Regional court decision on online broking

Marc Benzler, Clifford Chance, Frankfurt

The Nuremberg-Fuerth Regional Court has recently delivered a decision relating to online broking. A broker stated in his marketing brochure that he would transmit orders to the German Stock Exchange within minutes of receipt and was subsequently sued for damages by the plaintiff after a computer systems failure prevented the broker from transmitting an order to the German Stock Exchange. When the order was eventually executed, the share price had risen and the client had to pay more for his order than he would have had to pay if the order had been transmitted upon receipt by the broker. The Regional Court awarded damages to the plaintiff for the extra cost incurred in buying the shares. It held that transmission of orders to the German Stock Exchange within seconds of receipt formed the basis of the contract between the client and the broker and immediate execution of the purchase order was impossible for reasons for which the broker was responsible.