 341

1 For the period of the employment relationship and for one month after its end, the employee may not waive claims arising from mandatory provisions of law or the mandatory provisions of a collective employment contract. 2 General provisions governing prescriptive periods are applicable to claims under the employment relationship.

I. Reservation of public law and effects under civ

Art. 342

1 The following are reserved: a. the provisions of the Confederation, cantons and communes regarding employment relationships under public law, except in respect of Article 331 paragraph 5 and Articles 331a–331e; b. the public law provisions of the Confederation and the cantons governing work and vocational training. 2 Where federal or cantonal provisions governing work and vocational training impose an obligation under public law on the employer or employee, the other party has a claim under civil law for performance of said obligation if it is susceptible to inclusion in the individual employment contract.

Para. 1 let. a — Amended by No II 2 of the FA of 18 Dec. 1998, in force since 1 May 1999 (AS 1999 1384; BBl 1998 V 5569).

Art. 343

Repealed by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, with effect from 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221).

Section Two: Special Individual Employment Contrac

A. The Apprenticeship Contract

Amended by Annex No II 3 to the FA of 13 Dec. 2002 on Vocational and Professional Education and Training, in force since 1 Jan. 2004 (AS 2003 4557; BBl 2000 5686).

I. Definition and conclusion

1. Definition

Art. 344

An apprenticeship contract is a contract whereby the employer undertakes to provide an apprentice with the requisite training for a particular vocation and the apprentice undertakes to work in the employer’s service in order to acquire such training.

2. Conclusion and content

Art. 344a

1 An apprenticeship contract is valid only if it is done in writing. 2 The contract must stipulate the nature and duration of the vocational training, the salary, the probation period, the working hours and the holiday entitlement. 3 The probation period must be no less than one month and no longer than three months. Where not stipulated by the parties in the contract, it is three months. 4 By agreement between the parties and with the consent of the cantonal authority, the probation period may exceptionally be extended before its expiry to a final duration of up to six months. 5 The contract may contain other terms, in particular regarding the supply of work tools, contributions towards the costs of board and lodgings, the payment of insurance premiums and other obligations to be performed by the parties. 6 Any agreement restricting the apprentice’s freedom to decide his vocational activities once the apprenticeship is complete is void.

II. Effects

1. Special obligations of the trainee and his lega

Art. 345

1 The apprentice must do his utmost to achieve the goal of the apprenticeship. 2 The apprentice’s legal representative must do his best to support the employer in his task and to foster a good relationship between the employer and the apprentice.

2. Special obligations of the employer

Art. 345a

1 The employer must ensure that the vocational training is supervised by a specialist with the necessary professional skills and personal qualities. 2 He must without deducting any salary allow the apprentice the time required to attend technical college and take interdisciplinary courses and to sit the vocational examinations on completion of the apprenticeship. 3 While the apprentice is still under the age of 20, the employer must grant him a holiday entitlement of at least five weeks per year of apprenticeship. 4 He may allocate work outside the relevant vocational field and piece work to the apprentice only insofar as such work is related to the vocation in which the apprentice is being instructed and the training is not thereby impaired.

III. Termination

1. Early termination

Art. 346

1 During the probation period, the apprenticeship relationship may be terminated at any time by giving seven days’ notice. 2 The apprenticeship relationship may be terminated with immediate effect for good cause within the meaning of Article 337, and in particular where: a. the specialist supervising the training lacks the professional skills or personal qualities required to train the apprentice; b. the apprentice does not have the physical or intellectual aptitude required for his training or if his health or morals are in doubt; the apprentice and, where applicable, his legal representative must be heard beforehand; c. the training cannot be completed or can only be completed under fundamentally different conditions

2. Certificate of apprenticeship

Art. 346a

1 At the end of the apprenticeship, the employer must provide the apprentice with a certificate setting out the requisite information concerning the vocational training acquired and the duration of the apprenticeship. 2 At the request of the apprentice or his legal representative, the certificate must also give information on the skills, achievements and conduct of the apprentice.

B. The Commercial Traveller’s Contract

I. Definition and conclusion

1. Definition

Art. 347

1 Under a commercial traveller’s contract, the commercial traveller undertakes to broker or conclude all manner of transactions on behalf of the owner of a trading, manufacturing or other type of commercial company off the employer’s business premises in exchange for payment of a salary. 2 Any employee who is not primarily engaged in itinerant activities or who works only occasionally or temporarily for the employer or who acts as a travelling salesman for his own account is not considered a commercial traveller.

2. Conclusion and content

Art. 347a

1 The employment relationship is defined by written contract which stipulates in particular: a. the duration and termination of the employment relationship; b. the commercial traveller’s authority; c. the remuneration and reimbursement of expenses; d. the applicable law and the forum, where one of the parties is resident abroad. 2 In the absence of a written contract, the matters specified in the previous paragraph are determined by statutory provision and customary working conditions. 3 An oral agreement is valid only with regard to the commencement of service, the nature and location of the commercial travel and other terms that do not contradict the statutory provisions or the written contract.

II. Obligations and authority of the commercial tr

1. Special obligations

Art. 348

1 The commercial traveller must visit the clients in the prescribed manner unless there is just cause to vary it; he may neither broker nor conclude transactions on his own behalf or on behalf of a third party without the written consent of the employer. 2 Where the commercial traveller is authorised to conclude transactions, he must comply with the prescribed prices and other terms and conditions and must declare that any changes thereto are subject to approval by the employer. 3 The commercial traveller must report regularly on his activities, pass on all orders received immediately to the employer and notify the employer of any matters of note that concern his clients.

2. Del credere

Art. 348a

1 Any agreement whereby the commercial traveller is made liable for the client’s payment or any other type of performance of the client’s obligations or for all or part of the recovery costs is void. 2 Where the commercial traveller concludes transactions with private individuals, he may by means of a written undertaking assume liability in a given transaction for at most one-quarter of the losses incurred by the employer as a result of non-performance of the client’s obligations, on condition that an appropriate del credere commission is agreed. 3 In the case of insurance policies the travelling insurance broker may by means of a written undertaking assume liability for at most one-half of the recovery costs where a single-payment premium or premium instalments are not paid and he seeks their recovery by way of legal action or compulsory execution.

3. Authority

Art. 348b

1 Unless otherwise agreed in writing, a commercial traveller only has authority to broker transactions. 2 Where the commercial traveller is authorised to conclude transactions, his powers extend to all legal procedures normally associated with their execution; however, without special authority he may not take receipt of payments from clients nor approve payment periods. 3 Article 34 of the Federal Act of 2 April 1908 on Insurance Policies is reserved.

Para. 3 — SR 221.229.1

III. Special obligations of the employer

1. Area of activity

Art. 349

1 Where a particular area or clientele is allocated to the commercial traveller, it is deemed to have been allocated to him exclusively unless otherwise agreed in writing; however, the employer remains authorised to enter into transactions personally within the area or clientele allocated to the commercial traveller. 2 The employer may unilaterally vary the contractually stipulated area or clientele where legitimate reasons require such variation before expiry of the notice to terminate the contract; however, where this is the case, the commercial traveller is entitled to compensation and has good cause for termination of the employment relationship.

2. Salary

a. In general

Art. 349a

1 The employer must pay the commercial traveller a salary consisting of a fixed salary component with or without commission. 2 A written agreement whereby the salary consists exclusively or principally of commission is valid only if such commission gives appropriate remuneration for the services of the commercial traveller. 3 The salary may be freely determined by written agreement for a probation period of no more than two months.

b. Commission

Art. 349b

1 Where an area or clientele is allocated exclusively to a commercial traveller, the agreed or customary commission is payable to him on all transactions concluded by him or his employer within such area or clientele. 2 If a particular area or clientele has not been allocated exclusively to him, the commercial traveller is entitled to commission only on transactions that he personally brokered or concluded. 3 Where it is not yet possible to calculate the precise value of a transaction when the commission falls due, the initial commission payable is based on the minimum value calculated by the employer, with the balance falling due at the latest when the transaction is executed.

c. Prevention from travelling

Art. 349c

1 Where the commercial traveller through no fault of his own is prevented from travelling and his salary must nonetheless be paid to him by law or by contract, it is calculated on the basis of the fixed salary component plus appropriate compensation for loss of commission. 2 Where the commission makes up less than one-fifth of the salary, it may be agreed in writing that no compensation for loss of commission is owed to him should he be prevented from travelling through no fault of his own. 3 Where a commercial traveller who is prevented from travelling through no fault of his own receives his full salary, at the employer’s request he must carry out work on the business premises to the extent he is capable of such work and it may reasonably be required of him.

3. Expenses

Art. 349d

1 Where the commercial traveller works for several employers at the same time and there is no written agreement stipulating how expenses are to be divided, each employer must reimburse an equal share. 2 Any agreement stipulating that the fixed salary component or commission includes reimbursement of all or part of the expenses is void.

4. Special lien

Art. 349e

1 By way of securing claims due to him under the employment relationship and, in the event that the employer becomes insolvent, claims that are not yet due, the commercial traveller has a special lien on chattels and securities and on any payments received from clients by virtue of an authority to collect with which he has been vested. 2 The lien does not extend to travel tickets, price lists, client lists and other documents.

IV. Termination

1. In special circumstances

Art. 350

1 Where commission makes up at least one-fifth of a commercial traveller’s salary and is subject to major seasonal fluctuations, and where the commercial traveller has worked for the employer since the end of the previous season, any notice of termination served on him by the employer during the following season may not expire until the end of the second month following the month in which it was served. 2 On the same conditions, where a commercial traveller has been retained by an employer until the end of one season any notice of termination given by him during the period prior to the beginning of the following season may not expire until the end of the second month following the month in which it was served.

2. Special consequences

Art. 350a

1 At the end of the employment relationship, the commercial traveller is entitled to commission on all the transactions that he concluded or brokered and on all orders passed on to the employer before the end of the employment relationship, whatever the date of their acceptance or execution. 2 The commercial traveller must return to the employer all samples, patterns and models, price lists, customer lists and other documents supplied to him for his work activities by the end of the employment relationship, subject to the right of lien.

C. The Homeworker’s Contract

I. Definition and conclusion

1. Definition

Art. 351

Under a homeworker’s contract, the homeworker undertakes to work for the employer in return for a salary, such work to be carried out alone or with members of his family and in his home or on other premises of his choosing.

Term in accordance with Art. 21 No 1 of the Homeworking Act of 20 March 1981, in force since 1 April 1983 (AS 1983 108; BBl 1980 II 282). This amendment is taken into account in Art. 351–354 and 362 para. 1.

2. Notification of conditions

Art. 351a

1 Before each work assignment is given to the homeworker, the employer must inform him of the applicable conditions and specifications to the extent these are not already covered by the general terms and conditions of employment; he must specify the materials to be procured by the homeworker and state in writing the amounts to be reimbursed for such materials and the salary. 2 If information regarding the salary and the amounts to be reimbursed for materials procured by the homeworker is not given in writing before the work is allocated, the customary terms and conditions of employment are applicable.

II. Special obligations of the home worker

1. Performance of the work

Art. 352

1 The homeworker must start the work he has accepted on time, finish it by the agreed deadline and deliver the results to the employer. 2 If the work is defective and the homeworker is at fault, he is obliged to rectify it at his own expense to the extent that the defects can be removed.

2. Materials and work tools

Art. 352a

1 The homeworker is obliged to treat the materials and tools supplied by the employer with all due care, to give account of how they are used and to return tools and unused materials to the employer. 2 Where in the course of his work the homeworker notes defects in the materials or tools supplied, he must inform the employer immediately and await further instructions before continuing work. 3 Where the materials or tools supplied have been damaged through the fault of the homeworker, he is liable to the employer at most for the replacement cost.

III. Special obligations of the employer

1. Acceptance of completed work

Art. 353

1 The employer must inspect the completed work on delivery and notify the homeworker of any defects within one week. 2 Where the employer fails to notify defects to the homeworker promptly, the work is deemed to have been accepted.

2. Salary

a. Payment

Art. 353a

1 Where the homeworker is engaged by the employer on a continuous basis, the salary for the work carried out is paid twice monthly or, with the homeworker’s consent, at the end of each month, and otherwise on delivery of the completed work. 2 Each salary payment must be accompanied by a written statement giving the reasons for any salary deductions that have been made.

b. When prevented from working

Art. 353b

1 An employer who engages the home worker on a continuous basis is obliged pursuant to Articles 324 and 324a to pay his salary in the event that the employer fails to accept his work or he is prevented from working by personal circumstances for which he is not at fault. 2 In other cases the employer is not obliged to pay the salary pursuant to Articles 324 and 324a.

IV. Termination

Art. 354

1 Where trial work is assigned to the homeworker, unless otherwise agreed the employment relationship is deemed to have been entered into on a trial basis for a fixed period. 2 Unless otherwise agreed, where the homeworker is engaged by the employer on a continuous basis, the employment relationship is deemed to have been entered into for an indefinite period, and in all other cases it is deemed to have been entered into for a fixed period.

D. Applicability of General Provisions

Art. 355

The general provisions governing individual employment contracts are applicable by way of supplement to apprenticeship contracts, commercial traveller’s contracts and homeworker’s contracts.

Section Three: The Collective Employment Contract

A. The Collective Employment Contract

I. Definition, content, form and duration

1. Definition and content

Art. 356

1 A collective employment contract is a contract whereby employers or employers’ associations and employees’ associations jointly lay down clauses governing the conclusion, nature and termination of employment relationships between the employers and individual employees. 2 The collective employment contract may also contain other clauses, provided they pertain to the relationship between employers and employees or are limited to the formulation of such clauses. 3 Further, the collective employment contract may define the mutual rights and obligations of the contracting parties and the monitoring and enforcement of the clauses specified in the previous paragraphs. 4 Where more than one employers’ association and/or employees’ association is bound by the collective employment contract either from the outset or as a result of subsequent accession with the consent of the original contracting parties, they have equal rights and obligations thereunder and any contrary agreement is void.

2. Freedom of association and freedom to practise

Art. 356a

1 Any clause in a collective employment contract or individual agreement between the contracting parties intended to compel an employer or employee to join a contracting association is void. 2 Any clause in a collective employment contract or individual agreement between the contracting parties intended to exclude or restrict the practice of a particular profession or occupation by an employee or his acquisition of the necessary vocational training is void. 3 The clauses and agreements referred to in the previous paragraph are valid by way of exception if they are justified by overriding interests that warrant protection, in particular personal health and safety or the quality of work; however, denial of access to the profession is not an interest that warrants protection.

3. Accession

Art. 356b

1 Individual employers and individual employees in the service of employers bound by the collective employment contract may accede to it with the consent of the contracting parties, whereupon they become participating employers and employees. 2 The collective employment contract may stipulate the rules governing such accession. Unreasonable conditions attaching to accession, such as unreasonable monetary contributions, may be declared void or limited to an admissible level by the court; however, clauses and agreements intended to set contributions in favour of one individual contracting party are always void. 3 Any clause in a collective employment contract or individual agreement between the contracting parties intended to compel members of associations to accede to the collective employment contract is void if such associations are not entitled to become party to it or to conclude an analogous contract.

4. Form and duration

Art. 356c

1 The conclusion of a collective employment contract, its amendment and termination by mutual agreement, the accession of a new contracting party and notice to terminate the contract are valid only if done in writing, as are declarations of accession by individual employers or employees, the consent to such accession by the contracting parties pursuant to Article 356b paragraph 1 and notice to withdraw from the contract. 2 Where the collective employment contract is open-ended and does not provide otherwise, after one year has elapsed any of the contracting parties may withdraw from it at any time by giving six months’ notice, which is effective for all other parties. The same applies mutatis mutandis to parties subsequently acceding to the contract.

II. Effects

1. On participating employers and employees

Art. 357

1 Unless otherwise stipulated in the collective employment contract, its provisions relating to the formation, nature and termination of individual employment relationships are binding on the participating employers and employees for the duration of the contract and may not be derogated. 2 Any agreement between participating employers and employees that contradicts the compulsory provisions of the collective employment contract is void and replaced by those provisions; however, such an agreement may be valid if it is to the benefit of the employee.

2. On the contracting parties

Art. 357a

1 The contracting parties are obliged to ensure compliance with the collective employment contract; to this end associations must exert their influence on their members and, where required, have recourse to the means placed at their disposal by their articles of association and the law. 2 Each contracting party has a duty to maintain harmonious industrial relations and in particular to refrain from any hostile action on matters regulated by the collective employment contract; such duty applies without restriction only where expressly so agreed.

3. Joint enforcement

Art. 357b

1 A collective employment contract concluded between associations may stipulate that each contracting party has an actionable claim against the other parties in the event that they fail to discharge their duty to ensure that the participating employers and employees abide by the contract as regards the following matters: a. the formation, nature and termination of employment relationships, in respect of which the claim is for a declaratory judgment only; b. the payment of contributions to equalisation funds or other institutions in connection with the employment relationship, the representation of employees within businesses and the maintenance of harmonious industrial relations; c. monitoring activities, the provision of security and contractual penalties in relation to the provisions set out in letters a and b. 2 Clauses within the meaning of the previous paragraph may be agreed where the contracting parties are expressly authorised so to do by their articles of association or resolu

III. Relationship to mandatory law

Art. 358

The mandatory law of the Confederation and the cantons takes precedence over the collective employment contract; however, other provisions may be agreed to the benefit of employees provided they do not conflict with mandatory law.

B. The Standard Employment Contract

I. Definition and content

Art. 359

1 The standard employment contract is a contract in which clauses governing the formation, nature and termination of certain types of employment relationship are laid down. 2 The cantons shall draw up standard employment contracts for agricultural workers and domestic staff to regulate in particular working hours, leisure time and employment conditions for female employees and minors. 3 Article 358 is applicable mutatis mutandis to the standard employment contract.

II. Competent authorities and procedure

Art. 359a

1 Where the scope of application of a standard employment contract extends over more than one canton, the Federal Council is responsible for issuing it, but otherwise the canton is responsible. 2 Before being issued, the standard employment contract shall be published in an appropriate manner and a time limit set within which interested parties may submit their comments in writing; furthermore, the relevant professional associations and public bodies shall be consulted. 3 The standard employment contract comes into force once it has been issued in accordance with the provisions governing official publications. 4 The same procedure applies to the rescission or amendment of a standard employment contract.

III. Effects

Art. 360

1 Unless otherwise agreed, the standard employment contract applies directly to the employment relationships that it governs. 2 The standard employment contract may stipulate that agreements derogating from certain of its provisions must be done in writing.

IV. Minimum wage

1. Requirements

Art. 360a

1 Where the wages that are customary for a geographical area, occupation or industry are repeatedly and unfairly undercut within a particular occupation or economic sector and there is no collective employment contract laying down a minimum wage that may be declared universally binding, on application by the tripartite commission as defined in Article 360b, the competent authority may issue a fixed-term standard employment contract providing for a minimum wage varied by region and, where applicable, by locality in order to combat or prevent abusive practices. 2 The minimum wage must not conflict with the public interest or prejudice the legitimate interests of other economic sectors or sections of the population. It must have due regard to the minority interests of the economic sectors or occupations concerned that stem from regional and business diversity. 3 In the case of repeated infringements of the provisions on the minimum wage in a standard employment contract in accordance with

Art. 360a — Inserted by Annex No 2 to the FA of 8 Oct. 1999 on Workers posted to Switzerland, in force since 1 June 2004 (AS 2003 1370; BBl 1999 6128). Para. 3 — Inserted by No II of the FA of 30 Sept. 2016, in force since 1 April 2017 (AS 2017 2077; BBl 2015 5845).

2. Tripartite commissions

Art. 360b

1 The Confederation and each canton shall establish a tripartite commission consisting of an equal number of employers’ and employees’ representatives in addition to representatives of the state. 2 Employers’ and employees’ associations have the right to put forward candidates for selection as their representatives within the meaning of paragraph 1. 3 The commissions monitor the labour market. If they observe abusive practices within the meaning of Article 360a paragraph 1, they normally seek to reach agreement directly with the employers concerned. Where this cannot be achieved within two months, they petition the competent authority to issue a standard employment contract fixing a minimum wage for the affected sectors or occupations. 4 If labour market conditions in the affected sectors change, the tripartite commission petitions the competent authority to amend or rescind the standard employment contract. 5 To enable them to discharge their responsibilities, the tripartite commissio

Art. 360b — Inserted by Annex No 2 to the FA of 8 Oct. 1999 on Workers posted to Switzerland, in force since 1 June 2003 (AS 2003 1370; BBl 1999 6128). Para. 6 — Inserted by Art. 2 No 2 of the FA of 17 Dec. 2004 approving and implementing the Protocol relating to the extension of the Agreement between the Swiss Confederation, of the one part, and the EU and its member states, of the other part, on the free movement of persons to new EU member states and approving the revision of the accompanying

3. Official secrecy

Art. 360c

1 The members of tripartite commissions are subject to official secrecy; in particular they are obliged to keep secret from third parties any information of a commercial or private nature gained in the exercise of their office. 2 Such duty of secrecy remains in force even after membership of the tripartite commission has ceased.

Art. 360c — Inserted by Annex No 2 to the FA of 8 Oct. 1999 on Workers posted to Switzerland, in force since 1 June 2003 (AS 2003 1370; BBl 1999 6128).

4. Effects

Art. 360d

1 The standard employment contract as defined in Article 360a also applies to employees who work only temporarily within its geographical scope and to employees whose services have been loaned out. 2 It is not permissible to derogate from a standard employment contract as defined in Article 360a to the detriment of the employee.

Art. 360d — Inserted by Annex No 2 to the FA of 8 Oct. 1999 on Workers posted to Switzerland, in force since 1 June 2004 (AS 2003 1370; BBl 1999 6128).

5. Associations’ right of action

Art. 360e

Employers’ and employees’ associations have the right to apply for a declaratory judgment as to whether an employer is in compliance with the standard employment contract as defined in Article 360a.

Art. 360e — Inserted by Annex No 2 to the FA of 8 Oct. 1999 on Workers posted to Switzerland, in force since 1 June 2004 (AS 2003 1370; BBl 1999 6128).

6. Notification

Art. 360f

A canton issuing a standard employment contract pursuant to Article 360a must forward a copy to the competent federal office.

Art. 360f — Inserted by Annex No 2 to the FA of 8 Oct. 1999 on Workers posted to Switzerland, in force since 1 June 2004 (AS 2003 1370; BBl 1999 6128). Now the State Secretariat for Economic Affairs (SECO).

Section Four: Mandatory Provisions

A. Provisions from which no derogation is permissi

Art. 361

1 It is not permissible to derogate from the following provisions to the detriment of either the employer or the employee by individual agreement, standard employment contract or collective employment contract: Article 321c: paragraph 1 (overtime); Article 323: paragraph 4 (advances); Article 323b: paragraph 2 (set-off against countervailing claims); Article 325: paragraph 2 (assignment and pledge of salary claims); Article 326: paragraph 2 (allocation of work); Article 329d: paragraph 2 and 3 (holiday pay); Article 331: paragraphs 1 and 2 (employee benefits scheme contributions); Article 331b: (assignment and pledge of claims to occupational benefits); ... Article 334: paragraph 3 (termination of long-term employment relationships); Article 335: (termination of employment relationships); Article 335k: (social plan during bankruptcy or composition proceedings) Article 336: paragraph 1 (wrongful termination); Article 336a: (compensation in the event of wrongful termination); Article 336

Para. 1 — Inserted by Annex No 2 to the FA of 17 Dec. 1993 on the Vesting of Occupational Old Age, Survivors' and Invalidity Benefits, in force since 1 Jan. 1995 (AS 1994 2386; BBl 1992 III 533). Para. 1 — Repealed by Annex No 2 to the FA of 17 Dec. 1993 on the Vesting of Occupational Old Age, Survivors' and Invalidity Benefits, with effect from 1 Jan. 1995 (AS 1994 2386; BBl 1992 III 533). Para. 1 — Inserted by the Annex to the FA of 21 June 2013, in force since 1 Jan. 2014 (AS 2013 4111; BBl 2

B. Provisions from which no derogation is permissi

Art. 362

1 It is not permissible to derogate from the following provisions to the detriment of the employee by individual agreement, standard employment contract or collective employment contract: Article 321e: (employee’s liability); Article 322a: paragraphs 2 and 3 (share in the business results); Article 322b: paragraphs 1 and 2 (entitlement to commission); Article 322c: (statement of commission); Article 323b: paragraph 1, second sentence (salary statement); Article 324: (salary where employer fails to accept work); Article 324a: paragraphs 1 and 3 (salary where employee is prevented from working); Article 324b: (salary where employee has compulsory insurance); Article 326: paragraphs 1, 3 and 4 (piece work); Article 326a: (piece work rates); Article 327a: paragraph 1 (reimbursement of expenses in general); Article 327b: paragraph 1 (reimbursement of expenses for motor vehicles); Article 327c: paragraph 2 (advances for expenses); Article 328: (protection of the employee’s personality rights

Para. 1 — Amended by No II 1 of the FA of 20 Dec. 2019 on Improving the Compatibility of Employment and Caring for Family Members, in force since 1 Jan. 2021 (AS 2020 4525; BBl 2019 4103). Para. 1 — Inserted by Annex No 2 to the FA of 19 June 1992 on Data Protection, in force since 1 July 1993 (AS 1993 1945; BBl 1988 II 413). Para. 1 — Inserted by Art. 13 of the FA of 6 Oct. 1989 on Youth Work, in force since 1 Jan. 1991 (AS 1990 2007; BBl 1988 I 825). Para. 1 — Inserted by Annex No 12 Annex No

Title Eleven: The Work Contract

A. Definition

Art. 363

A work contract is a contract whereby the contractor undertakes to produce a piece of work and the customer undertakes to pay the contractor for that work.

B. Effects

I. Contractor’s obligations

1. In general

Art. 364

1 The contractor generally has the same duty of care as the employee in an employment relationship. 2 The contractor is obliged to carry out the work in person or to have it carried out under his personal supervision, unless the nature of the work is such that his personal involvement is not required. 3 Unless otherwise required by agreement or custom, the contractor is obliged to supply the resources, tools and machinery necessary for producing the work at his own expense.

Para. 1 — Amended by No II Art. 1 No 6 of the FA of 25 June 1971, in force since 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Final and Transitional Provisions of Title X, at the end of this Code.

2. Regarding materials

Art. 365

1 Where the contractor is responsible for supplying the materials, he is liable to the customer for their quality and has the same warranty obligation as a seller. 2 Where materials are supplied by the customer, the contractor must treat them with all due care, give account of how they are used and return any that remain unused to the customer. 3 If, when producing the work, the contractor notes defects in the materials supplied or in the designated construction site or if any other circumstance arises which might compromise the correct or timely production of the work, he must inform the customer immediately, failing which he shall himself be liable for any adverse consequences.

3. Prompt commencement and contractual production

Art. 366

1 Where the contractor does not begin the work on time or delays its production in breach of contract or, through no fault of the customer, falls so far behind that there is no longer any prospect of completing the work on time, the customer is entitled to withdraw from the contract without waiting for the agreed delivery date. 2 Where during the production of the work it becomes evident that, through the fault of the contractor, the work will be produced in a manner that is defective or otherwise contrary to the contract, the customer may set the contractor or have the contractor set an appropriate time limit within which to take remedial action and notify him that any failure to do so will result in the hire of a third party to take such remedial action or to complete the work at the risk and expense of the contractor.

4. Liability for defects

a. Identification of defects

Art. 367

1 The customer must inspect the condition of the delivered or completed work as soon as feasible in the normal course of business and must inform the contractor of any defects discovered. 1bis The period for reporting defects in an immovable work is 60 days. An agreement on a shorter period is invalid. The same applies to the following defects in a work that have caused an immovable work to be defective: a. defects in a movable work that has been integrated into the immovable work in accordance with its intended use; b. defects in a work that has been carried out by an architect or engineer and has been used as intended as the basis for the construction of an immovable work. 2 Each party is entitled to request that the work be inspected by experts at his own expense and that a legal record be made of their findings.

Para. 1bis let. b — Inserted by No I of the FA of 20 Dec. 2024 (Construction Defects), in force since 1 Jan. 2026 (AS 2025 270; BBl 2022 2743).

b. Rights of the customer in the event of defects

Art. 368

1 Where the work is so defective or deviates from the contractual terms to such an extent that the customer has no use for it or cannot reasonably be expected to accept it, the customer may refuse acceptance and, if the contractor is at fault, seek damages. 2 In the case of minor defects in the work or only slight deviations from the contractual terms, the customer may reduce the price in proportion to the decrease in its value or require the contractor to rectify the work at his own expense and to pay damages if he was at fault, provided such rectification is possible without excessive cost to the contractor. In the case of rectification free of charge, Article 366 paragraph 2 applies mutatis mutandis. 2bis Any prior agreement limiting or excluding the right to rectification free of charge is invalid if the defect affects a structure. 3 In the case of works produced on the customer’s land or property which by their nature cannot be removed without disproportionate detriment, the custo

Para. 2 — Second sentence inserted by No I of the FA of 20 Dec. 2024 (Construction Defects), in force since 1 Jan. 2026 (AS 2025 270; BBl 2022 2743). Para. 2bis — Inserted by No I of the FA of 20 Dec. 2024 (Construction Defects), in force since 1 Jan. 2026 (AS 2025 270; BBl 2022 2743).

c. Customer’s liability

Art. 369

The rights accruing to the customer in respect of defects in the work are forfeited if he is at fault for such defects due to having given instructions concerning production of the work that were contrary to the express warnings of the contractor or for any other reason.

d. Approval of the work

Art. 370

1 Once the completed work has been expressly or tacitly approved by the customer, the contractor is released from all liability save in respect of defects which could not have been discovered on acceptance and normal inspection or were deliberately concealed by the contractor. 2 Tacit approval is presumed where the customer omits to inspect the work and give notice of defects as provided by law. 3 Where defects come to light only subsequently, the customer must notify the contractor as soon as he becomes aware of them, otherwise the work is deemed to have been approved even in respect of such defects. 4 Defects in an immovable work that were not apparent on acceptance or on customary inspection must be reported within 60 days of their discovery. An agreement on a shorter period is invalid. The same applies to the following defects in a work that have caused an immovable work to be defective: a. defects in a movable work that has been integrated into the immovable work in accordance wit

Para. 4 let. b — Inserted by No I of the FA of 20 Dec. 2024 (Construction Defects), in force since 1 Jan. 2026 (AS 2025 270; BBl 2022 2743).

e. Prescription

Art. 371

1 The right of the customer to bring claims due to defects in the work prescribes two years from acceptance of the work. However, the prescriptive period amounts to five years where defects in a movable object that has been incorporated in an immovable work in a manner consistent with its nature and purpose have caused the work to be defective. 2 The customer’s claims in respect of defects in an immovable work against both the contractor and any architect or engineer who provided services in connection with such work prescribe five years after completion of the work. 3 The prescriptive period of five years may not be changed to the detriment of the customer. Otherwise the rules governing prescription of the corresponding rights of a buyer apply mutatis mutandis.

Art. 371 — Amended by No I of the FA of 16 March 2012 (Limitation Periods for Guarantee Claims. Extension and Coordination), in force since 1 Jan. 2013 (AS 2012 5415; BBl 2011 2889 3903). Para. 3 — Amended by No I of the FA of 20 Dec. 2024 (Construction Defects), in force since 1 Jan. 2026 (AS 2025 270; BBl 2022 2743).

II. Customer’s obligations

1. Due date for payment

Art. 372

1 The customer must pay for the work on completion or delivery. 2 Where the work is delivered in stages and payment in instalments has been agreed, the amount due for each stage of the work is payable on delivery thereof.

2. Amount of payment

a. Firm commitment

Art. 373

1 Where the payment was fixed in advance as an exact amount, the contractor is obliged to produce the work for the agreed amount and may not charge more even if the work entailed more labour or greater expense than predicted. 2 However, where production of the work was prevented or seriously hindered by extraordinary circumstances that were unforeseeable or excluded according to the conditions assumed by both parties, the court may at its discretion authorise an increase in the price or the termination of the contract. 3 The customer must pay the full price even where the work has entailed less labour than predicted.

b. By the value of the work

Art. 374

Where the price was not fixed in advance or fixed only as an approximate amount, it is determined according to the value of the work produced and the expenses incurred by the contractor.

C. Termination

I. Withdrawal because estimate exceeded

Art. 375

1 Where an estimate agreed with the contractor is exceeded by a disproportionate amount through no fault of the customer, he has the right to withdraw from the contract before or after completion. 2 In the case of construction work carried out on his land or property, the customer is entitled to an appropriate reduction in the price or, if the work is not yet complete, to call a halt to the work and withdraw from the contract against equitable compensation for work already done.

II. Destruction of the work

Art. 376

1 If the work is destroyed by accident prior to completion or delivery, the contractor is not entitled to payment for work done or of expenses incurred unless the customer is in default on acceptance of the work. 2 In this case any loss of materials is borne by the party that supplied them. 3 Where the work has been destroyed either due to a defect in the materials supplied or in the construction site designated by the customer or as a result of the method of production that he prescribed, the contractor shall be entitled to payment for the work already done and of expenses incurred that were not included in the price, provided he alerted the customer to the risks in good time, and also to damages if the customer was at fault.

III. Withdrawal by the customer against indemnity

Art. 377

The customer may withdraw from the contract at any time before the work is completed provided he pays for work already done and indemnifies the contractor in full.

IV. Impossibility of performance for reasons attri

Art. 378

1 Where completion of the work is rendered impossible by chance occurrence affecting the customer, the contractor is entitled to payment for the work already done and of expenses incurred that were not included in the price. 2 Where the customer is at fault for the impossibility of performance, the contractor may also claim damages.

V. Death or incapacity of the contractor

Art. 379

1 Where the contractor dies or becomes incapable of finishing the work through no fault of his own, the work contract becomes void if it was concluded in view of the personal attributes of the contractor. 2 The customer is obliged to accept and pay for work already done to the extent it is of use to him.

Title Twelve: The Publishing Contract

A. Definition

Art. 380

A publishing contract is a contract whereby the originator – the author of a literary or artistic work or his legal successor – undertakes to entrust the work to a publisher, who undertakes to reproduce and distribute it.

B. Effects

I. Transfer of copyright and warranty

Art. 381

1 The author’s rights to the work are transferred to the publisher to the extent and for as long as required for performance of the contract. 2 The originator must give warranty to the publisher that he had the right to make the work available for publication at the time the contract was concluded and, where it is subject to copyright protection, that he holds the copyright. 3 Where all or part of the work has already been made available for publication to a third party or the originator is aware that it has already been published, he must inform the publisher before entering into the contract.

II. Originator’s power of disposal

Art. 382

1 As long as the editions of the work to which the publisher is entitled have not yet been exhausted, the originator may not make other arrangements regarding the work or parts thereof to the publisher’s detriment. 2 Newspaper articles or relatively short passages of magazine copy may be published elsewhere by the originator at any time. 3 Contributions to collections or anthologies and relatively lengthy magazine articles must not be published elsewhere by the originator within three months of the appearance in print of such contribution or article.

III. Number of editions

Art. 383

1 Where no clause was agreed that stipulates the number of editions, the publisher is entitled to produce only one. 2 Where nothing was agreed, the publisher determines the size of the edition but at the originator’s request must print at least enough to generate reasonable sales, and once the first print run is completed, he must not print any further copies. 3 Where the publishing contract confers publishing rights for several or all editions of a work and the publisher fails to produce a new edition after the previous edition is exhausted, the originator may have the court set a time limit for the publication of a new edition, failing which the publisher forfeits such rights.

IV. Publication and sale

Art. 384

1 The publisher is obliged to publish the work in an appropriate format without abridgment, addition or alteration, to take reasonable steps to publicise the work and to devote the customary resources in order to promote sales thereof. 2 He must fix the price at his discretion but not so high as to hinder sales of the work.

V. Improvements and corrections

Art. 385

1 The author retains the right to correct and improve his work provided this does not prejudice the interests or increase the liability of the publisher, but must compensate the publisher for any unforeseen costs incurred as a result. 2 The editor may not produce a new version, edition or print run of the work without having previously given the author the opportunity to improve it.

VI. Collected and separate editions

Art. 386

1 The right to publish different works by the same author separately does not entail the right to publish them together in collected edition. 2 Similarly, the right to publish the complete works of an author or all of his works in a given genre does not give the publisher the right to publish the individual works separately.

VII. Translation rights

Art. 387

Unless otherwise agreed with the publisher, the originator retains the exclusive right to commission a translation of the work.

VIII. Author’s remuneration

1. Amount

Art. 388

1 The originator is deemed entitled to remuneration where in the circumstances the presumption is that publication of the work would necessarily involve such remuneration. 2 The amount thereof is fixed by the court on the basis of expert opinion. 3 Where the publisher is entitled to produce several editions, the presumption is that the level of remuneration and the other terms and conditions for subsequent editions are the same as for the first edition.

2. Due date for payment, record of sales and compl

Art. 389

1 The remuneration is payable as soon as the complete work or, in the case of works appearing in separate parts (volumes, fascicles, issues), each part thereof is printed and ready for distribution. 2 Where the remuneration is made partly or entirely contingent on expected sales, the publisher is obliged to produce the customary record of sales with corroborating documentation. 3 Unless otherwise agreed, the originator is entitled to receive the customary number of complimentary copies.

C. Termination

I. Destruction of the work

Art. 390

1 If the work is destroyed by chance after delivery to the publisher, he remains obliged to pay the author’s remuneration. 2 If the author has a second copy of the destroyed work, he must make it available to the publisher, and otherwise he must recreate the work where this is possible with little effort. 3 In either case he is entitled to appropriate compensation.

II. Destruction of the edition

Art. 391

1 If an edition already produced by the publisher is partly or entirely destroyed by chance prior to its distribution, the publisher is entitled to replace the destroyed copies at his own expense without giving rise to a claim for additional remuneration on the part of the originator. 2 The publisher is obliged to replace the destroyed copies where this is possible without disproportionate expense.

III. Grounds for termination pertaining to the per

Art. 392

1 The contract is extinguished on the death or incapacity of the author before the work is completed or in the event that the author is prevented from completing it through no fault of his own. 2 By way of exception, the court may authorise the full or partial continuation of the contract, where this is deemed both feasible and equitable, and order any necessary measures. 3 In the event of the publisher’s bankruptcy, the originator may entrust the work to another publisher unless he is furnished with security for performance of the publishing obligations not yet due at the time bankruptcy proceedings were commenced.

D. Work on a project originated by the publisher

Art. 393

1 Where one or more authors accept a commission to work on a project originated by a publisher, they are entitled only to the agreed remuneration. 2 The publisher owns the copyright to the work as a whole.

Title Thirteen: The Mandate

Section One: The Simple Mandate

A. Definition

Art. 394

1 A mandate is a contract whereby the mandatee undertakes to conduct certain business or provide certain services in accordance with the terms of the contract. 2 Contracts for the provision of work or services not covered by any other specific type of contract are subject to the provisions governing mandates. 3 Remuneration is payable where agreed or customary.

B. Creation

Art. 395

A mandate is deemed to have been accepted where it has not been declined immediately and relates to business which is conducted by the mandatee by official appointment or on a professional basis or for which he has publicly offered his services.

C. Effects

I. Scope of the mandate

Art. 396

1 Unless expressly defined, the scope of the mandate is determined by the nature of the business to which it relates. 2 In particular, it includes the authority to carry out such transactions as are required for performance of the mandate. 3 The mandatee requires special authority to agree a settlement, accept an arbitration award, accept liabilities under a bill of exchange, alienate or encumber land or make gifts.

Para. 3 — Amended by Annex 1 No II 5 of the Civil Procedure Code of 19 Dec. 2008, in force since 1 Jan. 2011 (AS 2010 1739; BBl 2006 7221).

II. Obligations of the mandatee

1. Compliance with instructions

Art. 397

1 A mandatee who has received instructions from the mandator on how to conduct the business entrusted to him may deviate from them only to the extent that circumstances prevent him from obtaining the mandator’s permission and that he may safely assume such permission would have been forthcoming had the mandator been aware of the situation. 2 Where such conditions are not satisfied and the mandatee nevertheless deviates from the mandator’s instructions to the latter’s detriment, the mandate is deemed to have been performed only if the mandatee accepts liability for the resultant damage.

1bis. Duty to notify

Art. 397a

If it is anticipated that the mandator will become permanently incapable of judgement, the mandatee must notify the adult protection authority at the mandator's domicile if such notification appears appropriate in order to safeguard the interests concerned.

Art. 397a — Inserted by Annex No 10 of the FA of 19 Dec. 2008 (Adult Protection, Law of Persons and Law of Children), in force since 1 Jan. 2013 (AS 2011 725; BBl 2006 7001).

2. Faithful performance

a. In general

Art. 398

1 The mandatee generally has the same duty of care as the employee in an employment relationship. 2 The mandatee is liable to the mandator for the diligent and faithful performance of the business entrusted to him. 3 He must conduct such business in person unless authorised or compelled by circumstance to delegate it to a third party or where such delegation is deemed admissible by custom.

Para. 1 — Amended by No II Art. 1 No 7 of the FA of 25 June 1971, in force since 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Final and Transitional Provisions of Title X, at the end of this Code.

b. In the event of delegation

Art. 399

1 A mandatee who has delegated the business entrusted to him to a third party without authority is liable for the latter’s actions as if they were his own. 2 Where such delegation was authorised, he is liable only for any failure to act with due diligence when selecting and instructing the third party. 3 In both cases, claims held by the mandatee against the third party may be enforced by the mandator directly against the third party.

3. Account of agency

Art. 400

1 The mandatee is obliged at the mandator’s request, which may be made at any time, to give an account of his activities under the mandate and to return anything received for whatever reason as a result of such activities. 2 He must pay interest on any sums which he is late in forwarding to the mandator.

4. Transfer of acquired rights

Art. 401

1 Where the mandatee acting on the mandator’s behalf acquires claims in his own name against third parties, such claims pass to the mandator provided he has fulfilled all his obligations towards the mandatee under the mandate relationship. 2 The same applies in relation to the mandatee’s assets if the mandatee is bankrupt. 3 Similarly, where the mandatee is bankrupt, the mandator may claim chattels of which the mandatee took possession in his own name but on the mandator’s behalf, subject to the mandatee’s own rights of lien.

III. Obligations of the mandator

Art. 402

1 The mandator is obliged to reimburse the mandatee for expenses incurred in the proper performance of the mandate plus interest and to release him from obligations entered into. 2 The mandator must also compensate the mandatee for any damage incurred in performance of the mandate unless the mandator can prove that the damage occurred through no fault of his own.

IV. Liability of joint mandators and mandatees

Art. 403

1 Where several persons conclude a mandate as mandators, they are jointly and severally liable to the mandatee. 2 Where several persons conclude a mandate as mandatees, they are jointly and severally liable to the mandator and, save to the extent they are authorised to delegate to third parties, may commit the mandator only through joint action.

D. Termination

I. Grounds

1. Revocation, termination

Art. 404

1 The mandate may be revoked or terminated at any time by either party. 2 However, a party doing so at an inopportune juncture must compensate the other for any resultant damage.

2. Death, incapacity, bankruptcy

Art. 405

1 Unless otherwise agreed or implied by the nature of the business, the mandate ends on loss of capacity to act, bankruptcy, death or declaration of presumed death of the mandator or the mandatee. 2 However, where termination of the mandate jeopardises the mandator’s interests, the mandatee, his heir or his representative is obliged to continue conducting the business until such time as the mandator, his heir or his representative is able to conduct it himself.

Para. 1 — Amended by Annex No 10 of the FA of 19 Dec. 2008 (Adult Protection, Law of Persons and Law of Children), in force since 1 Jan. 2013 (AS 2011 725; BBl 2006 7001).

II. Effects of extinction of the contract

Art. 406

Actions taken by the mandatee before he became aware of the termination of the mandate are binding on the mandator or his heir as if the contract had still been in force.

Section Onebis :The Marriage or Partnership Broker

Inserted by Annex No 2 to the FA of 26 June 1998, in force since 1 Jan. 2000 (AS 1999 1118; BBl 1996 I 1).

A. Definition and applicable law

Art. 406a

1 A person accepting a mandate to broker a marriage or partnership undertakes, in exchange for remuneration, to introduce the mandator to persons who are potential spouses or long-term partners. 2 The provisions governing simple mandates are applicable by way of supplement to marriage or partnership brokerage mandates.

B. Introduction of or to foreign nationals

I. Costs of return journey

Art. 406b

1 Where the person to be introduced travels from or to a foreign destination, the mandatee must reimburse the costs of the return journey if this takes place within six months of arrival. 2 Where the local authority has borne such costs, it is subrogated to the claim held by the person introduced against the mandatee. 3 The mandatee may claim reimbursement of such travel costs from the mandator only up to the maximum amount stipulated in the contract.

II. Duty to obtain a licence

Art. 406c

1 Professional marriage and partnership brokerage activities involving foreign nationals require a licence issued by the authority designated by cantonal law and are regulated by that authority. 2 The Federal Council shall issue the implementing provisions and determine in particular: a. the requirements for and term of the licence; b. the penalties imposed on the mandatee in the event of non-compliance; c. the obligation of the mandatee to furnish security for the costs of repatriating persons introduced under the mandate.

C. Form and content

Art. 406d

The contract must be done in writing and contain the following information: 1. the name and address of each party; 2. the number and nature of the services that the mandatee undertakes to provide and the amount of the remuneration and costs, in particular registration fees, corresponding to each service; 3. the maximum amount owed to the mandatee by way of reimbursement for his defraying the costs of return journeys of persons travelling to or from foreign countries (Art. 406b); 4. the terms of payment; 5. the right of the mandator to give written notice of the revocation of his offer to enter into the contract or of his acceptance of the offer without compensation within 14 days; 6. the stipulation that the mandatee is prohibited from accepting any payment before the 14-day period has expired; 7. the right of the mandator to terminate the contract at any time, subject to any liability in damages arising from termination at an inopportune juncture.

let. 5 — Amended by No I of the FA of 19 June 2015 (Revision of the right of revocation), in force since 1 Jan. 2016 (AS 2015 4107; BBl 2014 921 2993). let. 6 — Amended by No I of the FA of 19 June 2015 (Revision of the right of revocation), in force since 1 Jan. 2016 (AS 2015 4107; BBl 2014 921 2993).

D. Entry into force, revocation, notice of termina

Art. 406e

1 The contract does not become binding on the mandator until 14 days after he receives a duplicate signed by both parties. The mandatee must not accept any payment from the mandator before the 14-day period has expired. 2 During the period under paragraph 1, the mandator may give written notice of the revocation of his offer to enter into the contract or of his acceptance of the offer. Any advance waiver of this right is invalid. In addition, the provisions on the consequences of revocation (Art. 40f) apply mutatis mutandis. 3 Notice of termination must be done in writing.

Art. 406e — Amended by No I of the FA of 19 June 2015 (Revision of the right of revocation), in force since 1 Jan. 2016 (AS 2015 4107; BBl 2014 921 2993).

E. ...

Art. 406f

Repealed by No I of the FA of 19 June 2015 (Revision of the right of revocation), with effect from 1 Jan. 2016 (AS 2015 4107; BBl 2014 921 2993).

F. Information and data protection

Art. 406g

1 Before the contract is signed and throughout its duration, the mandatee must inform the mandator of any particular difficulties pertaining to the latter’s personal circumstances that might arise in the performance of the obligations thereunder. 2 When processing the mandator’s personal data, the mandatee is bound by a duty of discretion; the provisions of the Data Protection Act of 25 September 2020 apply.

Para. 2 — SR 235.1 Para. 2 — Amended by Annex 1 No II 18 of the Data Protection Act of 25 Sept. 2020, in force since 1 Sept. 2023 (AS 2022 491; BBl 2017 6941).

G. Reduction

Art. 406h

Where excessive remuneration or expenses have been agreed, the mandator may apply to the court to reduce these to an appropriate amount.

Section Two: The Letter of Credit and the Loan Aut

A. Letter of credit

Art. 407

1 The provisions governing mandates and payment instructions are applicable to letters of credit in which the principal instructs the addressee to pay a specified person the sums requested by the latter, whether or not a maximum amount is stipulated. 2 Where the letter of credit does not stipulate a maximum amount and obviously disproportionate amounts are requested, the addressee must notify the principal and withhold payment pending further instructions. 3 The instruction conveyed by means of a letter of credit is deemed to have been accepted only where acceptance of a specified amount has been declared.

B. Loan authorisation

I. Definition and form

Art. 408

1 Where a person has received and accepted a mandate to grant or renew a loan to a third party in his own name and for his own account but on the authorisation of the mandator, the mandator is liable for the payee’s obligation in the same manner as a surety, provided that the mandatee has not exceeded his authority. 2 The mandator incurs such liability only where the authorisation was given in writing.

II. Incapacity of payee to enter into a contract

Art. 409

The mandator may not plead as defence against the mandatee the fact that the payee did not have personal capacity to enter into the contract.

III. Payment extension granted on own authority

Art. 410

The mandator ceases to be liable for the obligation where the mandatee has on his own authority granted the payee an extension of the term of payment or has neglected to proceed against him as instructed by the mandator.

IV. Borrower and principal

Art. 411

The legal relationship between the mandator and the third party granted a loan is subject to the provisions governing the legal relationship between the surety and the principal debtor.

Section Three: The Brokerage Contract

A. Definition and form

Art. 412

1 A brokerage contract is a contract whereby the broker is given the mandate to arrange an opportunity to conclude a contract or to facilitate the conclusion of a contract in exchange for a fee. 2 The brokerage contract is generally subject to the provisions governing simple mandates.

B. Broker’s fee

I. When due

Art. 413

1 The broker’s fee becomes payable as soon as the information he has given or the intermediary activities he has carried out result in the conclusion of the contract. 2 Where the contract is concluded subject to a condition precedent, the fee becomes due only once such condition has been satisfied. 3 Where there is a contractual undertaking to reimburse the broker’s expenses, the broker may request such reimbursement even if the transaction fails to materialise.

II. Fixing the fee

Art. 414

Where the amount of remuneration is not stipulated, the parties are deemed to have agreed a fee determined by the tariff of fees, where such exists, and otherwise by custom.

III. Forfeiture

Art. 415

Where the broker acts in the interests of a third party in breach of the contract or procures a promise of remuneration from such party in circumstances tantamount to bad faith, he forfeits his right to a fee and to any reimbursement of expenses.

IV. ...

Art. 416

Repealed by Annex No 2 to the FA of 26 June 1998, with effect from 1 Jan. 2000 (AS 1999 1118; BBl 1996 I 1).

V. Excessive fees

Art. 417

Where an excessive fee has been agreed for identifying an opportunity to conclude or for facilitating the conclusion of an individual employment contract or a purchase of immovable property, on application by the debtor the court may reduce the fee to an appropriate amount.

Art. 417 — Amended by No II, Art. 1, No 8 of the FA of 25 June 1971, in force since 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Final and Transitional Provisions of Title X, at the end of this Code.

C. Reservation of cantonal law

Art. 418

The cantons reserve the right to enact special regulations governing stockbrokers, official brokers and employment agencies.

Section Four: The Agency Contract

Inserted by No I of the FA of 4 Feb. 1949, in force since 1 Jan. 1950 (AS 1949 I 802; BBl 1947 III 661). See also the Final and Transitional Provisions of Title XIII, at the end of this Code.

A. General

I. Definition

Art. 418a

1 An agent is a person who undertakes to act on a continuous basis as an intermediary for one or more principals in facilitating or concluding transactions on their behalf and for their account without entering into an employment relationship with them. 2 Unless otherwise agreed in writing, the provisions of this Section also apply to persons acting as agents by way of secondary occupation. The provisions governing del credere, prohibition of competition and termination of contracts for good cause may not be excluded to the detriment of the agent.

Para. 1 — Amended by No II Art. 1 No 8 and 9 of the FA of 25 June 1971, in force since 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Final and Transitional Provisions of Title X, at the end of this Code.

II. Applicable law

Art. 418b

1 The provisions governing brokerage contracts apply by way of supplement to agents acting as intermediaries and those governing commissions apply by way of supplement to agents acting as proxies. 2 ...

Para. 2 — Repealed by No 1 let. b of the Annex to the FA of 18 Dec. 1987 on Private International Law (IPLA ), with effect from 1 Jan. 1989 (AS 1988 1776; BBl 1983 I 263).

B. Obligations of the agent

I. General and del credere

Art. 418c

1 The agent must safeguard the principal’s interests with the diligence of a prudent businessman. 2 Except where otherwise agreed in writing, the agent may also act for other principals. 3 He may assume liability for the client’s payment or any other type of performance of the client’s obligations or for all or part of the costs of recovering receivables only by means of a written undertaking. The agent thereby acquires an inalienable entitlement to adequate special remuneration.

II. Duty of discretion and prohibition of competit

Art. 418d

1 The agent must not exploit or reveal the principal’s trade secrets with which he has been entrusted or of which he became aware by reason of the agency relationship even after the end of the commercial agency contract. 2 The provisions governing service contracts apply mutatis mutandis to a contractual prohibition of competition. Where such a prohibition has been agreed, on termination of the contract the agent has an inalienable entitlement to adequate special remuneration.

C. Powers of representation

Art. 418e

1 The agent is considered to be authorised only to facilitate transactions, to receive notices of defects and other declarations whereby clients exercise or reserve their rights in respect of defective performance by the principal, and to exercise the principal’s rights to secure evidence thereof. 2 By contrast, the agent is not considered to be authorised to accept payments, to grant time limits for payments or to agree other modifications of the contract with clients. 3 Articles 34 and 44 paragraph 3 of the Federal Act of 2 April 1908 on Insurance Policies are reserved.

Para. 3 — SR 221.229.1

D. Obligations of the principal

I. In general

Art. 418f

1 The principal must do everything in his power to enable the agent to perform his activities successfully. In particular, he must furnish the agent with the necessary documentation. 2 He must notify the agent immediately if he anticipates that the number and/or volume of transactions that will be possible or desirable is likely to be substantially smaller than was agreed or to be expected in the circumstances. 3 Where a particular area or clientele is allocated to the agent, it is allocated to him exclusively unless otherwise agreed in writing.

II. Commission

1. On business facilitated and concluded

a. Scope and entitlement

Art. 418g

1 The agent is entitled to the agreed or customary commercial agent’s commission or sales commission on all transactions that he facilitated or concluded during the agency relationship and, unless otherwise agreed in writing, on transactions concluded during the agency relationship by the principal without the agent’s involvement but with clients acquired by him for transactions of that kind. 2 An agent to whom a particular area or clientele has been allocated exclusively is entitled to the agreed commission or, in the absence of such an agreement, the customary commission on all transactions concluded during the agency relationship with clients belonging to that area or clientele. 3 Unless otherwise agreed in writing, the entitlement to the commission is established as soon as the transaction has been validly concluded with the client.

b. Lapse of entitlement

Art. 418h

1 The agent’s entitlement to commission lapses subsequently where the execution of a concluded transaction is prevented for reasons not attributable to the principal. 2 By contrast, the agent is not entitled to any commission where no consideration is given in return for the principal's performance, or where the consideration is so limited that the principal cannot reasonably be expected to pay any commission.

c. Due date

Art. 418i

Unless otherwise provided by agreement or custom, the commission falls due at the end of the calendar half-year in which the transaction was concluded, whereas in insurance business the commission falls due when the first annual premium has been paid.

d. Statement of commission

Art. 418k

1 Where the agent is not obliged by written agreement to draw up a statement of commission, the principal must provide him with a written statement as at each due date indicating the transactions on which commission is payable. 2 On request, the agent must be granted access to the books of account or supporting documents that are relevant to such statement. The agent may not waive this right in advance.

2. Collection commission

Art. 418l

1 Unless otherwise provided by agreement or custom, the agent is entitled to a collection commission on any amounts he collects and delivers to the principal in accordance with the latter’s instructions. 2 At the end of the agency relationship the agent loses his authority to collect payments and his entitlement to further collection commission.

III. Inability to work

Art. 418m

1 The principal is obliged to pay the agent appropriate compensation if, in breach of his legal or contractual obligations, he is at fault in preventing the agent from earning the volume of commission that was agreed or to be expected in the circumstances. Any agreement to the contrary is void. 2 Where an agent who is permitted to represent only one principal at a time is prevented from working through no fault of his own by illness, Swiss compulsory military service or similar reasons, he is entitled for a relatively short period to adequate compensation for loss of income, provided the commercial agency contract has lasted for at least one year. The agent may not waive this right in advance.

IV. Costs and expenses

Art. 418n

1 Unless otherwise provided by agreement or custom, the agent is not entitled to reimbursement of costs and expenses incurred in the normal performance of his duties, but is entitled to reimbursement of those incurred as a result of special instructions issued by the principal or in the capacity of agent without authority for the principal, such as freight charges and customs duties. 2 The duty to reimburse costs and expenses obtains even where the transaction fails to materialise.

V. Special lien

Art. 418o

1 By way of securing claims due to him under the commercial agency relationship and, in the event that the principal becomes insolvent, claims that are not yet due, the agent has a special lien on chattels and securities that he holds pursuant to the contract and on any payments received from clients by virtue of an authority to collect with which he has been vested, and this right of lien may not be waived in advance. 2 The lien does not extend to price lists and client lists.

E. Termination

I. Expiry of duration

Art. 418p

1 Where the commercial agency contract was concluded for a fixed term or its duration is limited by virtue of its purpose, it ends without notice on expiry of that term. 2 Where a fixed-term commercial agency contract is tacitly extended by both parties on expiry of its duration, it is deemed to have been renewed for the same duration subject to a maximum of one year. 3 Where termination is subject to prior notice, failure by both parties to give notice is deemed tacit renewal of the contract.

II. Notice of termination

1. In general

Art. 418q

1 Where the commercial agency contract was not concluded for a fixed term and its duration is not limited by virtue of its purpose, it may be terminated by either party during the first year of the contract by giving one month’s notice expiring at the end of the following calendar month. Any agreement of a shorter notice period must be done in writing. 2 Where the contract has lasted for at least one year, it may be terminated by giving two months’ notice expiring at the end of a calendar quarter. However, the parties may agree a longer notice period or a different termination date. 3 The notice period must be the same for both the principal and the agent.

2. For good cause

Art. 418r

1 The principal and the agent may at any time terminate the contract with immediate effect for good cause. 2 The provisions governing service contracts apply mutatis mutandis.

III. Death, incapacity, bankruptcy

Art. 418s

1 The agency relationship ends on the death or incapacity of the agent or the bankruptcy of the principal. 2 Where in essence the agency relationship was entered into with the principal in person, it ends on his death.

IV. Claims of the agent

1. Commission

Art. 418t

1 Unless otherwise provided by agreement or custom, the agent is entitled to commission on orders subsequently placed by a client acquired by him during the agency relationship only if such orders are placed before the end of the commercial agency contract. 2 On termination of the agency relationship, all the agent’s claims for commission or reimbursement of expenses fall due. 3 A later due date may be agreed in writing for commission on transactions to be performed in full or in part after the agency relationship has ended.

2. Compensation for clientele

Art. 418u

1 Where the agent’s activities have resulted in a substantial expansion of the principal’s clientele and considerable benefits accrue even after the end of the agency relationship to the principal or his legal successor from his business relations with clients acquired by the agent, the agent or his heirs have an inalienable claim for adequate compensation, provided this is not inequitable. 2 The amount of such claim must not exceed the agent’s net annual earnings from the agency relationship calculated as the average for the last five years or, where shorter, the average over the entire duration of the contract. 3 No claim exists where the agency relationship has been dissolved for a reason attributable to the agent.

V. Duty of restitution

Art. 418v

By the time the agency relationship ends, each contracting party must return to the other everything received from him or from third parties for his account during the relationship. The contracting parties’ rights of lien are unaffected.

Title Fourteen: Agency without Authority

A. Rights and obligations of the agent

I. Manner of execution

Art. 419

Any person who conducts the business of another without authorisation is obliged to do so in accordance with his best interests and presumed intention.

II. Liability of the agent in general

Art. 420

1 The agent is liable for negligence. 2 However, where the agent acted in order to avert imminent damage to the principal, his liability is judged more leniently. 3 Where agency activities are carried out against the express or otherwise recognisable will of the principal and the prohibition was neither immoral nor illegal, the agent is also liable for chance occurrences unless he can prove that they would have occurred even without his involvement.

III. Liability of agents lacking capacity to enter

Art. 421

1 Where the agent lacked the capacity to enter into contractual commitments, he is liable for his agency activities only to the extent that he is enriched or alienated the enrichment in bad faith. 2 Further liability in tort is reserved.

B. Position of the principal

I. Agency in the principal’s best interests

Art. 422

1 Where agency activities were in the best interests of the principal, he is obliged to reimburse the agent for all expenses that were necessary or useful and appropriate in the circumstances plus interest, to release him to the same extent from all obligations assumed and to compensate him at the court’s discretion for any other damage incurred. 2 Provided the agent acted with all due care, the claim accrues to him even if the intended outcome was not achieved. 3 Where the agent’s expenses are not reimbursed, he has the right of repossession in accordance with the provisions governing unjust enrichment.

II. Business conducted in the agent’s interests

Art. 423

1 Where agency activities were not carried out with the best interests of the principal in mind, he is nonetheless entitled to appropriate any resulting benefits. 2 The principal is obliged to compensate the agent and release him from obligations assumed only to the extent the principal is enriched.

III. Approval of agency activities

Art. 424

Where the agent’s actions are subsequently approved by the principal, the provisions governing mandates become applicable.

Title Fifteen: The Commission Contract

A. Buying and selling commission

I. Definition

Art. 425

1 A buying or selling commission agent is a person who, in return for a commission, buys or sells chattels or securities in his own name but for the account of another (the principal). 2 The provisions governing mandates apply to the commission agency relationship, unless otherwise provided in this Title.

II. Obligations of the commission agent

1. Duty of notification, insurance

Art. 426

1 The commission agent must keep the principal informed and in particular must notify him immediately of the performance of the commission contract. 2 He is obliged to insure the goods on commission only where so instructed by the principal.

2. Treatment of goods on commission

Art. 427

1 Where the goods for sale on commission are evidently defective, the commission agent must safeguard the rights of recourse against the carrier, secure evidence of the defective condition of the goods, preserve the goods where possible and notify the principal immediately. 2 If the commission agent omits to fulfil these obligations, he is liable for any damage caused by such omission. 3 Where there is a risk that the goods for sale on commission will rapidly deteriorate, the commission agent has the right and, should the interests of the principal so require, the obligation to arrange their sale with the assistance of the competent authority of the place where the goods are located.

3. Pricing by the principal

Art. 428

1 Where the commission agent sells goods below the minimum price instructed, he is liable to the principal for the difference unless he can prove that such sale averted damage that the principal would otherwise have incurred and that he was unable to seek the principal’s instructions in the time available. 2 Furthermore, where the commission agent is at fault, he must compensate the principal for any other damage caused by the breach of contract. 3 Where the commission agent buys at a lower price or sells at a higher price than instructed by the principal, he is not permitted to retain the profit but must credit it to the principal.

4. Advances and loans to third parties

Art. 429

1 A commission agent who makes cash advances or extends credit to a third party without the consent of the principal does so at his own risk. 2 However, where sale on credit is the customary commercial practice at the place of sale, the commission agent is entitled to sell on credit unless the principal has instructed otherwise.

5. Del credere

Art. 430

1 Except where he extends credit without authority, the commission agent is liable for the debtor’s payment or performance of other obligations only to the extent that he has expressly assumed such liability or if this is a customary commercial practice at his place of business. 2 A commission agent who assumes liability for performance by the debtor is entitled to special remuneration (del credere commission).

III. Rights of the commission agent

1. Reimbursement of advances and expenses

Art. 431

1 The commission agent is entitled to reimbursement of all advances, expenses and other costs incurred on the principal’s behalf plus interest on all such amounts. 2 He may also claim remuneration for storage and transport costs, though not for the wages of his employees.

2. Commission

a. Entitlement

Art. 432

1 The commission agent is entitled to commission on execution of the transaction or failure to execute it for a reason attributable to the principal. 2 In the case of transactions that could not be executed for other reasons, the commission agent is entitled to remuneration for his endeavours only to the extent provided for by local custom.

b. Forfeiture and conversion into transaction for

Art. 433

1 The commission agent forfeits his right to commission if he has acted improperly towards the principal and in particular if he has secured an inflated purchase price or a deflated sale price. 2 Moreover, in both these cases the principal has the right to take action against the commission agent himself as buyer or seller.

3. Special lien

Art. 434

The commission agent has a special lien in respect of the goods on commission and the sale proceeds.

4. Sale of goods at auction

Art. 435

1 Where the goods on commission remain unsold or the order to sell is withdrawn and the principal fails to take them back or otherwise dispose of them within a reasonable time, the commission agent may apply to the competent authority at the place where the goods are located to arrange to have them sold at auction. 2 The auction may be ordered without first hearing the principal if neither he nor a representative is present at that location. 3 However, official notice must be served on the principal before the auction is held, unless the goods in question are susceptible to rapid deterioration.

5. Agent acting for his own account

a. Pricing and commission

Art. 436

1 Unless otherwise instructed by the principal, a commission agent instructed to buy or sell goods, bills of exchange or other securities with a quoted exchange or market price is entitled, in his own capacity as seller, to deliver the goods he is instructed to buy or, in his own capacity as buyer, to purchase the goods he is instructed to sell. 2 In both cases, the commission agent must account for the exchange or market price that applied at the time the instruction was executed and is entitled to both the usual commission and reimbursement of the expenses normally incurred in commission business. 3 In other respects the transaction is treated as a contract of sale.

b. Presumption of trading for own account

Art. 437

Where the commission agent is permitted to act for his own account and he notifies the principal that the instruction has been executed without naming another person as buyer or seller, the presumption is that he himself has assumed the obligations of the buyer or seller.

c. Lapse of right to trade for own account

Art. 438

The commission agent is not permitted to act as buyer or seller if the principal has withdrawn his mandate and the notice of withdrawal reached the commission agent before he dispatched the notice of execution.

B. Forwarding contract

Art. 439

A forwarding agent or carrier who in return for payment undertakes to carry or forward goods for the consignor’s account but in his own name is regarded as a commission agent but is subject to the provisions governing contracts of carriage in relation to the forwarding of the goods.

Title Sixteen: The Contract of Carriage

A. Definition

Art. 440

1 A carrier is a person who undertakes to transport goods in return for payment (freight charge). 2 The provisions governing mandates apply to contracts of carriage unless otherwise provided in this Title.

B. Effects

I. Obligations of the carrier

1. Required information

Art. 441

1 The consignor must give the carrier precise details of the address of the consignee and the place of delivery, the number, type of packaging, weight and content of packages, the delivery date and the transport route, as well as the value of any valuable objects. 2 The consignor is liable for any detriment arising from missing or inaccurate details.

2. Packaging

Art. 442

1 The consignor ensures that the goods are properly packaged. 2 He is liable for the consequences of defects in packaging that are not externally apparent. 3 By contrast, the carrier is liable for the consequences of defects that were externally apparent if he accepted the goods without reservation.

3. Power of disposal over freight

Art. 443

1 While the goods are in the carrier’s possession, the consignor has the right to reclaim them against compensation for the carrier for expenses incurred and any detriment resulting from their repossession, except where: 1. a bill of lading has been issued by the consignor and delivered to the consignee by the carrier; 2. the consignor has arranged for an acknowledgement of receipt to be issued by the carrier and cannot return it; 3. the carrier has sent the consignee written notice that the goods have arrived and are ready for collection; 4. the consignee has requested delivery of the goods after they have arrived at destination. 2 In these cases the carrier is obliged to comply solely with the consignee’s instructions, although where the consignor has arranged for an acknowledgement of receipt to be issued by the carrier and the goods have not yet arrived at destination, the carrier is bound by such instructions only if the acknowledgement of receipt has been delivered to the consign

II. Position of the carrier

1. Treatment of freight

a. Delivery not possible

Art. 444

1 Where the goods are rejected, the associated claims remain unpaid or the consignee cannot be contacted, the carrier must inform the consignor and in the interim place the goods in storage or deposit them with a third party at the risk and expense of the consignor. 2 If neither consignor nor consignee disposes of the goods within a reasonable period, in the same manner as a commission agent the carrier may apply to the competent authority at the place where the goods are located to arrange to have them sold in favour of the rightful beneficiary.

b. Sale

Art. 445

1 Where the goods are likely to deteriorate rapidly or their probable value does not cover the associated costs, the carrier must without delay arrange for official confirmation of that fact and may arrange for the sale of the goods in the same manner as when delivery is not possible. 2 Where possible, the interested parties must be informed that such sale has been ordered.

c. Liability

Art. 446

When exercising the rights conferred on him with regard to the handling of the goods, the carrier must safeguard the interests of their owner to the best of his ability and is liable in damages for any fault on his part.

2. Liability of the carrier

a. Loss or destruction of the goods

Art. 447

1 If the goods are lost or destroyed, the carrier must compensate their full value unless he can prove that the loss or destruction resulted from the nature of the goods or through the fault of the consignor or the consignee or occurred as a result of instructions given by either or of circumstances which could not have been prevented even by the diligence of a prudent carrier. 2 The consignor is deemed to be at fault if he fails to inform the carrier of any especially valuable freight goods. 3 Agreements stipulating an interest in excess of the full value of the goods or an amount of compensation lower than their full value are reserved.

b. Delay, damage, partial destruction

Art. 448

1 Subject to the same conditions and reservations as apply to the loss or destruction of goods, the carrier is liable for any damage resulting from late delivery, damage in transit or the partial destruction of the goods. 2 Unless specifically agreed otherwise, the damages claimed may not exceed those for total loss.

c. Liability for sub-contractors

Art. 449

The carrier is liable for all accidents and errors occurring during the carriage of goods, regardless of whether he transports them to the final destination or sub-contracts the task to another carrier, subject to right of recourse against the sub-contractor to whom goods are entrusted.

3. Duty of notification

Art. 450

The carrier must notify the consignee immediately on arrival of the goods.

4. Lien

Art. 451

1 Where the consignee disputes claims attaching to the goods, he may demand delivery only if the disputed amount is deposited with the court. 2 The deposited amount replaces the goods with regard to the carrier’s lien.

5. Forfeiture of liability claims

Art. 452

1 Unconditional acceptance of the goods and payment of the freight charge extinguish all claims against the carrier, except in cases of deliberate deceit or gross negligence. 2 Furthermore, the carrier remains liable for damage that is not externally apparent where such damage is discovered within the time in which, in the circumstances, the consignee was able or might reasonably be expected to inspect the goods, provided he notifies the carrier immediately on discovering such damage. 3 However, such notification must be given no later than eight days after delivery.

6. Procedure

Art. 453

1 In any dispute, the competent authority at the place where the goods are located may, at the request of either party, order that the goods be deposited with a third party or, where necessary, sold after their condition has been established. 2 The sale may be forestalled by satisfying all claims allegedly attaching to the goods or by depositing the amount of such claims with the court.

7. Prescription of actions for damages

Art. 454

1 Actions for damages against the carrier prescribe one year after the scheduled delivery date in the case of destruction, loss or delay and one year after the date on which the goods were delivered to the consignee in the case of damage. 2 The consignee and the consignor may always assert their claims against the carrier by way of defence, provided that objections are lodged within one year and that the claim is not extinguished by acceptance of the goods. 3 The above does not apply to cases of malice or gross negligence on the part of the carrier.

C. State-owned and licensed carriers

Art. 455

1 Carriers operating under state licence are not empowered to exclude or restrict in advance the application of the provisions governing the carrier’s liability to their own benefit by means of special agreement or regulations governing their operations. 2 However, the parties may derogate contractually from said provisions to the extent permitted by this Title. 3 The special provisions governing contracts for the carriage of goods by providers of postal services, the railways and steamers are unaffected.

Para. 3 — Amended by Annex No II 2 of the Postal Services Act of 17 Dec. 2010, in force since 1 Oct. 2012 (AS 2012 4993; BBl 2009 5181).

D. Use of state transport facilities

Art. 456

1 Any carrier or forwarding agent who uses a state transport facility to perform carriage obligations he has assumed or who assists in the carriage of goods by such a facility is subject to the special provisions governing freight transport that apply to that facility. 2 However, any agreement to the contrary between the carrier or forwarding agent and the principal is unaffected. 3 This article does not apply to road hauliers.

E. Liability of the forwarding agent

Art. 457

A forwarding agent who uses a state transport facility in order to perform obligations under a contract of carriage may not deny liability on grounds of insufficient right of recourse where right of recourse was forfeited through his own fault.

Title Seventeen: Registered Power of Attorney and

A. Registered power of attorney

I. Definition and conferral

Art. 458

1 A registered attorney is a person who has been expressly or tacitly granted the authority to conduct operations and to sign per procuration on behalf of a trading, manufacturing or other commercial business by its owner. 2 The owner of the business must give notice of the granting of the power of attorney for entry in the commercial register but is bound by the actions of the registered attorney even before it is entered. 3 The granting of authority to conduct other kinds of business or transactions also requires entry of the attorney in the commercial register.

II. Scope of authority

Art. 459

1 In dealings with bona fide third parties, the registered attorney is deemed authorised to commit the owner of the business by signing bills of exchange and to carry out on his behalf all types of transaction that fall within the scope of the commercial operations and business affairs of the owner. 2 The registered attorney is not authorised to alienate or encumber immovable property unless expressly vested with such powers.

III. Restrictions

Art. 460

1 The registered power of attorney may be limited to the business affairs of a specific branch. 2 It may be conferred on two or more persons collectively (joint power of attorney) such that the signature of one attorney is not binding on the principal unless others participate in the transaction as prescribed. 3 Other limitations of authority have no legal effect on bona fide third parties.

IV. Withdrawal

Art. 461

1 Any withdrawal of the power of attorney must be entered in the commercial register, even where no entry was made of its conferral. 2 As long as such withdrawal has not been registered and published, the registered power of attorney remains in force as against bona fide third parties.

B. Other forms of commercial agency

Art. 462

1 Where the owner of a trading, manufacturing or other commercial establishment appoints a person to represent him in managing the affairs of the business as a whole or in carrying out certain transactions on behalf of the business without granting that person a registered power of attorney, the agency authority of the representative extends to all activities that fall within the normal scope of the commercial operations of the business or are normally connected with the transactions in question. 2 However, a commercial agent is not authorised to sign bills of exchange, take out loans or conduct litigation unless expressly granted such powers.

C. ...

Art. 463

Repealed by No II Art. 6 No 1 of the FA of 25 June 1971, with effect from 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Final and Transitional Provisions of Title X, at the end of this Code.

D. Prohibition of competition

Art. 464

1 A registered attorney or commercial agent appointed to manage the affairs of the business as a whole or employed by the owner of the business may not without the owner’s consent engage in transactions for his own account or that of a third party in the economic sectors in which the owner himself is active. 2 In the event of any violation of this provision, the owner of the business may seek compensation for the resultant damage and appropriate the relevant transactions for his own account.

Para. 1 — Amended by No II Art. 1 No 10 of the FA of 25 June 1971, in force since 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Final and Transitional Provisions of Title X, at the end of this Code.

E. Extinction of power of attorney and other forms

Art. 465

1 The registered power of attorney and authority to act as commercial agent may be revoked at any time without prejudice to rights accruing to the parties concerned under any existing individual contract of employment, partnership agreement, mandate or the like. 2 The death or incapacity of the owner of the business does not extinguish the registered power of attorney or authority to act as commercial agent.

Para. 1 — Amended by No II Art. 1 No 11 of the FA of 25 June 1971, in force since 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Final and Transitional Provisions of Title X, at the end of this Code.

Title Eighteen: The Payment Instruction

A. Definition

Art. 466

By means of a payment instruction, the recipient of the instruction (agent) is authorised to transfer money, securities or other fungibles for the account of the party issuing the instruction (principal) to the payee and the payee is authorised to receive them in his own name.

B. Effects

I. Relations between principal and payee

Art. 467

1 Where the purpose of the payment instruction is to redeem a debt owed by the principal to the payee, the debt is redeemed only once the agent has made the transfer. 2 However, where the payee has accepted a payment instruction, he may assert his claim against the principal only if he called for payment from the agent but did not receive it before expiry of the term stipulated in the payment instruction. 3 A creditor who does not wish to accept a payment instruction received from his debtor must notify the debtor immediately in order to avoid liability in damages.

II. Obligations of the agent

Art. 468

1 An agent who notifies the payee that he accepts the payment instruction unreservedly is obliged to pay the payee and may raise against him only such objections as arise from their personal relationship or from the terms of the payment instruction, not objections arising from his relationship with the principal. 2 An agent who is indebted to the principal is obliged to comply with the payment instruction, provided that in doing so his own position is in no way prejudiced. 3 Even in this case the agent is not obliged to declare his acceptance prior to payment, unless otherwise agreed with the principal.

III. Duty to notify non-payment

Art. 469

Where the agent refuses to make the payment called for by the payee or declares in advance that he will not make it, the payee must notify the principal immediately in order to avoid liability in damages.

C. Revocation

Art. 470

1 The principal may revoke the payment instruction as against the payee unless he issued it in order to redeem a debt to the payee or otherwise in favour of the latter. 2 He may revoke it as against the agent provided the agent has not notified the payee of his acceptance. 2bis Unless the regulations of a payment system provide otherwise, a payment instruction in a cashless transaction becomes irrevocable as soon as the transfer amount is debited from the principal's account. 3 In the event of bankruptcy proceedings against the principal, payment instructions that have not yet been accepted are deemed revoked.

Para. 2bis — Inserted by Annex No 3 of the Uncertificated Securities Act of 3 Oct. 2008, in force since 1 Oct. 2009 (AS 2009 3577; BBl 2006 9315).

D. Payment instructions relating to securities

Art. 471

1 The provisions of this Title apply to payment instructions made out to the bearers of negotiable securities on the premise that each such bearer is considered to be the payee in relation to the agent, whereas the rights as between the principal and the payee are established only in respect of each transferor and transferee. 2 The special provisions governing cheques and payment instructions similar in nature to bills of exchange are unaffected.

Title Nineteen: The Contract of Bailment

A. Bailment in general

I. Definition

Art. 472

1 A contract of bailment is a contract in which the bailee undertakes to take receipt of a chattel entrusted to him by the bailor and to keep it in a safe place. 2 The bailee may claim remuneration only where this has been expressly stipulated or was to be expected in the circumstances.

II. Obligations of the bailor

Art. 473

1 The bailor must reimburse the bailee for expenses incurred in performance of the contract. 2 He is liable to the bailee for damage caused by the bailment unless he can prove that such damage occurred through no fault of his own.

III. Obligations of the bailee

1. Prohibition of use

Art. 474

1 The bailee may not use the deposited chattel without the bailor’s consent. 2 If he does, he must pay the bailor adequate compensation and is liable for any chance occurrence unless he can prove that such occurrence would have affected the chattel in any event.

2. Return

a. Rights of the bailor

Art. 475

1 The bailor may reclaim the bailed chattel together with any growth or accrual thereto at any time, even where a fixed term was agreed for the bailment. 2 However, the bailor must reimburse the bailee for expenses incurred with a view to bailment over the agreed term.

b. Rights of the bailee

Art. 476

1 The bailee may return the bailed chattel before expiry of the stipulated term only where unforeseen circumstances render the bailee unable to keep the chattel safely or without detriment to himself. 2 Where no term was agreed for the bailment, the bailee may return the chattel at any time.

c. Place of return

Art. 477

The bailed chattel is returned at the risk and expense of the bailor at the same place where it was to be kept.

3. Liability of joint bailees

Art. 478

Where several bailees have jointly received a chattel in bailment, they are jointly and severally liable.

4. Third-party rights of title

Art. 479

1 If a third party claims title to the bailed chattel, the bailee remains obliged to return it to the bailor unless it has been attached by court order or the third party has brought action to establish title against the bailor. 2 In this event, the bailee must inform the bailor immediately.

IV. Official receiver

Art. 480

Where two or more persons, with a view to protecting their rights, deposit an object whose legal status is disputed or uncertain in bailment with a third party (official receiver), the latter may return it only with the consent of the interested parties or as directed by the court.

B. Bailment of fungibles

Art. 481

1 Where money is deposited with the express or tacit agreement that the bailee is not obliged to return precisely the same notes and coin but merely the same sum of money, all attendant risks and benefits pass to the bailee. 2 A tacit agreement is presumed if the sum of money was unsealed and open when deposited. 3 Where other fungibles or securities are deposited in bailment, the bailee has power to dispose of them only if expressly authorised so to do by the bailor.

C. Warehousing business

I. Right to issue documents of title to goods

Art. 482

1 A warehouse keeper who publicly offers warehousing services may apply to the competent authority for the right to issue documents of title to the goods kept in storage. 2 These documents of title to goods are securities that confer the right to take delivery of the goods stored. 3 They may be made out to a named person, to order or to bearer.

II. Warehouse keeper’s duty of safe-keeping

Art. 483

1 A warehouse keeper has the same duty of care in relation to stored goods as a commission agent. 2 Where feasible, he must inform the bailor of any changes in the condition of the goods that call for further measures. 3 He must allow the bailor to inspect the goods and to take test samples during business hours and to take measures necessary to preserve the goods at any time.

III. Intermingling of stored goods

Art. 484

1 A warehouse keeper may mix fungibles with other items of the same kind and quality only if expressly authorised so to do. 2 Each bailor may reclaim a number corresponding to his deposit from any goods thus intermingled. 3 The warehouse keeper may make the required division without the involvement of the other bailors.

IV. Rights of the warehouse keeper

Art. 485

1 The warehouse keeper is entitled to the agreed or customary warehouse fee and to reimbursement of all expenses not resulting from the actual storage of the goods (freight charges, customs duties, repairs). 2 Such expenses must be reimbursed immediately, whereas the warehouse fee is payable in arrears for every three months of storage and in any event whenever all or some of the goods are reclaimed. 3 The warehouse keeper’s claims are secured by a lien on the goods, provided he remains in possession of the goods or may dispose of them by means of a document of title to goods.

V. Return of the goods

Art. 486

1 The warehouse keeper has the same obligation to return the goods as an ordinary bailee, except that he remains bound to observe the contractual storage duration even where an ordinary bailee would be entitled to return them sooner owing to unforeseen circumstances. 2 Where a document of title to goods has been issued, the warehouse keeper is entitled and obliged to release the goods only to the beneficiary named therein.

D. Inns, hotels and stables

I. Liability of hoteliers

1. Conditions and scope

Art. 487

1 Innkeepers and hoteliers who provide accommodation for persons not known to them are liable for any damage, destruction or misappropriation of personal effects brought onto the premises by their guests unless they can prove that such damage is attributable to the guest himself or to his visitors, companions or staff or to force majeure or to the nature of the objects in question. 2 However, the liability for personal effects brought onto the premises by guests is subject to an upper limit of 1,000 francs for each guest where no fault can be ascribed to the innkeeper or hotelier or his staff.

2. Specific liability for valuables

Art. 488

1 Where valuables, large sums of money or securities are not deposited with the innkeeper or hotelier, the latter is only liable for them if he or his staff are at fault. 2 Where he accepts or declines the deposit of such items, he is liable for their full value. 3 Where the guest cannot reasonably be expected to deposit such items, the innkeeper or hotelier is liable for them as for the other personal effects of the guest.

3. End of liability

Art. 489

1 The guest’s claims are forfeited if he fails to report any damage to the innkeeper or hotelier immediately. 2 The innkeeper or hotelier may not exempt himself from liability by posting disclaimer notices on the premises or making such liability dependent on conditions not specified in law.

II. Liability of stable owners

Art. 490

1 Owners of stables are liable for any damage, destruction or misappropriation of animals, vehicles and their appurtenances entrusted to or otherwise received by them or by their staff unless they can prove that such damage is attributable to the bailor or his visitors, companions or staff or to force majeure or to the nature of the animals or objects deposited. 2 However, liability for animals, vehicles and appurtenances accommodated in stables is subject to a maximum of 1,000 francs for each bailor where no fault can be ascribed to the stable owner or his staff.

III. Lien

Art. 491

1 Innkeepers, hoteliers and stable owners have a lien on the animals and objects brought onto their premises as security for their claims in connection with accommodation and storage. 2 The provisions governing the landlord’s or lessor’s right of lien apply mutatis mutandis.

Title Twenty: The Contract of Surety

Amended by No 1 of the FA of 10 Dec. 1941, in force since 1 July 1942 (AS 58 279 644; BBl 1939 II 841). See also the Transitional provisions for this Title at the end of this Code.

A. Requirements

I. Definition

Art. 492

1 Under a contract of surety, the surety undertakes as against the creditor of the principal debtor to vouch for performance of the obligation. 2 A contract of surety presupposes the existence of a valid primary obligation. A future or conditional obligation may be guaranteed by means of a contract of surety provided that the primary obligation takes effect. 3 A person standing surety for performance of an obligation resulting from a contract that is not binding on the principal debtor as a result of error or incapacity to make a contract is liable for such obligation, subject to the conditions and doctrines of the law governing surety, if he was aware of the defect vitiating the contract at the time he gave his commitment. The same applies to any person who stands surety for performance of an obligation that is time-barred for the principal debtor. 4 Unless the law provides otherwise, the surety may not waive in advance the rights conferred on him under this Title.

II. Form

Art. 493

1 The contract of surety is valid only where the surety makes a written declaration and indicates in the surety bond the maximum amount for which he is liable. 2 Where the surety is a natural person, his declaration must additionally be done in the form of a public deed in conformity with the rules in force at the place where the instrument is drawn up. Where the liability under surety does not exceed the sum of 2,000 francs, it is sufficient for the surety to indicate the amount for which he is liable and the existence of joint and several liability, if any, in his own hand in the surety bond itself. 3 Contracts of surety in favour of the Confederation or its public institutions or in favour of a canton for the performance of public law obligations, such as customs duties, taxes and the like, and for freight charges merely require the written declaration of the surety and an indication in the surety bond itself of the amount for which he is liable. 4 Where the total liability is divid

III. Spouse’s consent

Art. 494

1 A married person may validly stand as surety only with the written consent of his spouse given in advance or at the latest simultaneously, unless the spouses are separated by court judgment. 2 ... 3 The spouse’s consent to subsequent amendments of a contract of surety is required only where the total liability is to be increased or a simple surety is to be transformed into a joint and several surety, or where the effect of the amendment is to diminish the level of security substantially. 4 The same applies mutatis mutandis to registered partners.

Para. 2 — Repealed by No I of the FA of 17 June 2005 (Sureties. Spouse’s consent), with effect from 1 Dec. 2005 (AS 2005 5097; BBl 2004 4955 4965). Para. 4 — Amended by Annex No 11 to the Same-Sex Partnership Act of 18 June 2004, in force since 1 Jan. 2007 (AS 2005 5685; BBl 2003 1288).

B. Substance

I. Particularities of different types of surety

1. Simple surety

Art. 495

1 The creditor may resort to a simple surety only if, after the surety was provided, the debtor is declared bankrupt or obtains a debt restructuring moratorium, or is the object of debt enforcement proceedings instigated with due diligence by the creditor which have resulted in the issue of a definitive unpaid debt certificate, or has relocated his domicile abroad and can no longer be sued in Switzerland, or legal action against him in foreign courts has been substantially impeded as a result of such relocation. 2 Where the claim is secured by pledges, a simple surety may require that the creditor satisfy his claim first from such pledges, provided the debtor has not been declared bankrupt or obtained a debt restructuring moratorium. 3 Where the surety has undertaken solely to cover any shortfall suffered by the creditor (indemnity bond), he may not be sued unless a definitive unpaid debt certificate has been issued against the principal debtor or the latter has relocated his domicile

2. Joint and several surety

Art. 496

1 Where a person stands surety for an obligation by appending the words “joint and several” or an equivalent phrase, the creditor may resort to him before suing the principal debtor and before realising property given in pledge provided the principal debtor has defaulted on his debt payments and has been issued with payment reminders to no avail or is manifestly insolvent. 2 The creditor may resort to the surety before realising pledged chattels and debts only to the extent that these are deemed by the court unlikely to cover the debt or where such sequence was agreed or where the debtor has been declared bankrupt or obtained a debt restructuring moratorium.

3. Co-surety

Art. 497

1 Where two or more persons stand surety for a single divisible principal obligation, each of them is liable as simple surety for his share and as collateral surety for the shares of the others. 2 Where they have assumed joint and several liability by agreement with the principal debtor or among themselves, each of them is liable for the whole obligation. However, a co-surety may refuse to pay more than his share where debt enforcement proceedings have not been commenced against all other jointly and severally liable co-sureties who entered into the contract of surety before him or at the same time and who may be sued for the obligation in Switzerland. He has the same right if his co-sureties have paid their share or furnished real security. Unless otherwise agreed, a co-surety who has paid his share has a right of recourse against other jointly and severally liable co-sureties to the extent that each of them has not yet paid his share. This right may be exercised before recourse again

4. Collateral surety and counter-surety

Art. 498

1 A collateral surety who stands surety to the creditor for performance of the obligation assumed by the primary surety is liable together with the latter in the same way as a simple surety is liable with the principal debtor. 2 A counter-surety stands surety for the right of recourse against the debtor accruing to the primary surety who honours his commitment.

II. Common provisions

1. Relationship between the surety and the credito

a. Scope of liability

Art. 499

1 In all cases, the surety’s liability is limited to the maximum amount indicated in the surety bond. 2 Unless otherwise agreed, he is liable up to this limit for: 1. the amount of the principal obligation, including the legal consequences of any fault or default on the part of the principal debtor, but not for damage resulting from the extinction of the contract and any contractual penalty unless this was expressly agreed; 2. the costs of debt enforcement proceedings and legal action brought against the principal debtor, provided that the surety was given timely opportunity to avoid them by satisfying the creditor, and, where applicable, for the costs of delivering pledges and transferring liens; 3. interest at the contractually agreed rate up to a maximum of the interest payable for the current year and the previous year or, where applicable, for the annual payments due for the current year and the previous year. 3 Unless otherwise provided by the contract or dictated by the circumst

b. Reduction of liability by court order

Art. 500

1 Unless otherwise agreed at the outset or by subsequent amendment, the amount for which a surety who is a natural person is liable decreases every year by three per cent or, where the claim is secured by mortgage, by one per cent of the original maximum liability. In all cases where the surety is a natural person, the amount decreases in at least the same proportion as the obligation. 2 This does not apply to contracts of surety in favour of the Confederation or its public institutions or in favour of a canton for the performance public law obligations such as customs duties, taxes and the like, and for freight charges, or to contracts of surety for the performance of official and civil service obligations or for obligations of variable amount, such as current accounts and contracts for delivery by instalments, and for periodic, recurrent obligations.

c. Resort to the surety

Art. 501

1 The creditor may not apply to the surety in respect of the principal obligation before the date fixed for its payment even if such date is brought forward following the principal debtor’s bankruptcy. 2 Under a contract of surety of any type, in exchange for furnishing real security, the surety may request that the court suspend the debt enforcement proceedings against him until all pledges have been realised and a definitive unpaid debt certificateeen issued against the principal debtor or a composition agreement has been concluded with the creditors. 3 Where the principal obligation may not fall due without notice being served by the creditor or the principal debtor, the time limit for the surety does not commence until the date on which he receives such notice. 4 Where the obligation of a principal debtor residing abroad is annulled or restricted by foreign legislation, such as by provisions relating to clearing systems or a ban on currency transfers, a surety resident in Switzerla

d. Defences

Art. 502

1 The surety is entitled and obliged to plead against the creditor all defences open to the principal debtor or his heirs which are not based on the insolvency of the principal debtor. Suretyship for obligations that are not binding on the principal debtor owing to error or incapacity to make a contract or for time-barred obligations is reserved. 2 Where the principal debtor waives a defence that is open to him, the surety may nevertheless plead it. 3 Where the surety fails to plead defences open to the principal debtor, he forfeits his right of recourse to the extent that such defences would have released him from liability unless he can prove that he was unaware of them through no fault of his own. 4 A person who stands surety for an obligation that is not actionable because it stems from gambling or betting may plead the same defences as are open to the principal debtor even if he was aware of that defect.

e. Creditor’s duty of diligence and duty to releas

Art. 503

1 Where the liens and other securities and preferential rights furnished when the contract of surety is concluded or subsequently obtained from the principal debtor for the specific purpose of securing the claim under surety are reduced by the creditor to the detriment of the surety, the latter’s liability is decreased by an equal amount unless it can be proven that the damage is less. Claims for restitution of the over-paid amount are unaffected. 2 Moreover, in the case of contracts of surety for the performance of official and civil service obligations, the creditor is liable to the surety if, as a result of his failure to supervise the employee as required or to act with the diligence that could reasonably be expected of him, the obligation arose or increased to an extent that it would not have otherwise reached. 3 On being satisfied by the surety, the creditor is required to furnish him with such documents and information as are required to exercise his rights. The creditor must al

Para. 2 — Amended by No II Art. 1 No 12 of the FA of 25 June 1971, in force since 1 Jan. 1972 (AS 1971 1465; BBl 1967 II 241). See also the Final and Transitional Provisions of Title X, at the end of this Code.

f. Right to demand acceptance of payment

Art. 504

1 As soon as the principal obligation falls due, even as a result of the bankruptcy of the principal debtor, the surety may at any time demand that the creditor accept satisfaction from him. Where several persons stand surety for an obligation, the creditor is obliged to accept even a part payment, provided it at least equals the share of the surety offering payment. 2 Where the creditor refuses without just cause to accept payment, the surety is released from his liability. In this event the liability of all other jointly and severally liable co-sureties is decreased by the amount of his share. 3 If the creditor is prepared to accept satisfaction, the surety may pay him even before the principal obligation falls due. However, the surety has no right of recourse against the principal debtor until the obligation falls due.

g. Creditor’s duty to notify and to register his c

Art. 505

1 Where the debtor is six months in arrears in the payment of capital, interest accrued over half a year or an annual repayment, the creditor must notify the surety. The creditor must inform the surety of the status of the principal obligation on request. 2 In the event of bankruptcy or composition proceedings concerning the principal debtor, the creditor must register his claim and do everything conscionable to safeguard his rights. He must inform the surety of the bankruptcy or debt restructuring moratorium as soon as he himself learns of it. 3 Should the creditor fail to take any of these actions, he forfeits his claims against the surety to the extent of any damage to the latter resulting from such failure.

2. Relationship between surety and principal debto

a. Right to security and release

Art. 506

The surety may require that the principal debtor furnish security and demand his release from liability once the principal obligation falls due: 1. where the principal debtor breaches the agreements made with the surety, and in particular his promise to release the surety by a certain date; 2. where the principal debtor is in default or has relocated his domicile abroad and legal action against him in foreign courts has been substantially impeded as a result; 3. where the surety faces substantially greater risks than when he agreed to offer the surety because of a deterioration in the principal debtor’s financial situation, a decrease in the value of the security furnished or the fault of the principal debtor.

b. Surety’s right of recourse

aa. In general

Art. 507

1 The surety is subrogated to the creditor’s rights to the extent that he has satisfied him. The surety may exercise these as soon as the obligation falls due. 2 However, unless otherwise agreed, he is subrogated only to those liens and other securities which had been furnished when the contract of surety was concluded or were subsequently obtained from the principal debtor for the specific purpose of securing the claim. If on paying only part of the debt the surety is subrogated to only part of a lien, the part remaining with the creditor takes precedence over that of the surety. 3 Special claims and defences arising from the legal relationship between the surety and the principal debtor are reserved. 4 Where a pledge securing a claim under surety is realised or the owner of the pledge pays voluntarily, he may only have recourse against the surety for such payment where an agreement to this effect was reached between the pledgor and the surety or the pledge was given subsequently by a

bb. Surety’s duty to notify

Art. 508

1 Where the surety pays the principal obligation in full or in part, he must notify the principal debtor. 2 If he fails to do so and the principal debtor pays it again because he was not and could not be expected to be aware of the surety’s payment, the surety forfeits his right of recourse against the principal debtor. 3 This does not affect any claim against the creditor for unjust enrichment.

C. Termination of the contract of surety

I. By operation of law

Art. 509

1 The surety is released as soon as the principal obligation is extinguished for whatever reason. 2 Where the same person is both principal debtor and surety, the creditor retains the special privileges conferred by the contract of surety. 3 Any surety given by a natural person is extinguished once twenty years have elapsed from the date on which the contract was entered into. This does not apply to contracts of surety in favour of the Confederation or its public institutions or in favour of a canton for the performance of public law obligations such as customs duties, taxes and the like, and for freight charges, or to contracts of surety for the performance of official and civil service obligations and for periodic, recurrent obligations. 4 During the final year of this period, the creditor may resort to the surety even where a longer duration was agreed for the contract of surety, unless the surety has previously extended the contract or replaced it with a new one. 5 The contract of

II. Fixed-term contract of surety; revocation

Art. 510

1 A contract of surety for a future obligation may be revoked by the surety at any time by means of a written declaration to the creditor, provided that the obligation has not yet arisen, where the principal debtor’s financial situation has substantially deteriorated since the contract was concluded or where it subsequently transpires that his financial situation is substantially worse than the surety had in good faith assumed. Contracts of surety for the performance of official and civil service obligations may no longer be revoked once the official or civil service relationship has come into being. 2 The surety is liable to compensate the creditor for any damage resulting from the fact that he relied in good faith on the contract of surety. 3 Where a contract of surety is concluded for a fixed term, the surety’s liability is extinguished if the creditor fails to assert his claim at law within four weeks of the expiry of such term and to pursue it without significant interruption. 4 W

III. Open-ended contract of surety

Art. 511

1 Where a contract of surety is concluded for an indefinite term, once the principal debtor’s obligation falls due the surety may, where action may be brought only on such conditions, request that the creditor assert his claim within a period of four weeks, instigate proceedings to realise any existing pledges and pursue his claim without significant interruption. 2 In the case of claims that fall due on expiry of a period of notice served by the creditor, once one year has elapsed since the contract of surety was concluded, the surety has the right to request that the creditor serve notice and, once the obligation is due, exercise his rights in accordance with para. 1. 3 The surety is released if the creditor does not comply with such request.

IV. Contracts of surety for official and civil ser

Art. 512

1 A contract of surety for the performance of official obligations concluded for an indefinite term may be terminated subject to one year’s notice expiring at the end of a term of office. 2 Where there is no fixed term of office, the surety may terminate the contract by giving one year’s notice expiring at the end of a four-year period commencing when the office was taken up. 3 A person standing surety for the performance of civil service obligations for an indefinite term has the same right to give notice of termination as under an open-ended contract of surety for official obligations. 4 Agreements to the contrary are unaffected.

Title Twenty-One: Gambling and Betting

A. No actionable claim

Art. 513

1 Gambling and betting do not give rise to a claim. 2 The same applies to advances or loans knowingly made for the purposes of gambling or betting and to contracts for difference and transactions for delivery of commodities or securities that are speculative in character.

B. Debentures and voluntary payment

Art. 514

1 A promissory note or bill of exchange signed by the gambler or bettor to cover the sum gambled or bet may not be enforced even following delivery of the instrument, subject to the rights that securities confer on bona fide third parties. 2 A voluntary payment may be reclaimed only where the intended gambling or betting activity could not take place as a result of chance occurrence or the actions of the recipient, or where the latter has committed an impropriety.

C. Lotteries and prize draws

Art. 515

1 Lotteries and prize draws give rise to a claim only where they have been approved by the competent authority. 2 In the absence of such approval, the claim is treated as a gambling claim. 3 Lotteries or draws authorised abroad do not enjoy legal protection in Switzerland unless the competent Swiss authority has authorised the sale of tickets.

D. Gambling in casinos, loans from casinos

Art. 515a

Games of chance in casinos give rise to claims where they take place in a casino licensed by the competent authority.

Art. 515a — Inserted by Annex No 5 to the Gambling Act of 18 Dec. 1998, in force since 1 April 2000 (AS 2000 677; BBl 1997 III 145).

Title Twenty-Two: Life Annuity and the Lifetime Ma

A. Life annuity agreement

I. Nature

Art. 516

1 A life annuity may be created for the lifetime of the annuitant, the grantor or a third party. 2 In the absence of any specific agreement, the presumption is that it is settled for the life of the annuitant. 3 Unless otherwise agreed, an annuity settled for the life of the grantor or of a third party passes to the heirs of the annuitant.

II. Formal requirement

Art. 517

The life annuity agreement is valid only if done in writing.

III. Rights of the annuitant

1. Exercise of entitlement

Art. 518

1 Unless otherwise agreed, the life annuity is payable every six months in advance. 2 If the person on whom the life annuity is settled dies before the end of the period for which it is payable in advance, the grantor owes the full amount. 3 If the grantor is declared bankrupt, the annuitant may assert his entitlements by bringing a capital claim for the amount that would be required at the time the grantor is declared bankrupt to establish an equivalent contract of annuity with a reputable annuity institution.

2. Assignment

Amended by Annex No 6 to the FA of 16 Dec. 1994, in force since 1 Jan. 1997 (AS 1995 1227; BBl 1991 III 1).

Art. 519

1 Unless otherwise agreed, the life annuitant may assign his rights. 2 ...

Para. 2 — Repealed by Annex No 6 to the FA of 16 Dec. 1994, with effect from 1 Jan. 1997 (AS 1995 1227; BBl 1991 III 1).

IV. Life annuities under the law governing insuran

Art. 520

The provisions of this Code governing life annuity agreements do not apply to life annuity agreements subject to the Federal Act of 2 April 1908 on Insurance Policies, with the exception of the provision governing withdrawal of annuity entitlements.

SR 221.229.1

B. Lifetime maintenance agreement

I. Definition

Art. 521

1 A lifetime maintenance agreement is a contract in which the beneficiary undertakes to transfer an estate or individual assets to the settlor in return for an undertaking to provide maintenance and care for his lifetime. 2 If the settlor is appointed heir to the beneficiary, the entire relationship is subject to the provisions governing contracts of succession.

II. Conclusion

1. Form

Art. 522

1 The lifetime maintenance agreement must be done in the same form as a contract of succession, even where it does not involve the designation of an heir. 2 However, where it is concluded with a licensed care home on conditions approved by the competent authority, written form is sufficient.

2. Security

Art. 523

A beneficiary who transfers land to the other party retains a statutory lien on the property as security for his claims in the same manner as a seller.

III. Content

Art. 524

1 The beneficiary becomes part of the settlor’s household and the settlor is obliged to provide him such benefits as he might reasonably expect to receive in the light of the value of the assets transferred and his previous standard of living. 2 The settlor is obliged to provide the beneficiary with appropriate accommodation and maintenance and, in the event of his illness, with the necessary care and medical treatment. 3 Subject to approval by the competent authority, care homes may adopt house rules whereby such benefits are incorporated as generally binding contractual terms.

IV. Challenge and reduction

Art. 525

1 A lifetime maintenance agreement may be challenged by persons to whom the beneficiary has a legal duty of maintenance where conclusion of the agreement would deprive the beneficiary of the means of discharging such duty. 2 Instead of rescinding the agreement, the court may order the settlor to maintain such persons, with any such maintenance being brought into account against the benefits owed to the beneficiary under the lifetime maintenance agreement. 3 Actions in abatement by heirs and legal challenges by creditors are reserved.

V. Termination

1. Notice

Art. 526

1 The lifetime maintenance agreement may be terminated by either party at any time subject to six months’ notice, where according to the agreement the performance of one party is substantially greater in value than that of the other and the party benefiting from such imbalance cannot show that the other intended it as a gift. 2 The decisive criterion here is the relation between the capital and the life annuity according to the principles applied by any reputable annuity institution. 3 Performance already rendered at the time of termination is returned after its capitalised value plus interest has been set off.

2. Unilateral termination

Art. 527

1 Either party may unilaterally terminate the agreement where the relationship has become unconscionable as a result of breach of contractual obligations or where other good cause has rendered its continuation exceedingly difficult or impossible. 2 Where the agreement is terminated on such grounds, the party at fault must pay adequate compensation to the innocent party in addition to returning the performance received. 3 Instead of rescinding the agreement, at the request of one party or of its own accord the court may dissolve the joint household and award a life annuity to the beneficiary by way of compensation.

3. Termination on the death of the settlor

Art. 528

1 On the death of the settlor the beneficiary may within one year insist that the agreement be terminated. 2 In this event, he has a claim against the heirs equivalent to the claim he would have in the event of the settlor’s bankruptcy.

VI. Non-transferable claim, asserting claim in the

Art. 529

1 The beneficiary’s claim is non-transferable. 2 In the event of the settlor’s bankruptcy, the beneficiary has a claim equivalent to the capital that would be required to acquire from a reputable annuity institution a life annuity equal in value to the benefits owed to him by the settlor. 3 In the case of debt enforcement by attachment, the beneficiary may participate in the attachment in respect of this claim without need to bring prior enforcement proceedings.

Title Twenty-Three: The Simple Partnership

A. Definition

Art. 530

1 A partnership is a contractual relationship in which two or more persons agree to combine their efforts or resources in order to achieve a common goal. 2 A simple partnership within the meaning of this Title is any partnership that does not fulfil the distinctive criteria of any of the other types of partnership codified herein.

B. Relationship between partners

I. Contributions

Art. 531

1 Each partner must make a contribution, which may be money, objects, claims or labour. 2 Unless otherwise agreed, contributions must be equal and of the nature and size required to achieve the partnership’s purpose. 3 The bearing of risk by and warranty obligations of the partners are governed mutatis mutandis by the rules on leases where a contribution involves the transfer by an individual partner of the use of an object, and by the rules governing contracts of sale where it involves transfer of title.

II. Profit and loss

1. Profit sharing

Art. 532

Each partner is obliged to share with his fellow partners any profit which by nature belongs to the partnership.

2. Participation in profits and losses

Art. 533

1 Unless otherwise agreed, each partner has an equal share in profits and losses regardless of the nature and amount of his contribution. 2 Where only the partner’s share in the profits or his share in the losses is agreed, such agreement applies to both. 3 It is permitted to agree that a partner whose contribution to the common purpose consists of labour will participate in the profits but not in the losses.

III. Partnership resolutions

Art. 534

1 Partnership resolutions are made with the consent of all partners. 2 Where the partnership agreement provides for resolutions to be passed by majority vote, it is defined as a numerical majority of the partners.

IV. Management of partnership business

Art. 535

1 All partners have the right to manage the partnership unless the task is entrusted exclusively to one or more partners or to third parties by agreement or resolution. 2 Where all or several partners have the right to manage the partnership, each of them may act without the involvement of the others, although every other partner authorised to manage the partnership has the right to object to and thereby forestall any management action before it is carried out. 3 The unanimous consent of all the partners is required to appoint a general attorney or to carry out transactions which transcend the scope of ordinary business, unless there is risk in delay.

V. Liability between partners

1. Prohibition of competition

Art. 536

No partner may carry out transactions for his own benefit which thwart or obstruct the purpose of the partnership.

2. Claims arising from partnership activities

Art. 537

1 Where one partner incurs expenses or contracts liabilities in connection with affairs conducted on behalf of the partnership or suffers losses as a direct consequence of his management activities or the intrinsically associated risks, the other partners share his liability. 2 A partner who makes cash advances on behalf of the partnership may claim interest as of the date on which they were made. 3 By contrast, he is not entitled to remuneration for his personal services.

3. Due diligence

Art. 538

1 Each partner must conduct partnership affairs with the diligence and care that he would normally devote to his own affairs. 2 He is liable to the other partners for any damage caused through his fault and may not set off against such damage the benefits obtained for the partnership in his other activities. 3 Managing partners who are remunerated for their management services are liable in accordance with the provisions governing mandates.

VI. Withdrawal and restriction of management autho

Art. 539

1 The management authority granted to one of the partners under the partnership agreement may not be withdrawn or restricted by the other partners without good cause. 2 Where good cause exists, authority may be withdrawn by each of the other partners even where the partnership agreement provides otherwise. 3 In particular, good cause is deemed to exist where the managing partner is guilty of a serious breach of his duties or has become incapable of proper management of the partnership’s affairs.

VII. Managing partners and other partners

1. In general

Art. 540

1 Unless this Title or the partnership agreement provides otherwise, the relationship between the managing partners and the other partners is subject to the provisions governing mandates. 2 Where a partner who lacks management authority conducts business on the partnership’s behalf or a managing partner exceeds his management authority, the provisions governing agency without authority apply.

2. Right to information on the affairs of the part

Art. 541

1 A partner who lacks management authority has the right to receive information on the status of the partnership’s affairs, to inspect its books and documents and to obtain a summary statement of its financial position for his personal information. 2 Any contrary agreement is void.

VIII. Admission of new partners and sub-participat

Art. 542

1 No partner may admit a third party into the partnership without the consent of the other partners. 2 Where a partner unilaterally grants a third party a participation in his own share in the partnership or assigns his entire share to the third party, the latter does not become a partner and in particular does not acquire any right to information on partnership affairs.

C. Relationship between partners and third parties

I. Representation

Art. 543

1 A partner who deals with a third party on behalf of the partnership but in his own name acquires rights and obligations as against that third party in a purely individual capacity. 2 Where a partner deals with a third party in the name of the partnership or all the partners, the other partners acquire rights and obligations as against that third party only to the extent envisaged by the provisions governing representation. 3 A partner is presumed empowered to represent the partnership or all the partners in dealings with third parties as soon as management authority is conferred on him.

II. Effects of representation

Art. 544

1 Objects, rights in rem and claims transferred to or acquired for the partnership belong jointly to the partners as stipulated in the partnership agreement. 2 Unless otherwise provided in the partnership agreement, the creditors of a partner may claim only the share in the proceeds of liquidation of that partner by way of satisfaction. 3 Subject to contrary agreement, partners are jointly and severally liable for obligations to third parties contracted jointly or through representatives.

D. Dissolution

I. Grounds for dissolution

1. In general

Art. 545

1 The partnership is dissolved: 1. where the purpose of the partnership has been achieved or become impossible to achieve; 2. on the death of one of the partners, unless it was previously agreed that the partnership would continue with his heirs; 3. where the share in the proceeds of liquidation of a partner is subject to compulsory sale or one of the partners is declared bankrupt or made subject to a general deputyship; 4. by unanimous decision of the partners; 5. on expiry of the period for which the partnership was established; 6. by notice of termination served by one of the partners, where such right was reserved in the partnership agreement or the partnership was established for an indefinite duration or for the lifetime of one of the partners; 7. by court judgment in cases of dissolution for good cause. 2 The dissolution of the partnership may be requested for good cause before the duration of the partnership agreement expires or, where it was established for an indefinite durat

Para. 1 let. 3 — Amended by Annex No 10 of the FA of 19 Dec. 2008 (Adult Protection, Law of Persons and Law of Children), in force since 1 Jan. 2013 (AS 2011 725; BBl 2006 7001). Para. 1 let. 7 — Amendment not relevant to the English text.

2. Partnership of indefinite duration

Art. 546

1 Where the partnership was established for an indefinite duration or for the lifetime of one of the partners, each partner may terminate the partnership by giving six months’ notice. 2 Notice must be given in good faith and not at an inopportune juncture and, where an annual accounting period is envisaged, it must expire at the end of a financial year. 3 Where on expiry of the term for which it had been established the partnership is tacitly continued, it is deemed renewed for an indefinite duration.

II. Effect of dissolution on business management

Art. 547

1 Where the partnership is dissolved for any reason other than notice of termination, a partner retains his authority to manage the partnership’s business until he learns of the dissolution or ought to have learned of it had he shown due diligence. 2 Where the partnership is dissolved on the death of a partner, the heir of the deceased must inform the other partners of his death without delay and continue in good faith to attend to the partnership affairs of the deceased until the requisite arrangements have been made. 3 The other partners must likewise continue to manage the partnership’s business in the interim.

III. Liquidation

1. Treatment of contributions

Art. 548

1 Contributions to the partnership do not simply revert to those who made them in the liquidation that the partners must carry out after the partnership is dissolved. 2 However, each partner is entitled to the value for which his contribution was accepted. 3 Where no such value was determined, his claim is for the value of the contribution at the time it was made.

2. Division of surplus and deficit

Art. 549

1 Where a surplus remains after satisfaction of partnership debts, reimbursement of the expenses incurred and advances made by each partner and return of the value of contributions, it is divided as profit among the partners. 2 Where, after satisfaction of debts and the reimbursement of expenses and advances, the partnership’s assets are not sufficient to cover the return of contributions, the shortfall is borne equally by the partners as a loss.

3. Liquidation method

Art. 550

1 The liquidation following the dissolution of the partnership must be carried out jointly by all partners, including those without management authority. 2 However, where the partnership agreement related only to certain specific transactions to be carried out by one partner in his own name but on behalf of the partnership, that partner must carry out such transactions and give account of them to the other partners even after the partnership has been dissolved.

IV. Liability towards third parties

Art. 551

The dissolution of the partnership does not affect obligations entered into with third parties.