Ur19 U 16/02, OLG Köln, 6 September 2002. Translated by Henriette Picot and Marlene Kast

Case Translation:, Germany

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OLG Köln Decision dated 06/09/2002 19 U 16/02Interrogatories upon the conclusion of a contract in theinternet auctionJurPC Web-Dok. 364/2002, Section 1 - 15German Civil Code (BGB) §§ 145 ff.Guiding principles (the editor)1. The mere fact of having an e-mail account – just asthe mere possession of a credit card – does not entailbearing the risk of fraudulent use.2. It does not follow that there is prima facie evidencethat a bid at an internet auction has actually beensubmitted by the owner of an e-mail account,because security standards over the internet are notsufficient to conclude from the use of a secretpassword that the password was used by the personto whom such a password was originally assigned.3. The vendor in an internet auction is not protected byrelying on the fact that the bidder is the same personas the owner of the e-mail account.ReasonsIBetween 10 and 17 August, 2000, I-T. organized an internetauction for a golden gentleman’s wrist-watch. Bids weresubmitted by e-mails via accounts set up at the internetservice provider G. At the time, the defendant had two e-mail accounts at this company: a private account with theuser name ‘k.’ and an official account with the user name‘a.’. To protect both accounts, he had selected the numbercombination of his date of birth (…) as his (secret)password.The gentleman’s wrist-watch was offered in the auctionby a user under the name of ‘b.T.’. The starting bid had tobe at least 18,000.00 DM. On August 14, 2000 at 18:55hours, a bid was submitted in the amount of 18,000.00 DM.The EDP system of the auction organizer recorded theauction participant ‘…’ as the bidder. As this turned out tobe the only bid, G. informed the claimant on August 24,2000 that the bid was submitted via an e-mail accountwhich stated as ‘contact information’ the name, addressand private e-mail account of the defendant. When theclaimant requested the defendant to effect the paymentand take delivery of the wrist-watch, the defendantrejected this, amongst other things, in an e-mail datedAugust 31, 2000. He argued that the bid had beensubmitted by an unauthorized third party.By judgment dated August 07, 2001, to which referenceis hereby made, the regional court rejected the complaint,reasoning that it was not proven that the defendant hadsubmitted the bid on August 14, 2000.The claimant has appealed this decision, and theclaimant’s primary challenge is that the regional court ruledthat he had to bear the burden of proof that the defendanthad submitted the bid, arguing that the court should atleast have assumed as prima facie evidence against thedefendant, which the defendant had not sufficientlyrefuted. The defendant argued that even if such argumentwere rejected, the defendant would be liable according tothe principles of the prima facie evidence.The defendant advocates the contested decision byrepeating and elaborating his submission at first instance.With regard to the further details of the status ofproceedings, reference is made to the content submitted inthe written pleadings exchanged between the parties.IIThe appeal of the claimant is of no avail. The regional courtcorrectly rejected the complaint, giving very detailedreasons addressing all issues. For the avoidance ofrepetition, the senate refers to the reasons of the contesteddecision, which it follows to the full extent (likewise inagreement are Wiebe, MMR 2002, 257; Hoeren, CR 2002,295; in a similar case, the local court Erfurt decidedaccordingly, MMR 2002, 127).The objections expressed by the claimant against thedecision in the appellate proceedings do not justify adivergent decision.1. Contrary to the view of the claimant, the defendantdoes not – only because he has an e-mail accountwith a specific pseudonym and password – bear therisk of fraudulent use with the consequence of areversal of the burden of proof based on a distinctionof spheres of risk. Merely having an e-mail accountdoes not entail bearing the risk of fraudulent use, justas little as merely possessing a credit card does notentail a liability of the owner in case of a fraudulentuse of his (secret) credit card number by anunauthorized third party, for example in a mailordering process (see in this respect BGH NJW 2002,CASE CITATION: Ur19 U 16/02NAME AND LEVEL OF COURT: OLG KölnDATE OF DECISION: 6 September 2002CASE TRANSLATION: GERMANY108 Digital Evidence and Electronic Signature Law Review, Vol 5                               www.deaeslr.org © Pario Communications Limited, 20082234 with reference to Langenbucher, “DieRisikozuweisung im bargeldlosen Zahlungsverkehr”,p. 259).2. Also, there is no prima facie evidence to thedetriment of the defendant. The regional courtcorrectly denied the existence of a typical course ofevents that would allow prima facie evidence to beadduced. The security standard on the internet – aseveryone knows who deals with data transfer – iscurrently not sufficient in order to conclude from theuse of a secret password that such use has beenmade by the person to which such a password wasoriginally assigned. Furthermore, the difficulties of‘decoding’ the password, as illustrated by theclaimant, are irrelevant in this context, because afraudulent use does not necessarily require aprevious decoding. Rather, anybody who is familiarwith the processes in the internet – which is the casewith many juveniles in these days – can ‘read’ thepassword without great efforts. One may possiblyregard the requirement of ‘typical’ as sufficientlyfulfilled for prima facie evidence if an electronicsignature [Editors comment: ‘electronic’ in thiscontext means digital] has been used, but not just incase of using an unprotected password (see for thisSchmidl, CR 2002, 508, who construes a legalpresumption of authenticity in these cases where adeclaration of will has been furnished with a qualifiedelectronic signature). The fact that the defendant –contrary to the view of the claimant – had sufficientlyobjected to such prima facie evidence is hence notdecisive.3. A liability of the defendant does not exist inaccordance with the legal principles of apparentpower of attorney (Anscheinsvollmacht). An apparentpower of attorney has to be assumed where (i) theprincipal is not aware of the action of the assumedproxy, but could have learned of and prevented suchactions if applying due diligence and care, and (ii) theother party could justifiably assume that the principaltolerated and approved the proxy’s actions; undersuch conditions, this is a matter of attributing a legalpresumption based on a culpable conduct [of theproxy]. In the given case, however, the defendant wasunable to foresee that on the evening of August 14,2000 an unauthorized action would be committed byan unauthorized party. While on August 14, 2000 thedefendant did know that his e-mail account wasblocked, he did not need to conclude therefrom –even with all due diligence and care – that somebodywas concluding contracts over the internet under hisname, i.e. using his secret password.Furthermore, the claimant’s reliance on the bidder’sidentity is not worthy of protection, such worthiness ofprotection being a precedent condition for such apresumption of a power of attorney, as the regional courthas extensively and correctly assessed. Just as a personwho receives a fraudulent order by telephone under thename and address of an existing person and just as aperson who receives an order via the mail order process bysomebody using someone else’s credit card number, thevendor at an internet auction is not protected in relying onthe fact that the bidder is the same person as the owner ofthe e-mail account.IIIThe appeal will be admitted as this legal matter is offundamental importance (Section 543 Para. 2 no. 1 of theCivil Procedural Code (ZPO)). In view of the increasingnumber of contracts concluded over the internet, it can beexpected that the question demanding clarification in thislegal dispute – the question whether the vendor may enjoya reversal of the burden of proof or an ease of proofregarding his contractual partner – will arise in anundefined number of cases. This question thereforerequires clarification before the highest courts.IVThe ancillary decisions [regarding costs, etc.] follow fromSections 91, 97, 108, 708 no. 10, 711 of the Civil ProceduralCode (ZPO).The amount in dispute for the appellate proceedings andat the same time the amount of the claim for the claimantis set at €9,203.25 (=18,000.00 DM).© Translation Henriette Picot and Marlene Kast, Bird & Bird, 2008Post commentThe reader is alerted to three further cases regardingthe burden of proof in on-line auctions and direct saleson ebay, which have confirmed the views initially takenby the Higher Regional Court of Cologne in the abovecase, underlining the point that the current securitystatus on the internet does not sustain prima facieevidence relating to the identity of the person using acertain particular account:Regional Court of Konstanz of April 19, 2002 (LGKonstanz, 2 O 141/01 A)Regional Court of Bonn of December 19, 2003 (LGBonn, 2 O 472/03)Higher Regional Court of Hamm of November 16, 2006(OLG Hamm, 28 U 84/06).CASE TRANSLATION: GERMANY109© Pario Communications Limited, 2008                                www.deaeslr.org Digital Evidence and Electronic Signature Law Review, Vol 5

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