Ruling on the validity of availability guarantees Comment by TaylorWessing

In a new series of articles the law firm TaylorWessing comments on new regulations in the field of renewable energy. Kerstin Bär wrote the first comment.

The Hamburg Regional Court recently addressed the question of the validity of availability guarantees in service and maintenance contracts. The court ruled that the limitation of liability contained within the availability guarantee withstands the legal scrutiny of standard terms and conditions and is not subject to any fundamental concerns regarding its validity.

The facts

The facts underlying the court's decision are typical for the wind energy sector. The plaintiff, operator of a wind farm, had entered into a contract with the defendant for the maintenance and servicing of its wind turbines. Due to a technical defect, the turbines had to be taken out of service at recurring intervals. During these downtimes, the plaintiff suffered revenue losses, which it demanded be fully compensated by the defendant – as the contractual partner under the maintenance and service agreement. The defendant argued that it was only liable for revenue losses within the scope of the availability guarantee stipulated in the maintenance and service agreement. The plaintiff countered that the limitation of liability constituted an invalid standard business term.

The nature of the availability guarantee

A key component of maintenance and service contracts for wind turbines is the guarantee of technical availability (availability guarantee). This ensures that a wind turbine or wind farm can be operated reliably and without significant restrictions for a defined period. It therefore concerns the stationary availability of the respective wind turbine or wind farm. A percentage availability rate is typically agreed upon, usually between 93% and 97%. If the agreed availability rate is not achieved, the contractor guarantees the operator a lump-sum compensation payment in the maintenance and service contracts.

The decision of the Hamburg Regional Court

The court stated that, even assuming the terms in question are standard business terms and conditions, the underlying provisions regarding the availability guarantee do not raise any fundamental legal concerns. In doing so, it follows established case law of the German Federal Court of Justice (BGH), which holds that limitations of liability based on a specific sum are generally invalid if they undermine essential legal positions of the contractual partner, particularly by depriving or restricting rights that the contract is specifically intended to grant. The court stated its opinion that the provisions regarding the availability guarantee do not contain such an impermissible disclaimer.

The court esteemed that the necessary overall assessment, taking into account the interests of both contracting parties, must consider that the limitation of liability for lost revenue is inextricably linked to the provision regarding guaranteed technical availability. This provision grants the wind farm operator a right to compensation if the agreed availability is not achieved, even if no culpable breach of duty exists or can be proven. This represents a significant advantage for the wind farm operator compared to the statutory claim for damages, since under the statutory provisions, the operator must prove a breach of duty, the causal link between the breach and the damage, and the amount of the damage. Such proof can be difficult, costly, and time-consuming. The wind farm operator is relieved of this risk.

The availability guarantee, in conjunction with the provision for a lump-sum compensation claim in the event of lost revenue, therefore enables a simple and predictable settlement of a claim for lost revenue, which is in the interest of both parties.