## Facts

- Weber, Huber, et Cie. (Weber) entered into a contract with M Corporation to purchase 200 tons of first-quality Polish mineral oil on fixed terms.
- Before delivery, M Corporation agreed with J Corporation that J Corporation would take over M Corporation’s assets and liabilities.
- After the takeover, J Corporation changed its name to Rimba Corporation (Rimba).
- Rimba notified Weber that it had taken over M Corporation’s rights and duties and would perform the mineral-oil contract.
- Weber replied that it did not consent to transferring its contract with M Corporation to Rimba and treated the contract as terminated.
- At the time Weber rejected Rimba’s performance, the market price of Polish mineral oil had fallen significantly; Weber denied that market conditions motivated its refusal.
- Rimba sued Weber in the St. Gallen commercial court seeking a declaratory judgment that the contract remained valid and that Weber was required to accept the 200 tons.
- The trial court ruled for Rimba, and Weber appealed to the Swiss Federal Supreme Court.

## Issues

1. Whether, under Swiss law’s general rule against substituting a contract obligor without the obligee’s consent, Weber could reject performance and treat the contract as terminated when M Corporation’s business and obligations were taken over by Rimba.
2. Whether a successor that has assumed all assets and liabilities of the original seller may enforce the sales contract against the buyer, and what showing (if any) allows the buyer to refuse the successor’s performance.

## Decision

- The Swiss Federal Supreme Court dismissed Weber’s appeal and affirmed judgment for Rimba.
- The Court held that, where a corporation takes over another corporation’s business with its assets and liabilities and continues the enterprise, the successor may assert and perform the transferred bilateral contract in place of the original obligor.
- The Court ruled that the buyer may refuse the successor’s performance only for serious reasons tied to the buyer’s legitimate interest in who performs—such as materially increased nonperformance risk or other concrete disadvantages from the change in obligor.
- On the record presented, Weber showed no such serious reason; a purely formal objection to the change in contracting party was insufficient, and the Court did not accept market developments as a valid basis to treat the contract as ended.

## Legal Principles

- Swiss law generally requires the creditor’s consent to a substitution of the contract obligor, but that rule is not applied mechanically when an entire enterprise is transferred and the successor assumes the transferor’s rights and duties.
- In a takeover in which the successor assumes all liabilities and continues performance of the same business obligation, the contract relationship can continue with the successor as the performing party.
- The counterparty’s protection lies in the ability to object for serious, fact-based reasons (for example, a meaningful deterioration in creditworthiness or performance security), not in an automatic right to terminate based solely on lack of consent.
- A party’s attempt to escape a fixed-price bargain due to later market price movements does not, without more, supply a legally sufficient reason to refuse performance by the successor.
- A declaratory judgment is an available procedural tool to confirm continuing contractual obligations when the counterparty denies that the contract remains in force after a business takeover.

## Conclusion

BGE 57 II 528 confirms that when a seller’s business is taken over with its assets and liabilities and the successor continues the enterprise, the buyer generally remains bound to accept performance from the successor; the buyer may refuse only upon a concrete showing of serious prejudice from the change in obligor, not on formal non-consent or unfavorable market shifts.


Opinion of the Swiss Federal Court in the Matter of Weber, Huber, et Cie., Defendant-Appellant, Against “Rimba,” Plaintiff-Respondent, BGE 57 II 528 (1931)