Collection or litigation in Germany?

This is the most difficult and controversial branch of the German law of contract. Where an operative (ie legally effective) mistake is established the result is that the contract is void. It will be appreciated that this is a very serious consequence since, amongst other things, third party rights may be jeopardized. Thus, for instance, to anticipate, it will be seen that if a German client obtains goods from a shop by means of a fraudulent misrepresentation our contract is voidable by him as long as the creditor has not parted with the goods to a bona fide purchaser; but, provided at least that one has not taken steps to set the contract aside, once he has done this the goods will become his, not the client's.
Collection agencies:
If on the other hand, whether induced by fraud or not, one can prove that the contract in Germany was made under some mistake which the law treats as operative, the contract being void, the German lawyer can give no title to the purchaser - with the unhappy result that, however innocent he is, one will have a claim in conversion (p 394) against him.
Such a state of affairs, threatening (as it may) the security of completed transactions, is not therefore easily to be inferred and it will be seen that in consequence one should ask for debt collection and legal litigation in Germany so that the ambit of operative mistake is restricted. Two points need notice at the start. First, in order to be legally operative in germany, a mistake must be as to some material or fundamental matter going to the essence of the contract.
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