Comparative law notes
Because the theory upon which the German concept of Erfüllungsgeschäft is based does not exist under common law - the strict analytical segregation between the contractual formation element of the contract and the performance element of the contract - the use of the common law term "performance" is slightly misleading. The purpose may be similar: by discharging the duty, the obligor will have fulfilled the contract and will likely bring the relationship it to a close. However, unlike the common law of contracts, the formation element of the contract (Verpflichtungsgeschäft) is not inextricably linked to the performance element of the contract. Conceptually under the German abstraction (segregation) principal (Abstraktionsprinzip), the Verpflichtungsgeschaeft (formation element) is its own stand-alone juridical or legally consequential act that is separate and distinct from the Erfüllungsgeschäft (performance element). Thus, to call the Erfüllungsgeschäft simply performance would ignore the unique conceptual structure of German civil law. In our view, since this critical aspect of German jurisprudence will often not require a detailed explanation during a fast-moving transaction, the word "performance" will probably suffice. However, as always, if the context suggests that this element is or may become relevant now or in the future, then the other neologism shown in this entry will be a better translation.
