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Principles of Tax Law

EU-Treaty EU-Directive for Sales Representative Block exemption regulations EU Employee (Commercial Traveller) Sales Representative Agent Commision Agent Authorized Dealer Franchisee is continuously entrusted by another person to procure or conclude business transactions regarding movables in the other's name and for the other's account and on a self-employed basis Can be legal entity Recieves commsion (usually percentage of turn-over) Right to compensation at the time of termination of his contract with entrepreneur Usually assigned on specific area and/or specific customers Has to act in the interest of the entrepreneurer Self-Employed Businees transacations in own name and for own account Merchandising risk with authorized dealer Double Margin Calculation Restrictions under anti-trust laws A sales represenrative is person who Distribution Structures (overview)

Main Sources of Law

Distribution Law

Sales Representative Principles of Distribution Law

Authorized Dealer Private Law Civil Law Determines legal relationships between individuals, e.g. Contract Law Warranties Legal Capacity Natural Persons Franchisee Legal Subjects Principles of Civil Law Partnerships Legal Persons Private Limited Company (Ltd.) in Austria: GmbH Public Limited Company (Plc.), in Austria AG Trusts Associations General Partnership (OG) Limited Partnership (KG Legal Capacity Capacity to be subject to legal rights and duties Natural and legal persons Legal Capacity

Similar to authorized dealer use of one trademark know-how Higher Degree of integration Franchisee fee Takes over full distribution concept

Intangiable property rights Legal protection of rights Patents Trademarks Copy Rights

Intelectual Property Intellectual Property Law Three Main Areas Capacity to Act

Capacity to acquire rights and impose obligations on oneself by acting for oneself Capacity to conclude contracts Responsibility for torts

Austrian Patenet Act International Treaties Monopoly right in invention different protection periods: e.g. 20 years Novel Involves inventive step Useful or capable of industrial application (US: non-obvious) Registration with Austrian Patent Office International registrations often useful Name, letters, numbers, logos, packaging / shape e.g. no generic names Mark = Any sign to distinguish goods or services that can be displayed graphically Distinguish goods/services from other Distinctive Ability goods/services Not Misleading Trademarks Types: Forms to Conclude a Contracts Principles of Intelectual Property Law special problem: famous marks Word marks Picture marks Figurative mark Sound, color Exclusive right to use mark in relation to product or service Protected are "creative works" Exculsive right to control the use of the works by author Litterature, fine arts, music, sound recordings, films etc. Need not to be works of art Similar rights to performing artists No registration required Injunction / Protective Order Omission Damages Account of profits Removal Publication of Judgment Infringement of IP-Rights Transfer of Ownership in Goods Remedies Title and modus necessary Title = legal reason e.g. sale contract e.g. delivery of the product Protection and care obligations Copyright Types of Contractual Obligations Freedom to Conclude Contracts Everyone is free to conclude those contracts he wishes Public morals; anything that is against our profound sense of justice Two corresponding statements of intent Offer + acceptance = contract Definition of a Contract Counter-offer Contract needs consent about major items of contract Intention to be bound In writing Orally Implied, by actions Generally no special form required Major obligations characteristic for type of contract e.g. Sales Contract: buyer: pays the price, seller delivery of the products. Independent of characteristic obligations Accessory Obligations Dependent e.g. Seller has to install sold TV set (has to be part of the agreement) Patenable Invention Patents

e.g. Original for products that are not "original"

preparation fo major obligation, serves major obligation e.g. Seller provides for package of TV set ready for transportation

Contractual partner and his property may not be harmed Violation of protection and care obligations: damages e.g. deliverer drops piano and causes hole in the floor

Modus = way of actually transfering goods to new owner No transfer of property if either mode or title is lacking Examples of Different Contracts Sales contracts Donation contract Safe keeping contract

Individual employment law Collective employment law Procedural employment law Peace Protecting Employees Shaping the economy Legal relationship between employer and employee Legal relationship between employer/employee and the state Related to individual employees e.g. Law on employment contracts e.g. Law on employee protection Organization and functions of employment law relate bodies of persons / associations Refferes to bodies of persons e.g. collective agreements, work council, strike, minimum wage jurisdiction conciliation body labour inspectorate own employment law court Contract between employer and employee Employee commits himself to services for the employer For a certain time Economic dependence of employee (e.g. Employer provides work equipment) Personal dependence of employee (e.g. requirement to observe instructions) Gender Martial Status Colour Race Nactionality Ethics National Origins Labourer Employee Publis Servant Statutes Collective Agreements Company Agreements Employment Contracts Written agreements between employer and employee associations which are authorized to negotiate collective agreements Hours of work Probationary work Notice periods Minimum wage Vacation etc. Collective agreements prevail over company agreements and employment contracts 25 work days per year (5-day week) Termination during probationary period, no reason needed Termination by mutal agreement between employer and employee Expiry; temporarty ontracts Death of employer; contracts usually continue Guarantee Termination of Employment Contract Colective agreements 2 Right to Leave (vacation) Content: Sources of Employment Law Warranty Recruitment Process Types of Employees Defects No lawful discrimination of applicants as to Principles of Employment Law Delay Characteristics: Employment Contract Procedural Law Collective and Procedural Employment Law Principles of Contracts Indvidual Employment Law Fuctions Employment Law Sales Contract

Transfer of a title in a good from seller to buyes Description of goods Passage of title Contracts generally deal with Warranties Liability Delivery Price Payment International Sale of Goods Retention of Title United Nations Convenction on Contracts for International Sale of Goods Act (CISG)

Title remains with seller as long as buyer as not paid the full price Security for Seller Sometimes void Rescission (leads to cancelation of contract)

Rescission of Contracts - Error

Rescission if error is substantial Substantial = contract would not have been entered into without the error if error is not substantial only reduction of price e.g. Draud: factory prices have been reduced. Seller knows that. He causes the buyer to not ask for the prices at the factory. Result: Buyer pays higher price for the product. A threatens to use force if B does not sign tenancy agreement. Buyer pays price more than double of the actual value of the goods Rescission possible Right to rescission can not be excluded contractually

Rescission of Contracts - Fraud and Threat

Rescission of Contracts - Laesio Enormis

Debtor does not fulfill contract Creditor can demand fulfillment of contract or withdraw from the contract after having set reasonable period of grace Interest payments for delay General Terms and Conditions pre-formulated clauses for contracts e.g. conditions of sale, conditions of delivery

Provisions in GTC are often agains public morals GTC do not apply automatically must be made part of contract

The subject of the contract is not as agreed upon e.g. car has to be blue according to the terms of the contract but is red defect or cause of defect exists at the time of delivery Liability that the goods/services delivered are free of defects at the time of delivery Implied Warranties Express Warranties Primary Remedies repair or replacement Warranty Remedies Collective Agreements 1 Secondary Remedies price reduction cancellation of contract, but not for insignificant defects Primary Remedies have priority second chance for the debtor (seller) are imposible or are refused by debtor etc. Moveable objects: 2 years Periods of Warranty Immoveable objects: 3 years begin of period: after delivery usually credit has to prove that defect was existent at the time of delivery Warranty Among Enterpreneurs Enterpreneurs have to examine goods witih reasonable time after delivery Notice of defect witih reasonable time after discovery Liability regardless whether defect existed at time of delivery or not Needs contractual agreement - not automatically Prodcuer Liablity of: Product Liability 1 Importer Seller (if he does not name producer or importer) For injuries or damages caused by a defect product Legal person distinct from officers and shareholders Owns property Can sue and can be sued in its own name Insulates owners agains personal liability Shareholder contribute capital to corporation Small Corporations: Shareholders are involved in the management Large corporations usually managed by third party managers Definition of Corporation No warranty claims! No fault required Product Liability 2 Defect Product does not offer the safety which can be expected Secondary Remedies only if primary remedies no fault required

Business Law I

Limited Liability Company, separate legal entity Shareholders are often manages and personally work at GmbH Advantages compared to partnerships; limited liability, tax advantages. Advantages compared to public corporations AG; less administrative efforts thus less expensive Articles of Association Minimum Share capital 35,000EUR Cash payment of at least 50% of share capital Registration with the commercial register Memorandum of Association Articles of association No minimum share capital Administrative duties Shareholders Meeting (General Assembly) Executive director/Executive board Supervisory Board Shareholders in their entirety Principal Decision making body Meetings usually at seat of the corporation Decision making compentence Resolutions Elected and dissmised by shareholders Employment relationship to corporation Carry out duties Austria: Only big GmbHs and AGs need to have a supervisory board Formal separation of executive and supervisory responsibilites Sometimes one tier board Austria / Germany Anglo-Saxon countries Supervising Monitoring Staffing Salaries Decision Making 1/3 of members must be employees Mainly big enterprises Minimum capital 70.000EUR Executive board makes decisions on its own, indenpendent of general assembly Aktiengesellschaft Commercial Register Gerneral Principles of Business Law Supervisory Board 2 Functions Enterpreneurship Business law applies to enterprises/enterprenuers Definition of enterpreneur: any pernament organization of economic activity, wether or not such an activity is directed to gain profits. in Austria: Firmenbuch in Germany: Handelsregister Great Britain: Companies House USA: Secretary of State for each US state Usually a public register Corporations and Partnerships came into existence Consequences of Registration and Firm Name Business Law fully applies firm name / trade name (Firma) Only one enterpreneuer - not an partnership Unlimited personal liability for onligations of the business Capital contributed by sole proprietor Business managed by sole proprietor Either oral, written or implied partnership agreement Partners are personally liable for obligations of the business No separate legal entity Not registered in commercial register General Partnership OG Limited Partnership KG Strong connection of partners with partnership (e.g. liability, partners conduct business etc.) Registration in commercial register is required Unlimited personal liability of general partners for obligations of business Partners contribute money and/or services Partners share profit and losses according to their capitac contributions Equal management right, unless otherwise agreed Partnership Assembly Stipulates rights and obligations of partners Great freedom to frame the agreement Consists of at least one general partner and one limited partner Unlimited personal liability of general partners for business obligations Limited partners not personal liability only with their capital contribution to the limited partnership. General Contrubutes money and or services Limited partners only contribute money General and Limited Partners share profit and losses Stipulates rights and obligations of the partners Great freedom to frame the agreement Registration with Firmenbuch Distribution of profits no registration no firm name One enterpreneuer and one or more silent partners Silent partber makes capital contribution, but he has no management rights and no liability except for his capital. Silent partner participates in profits as well as losses Silent Partnership Undisclosed partnership Limited Partnership 2 Limited Partnership 1 General Partnership 2 Sole Proprietor and Principles of Partnership Law General Partnership 1 Others Classification of Companies General Principles of Partnership Law Types of companies Corporations Partnerships General Principles of Companies Law Civil Law Partnership What is company? An asociation of two or more persons (exceptions: single shareholder corporation) Set up by legal act (e.g. Articles of Corporation) To purse a common goal witha a common means Civil Law partnership General Partnership OG Limited Partnership KG Silent Partnership Private Limited Company (Ltd. or GmbH) Public Limited Company (Plc. or AG) Cooperatives e.g. Private Trust No separate legal entity Separate legal entity Shareholders are personaly liable for debts Shareholders are not personaly liable for debts Sole Proprietorship appendix to show type of company (e.g. GmbH) name is frelly eligible, except for misleading names or names with no distinctivness Contractural Liability Contractual Liability vs. Liability in Tort Supervisory Board 1 Liability in tort GmbH Executive Director Extent of damages GmbH Shareholders' Meeting Degrees of fault Main Bodies of Austrian GmbH Principles of Corporate Law Principles of Damages Causation Unlawfulness British Ltd Kinds of Damage Austrian GmbH - Formation Preconditions Principles Austrian GmbH - Characteristics Everybody has to bear a loss in his sphere. In ceratin cases somebody else has to bear the loss of another person which means that s/he has to pay damanges/compensation. Damage/Loss Causation Unlawfulness Connection to unlawfulness Fault Financial Loss Immaterial damage The action or omission of someone must be the cause of a damage Breach of the law Breach of the contract Offence against good morals Negligence Intention Forms of compensation Not on purpose Done on purpose e.g. reparation of damaged object

In rem restitution has a priority Compensation in money Actual loss Actual loss and loss of profit

Only if restitution in remedy is inappropriate or impossible e.g. total loss of a car

Breach of contract Contractural Liability more favourable for injured person

Arises from violation of rules that apply to everybody