Facts
The [A. GmbH] (appellant) and [B.] (respondent) concluded several franchise agreements. These agreements stipulated a contractual penalty of CHF 10,000 per breach of contract. After the termination of the contracts, [B.] wrote to eight customers of the appellant and informed them about the establishment of a new internet portal. The [A. GmbH] considered this a violation of the non-competition clause and sued for the payment of a contractual penalty of CHF 80,000. The Cantonal Court of Schwyz ordered [B.] to pay a reduced contractual penalty of CHF 8,000. The appellant appealed against this reduction of the contractual penalty to the Federal Supreme Court.Considerations
The Federal Supreme Court dismissed the appeal. It stated that according to Art. 163 para. 3 CO, the judge can reduce excessively high contractual penalties at his discretion. However, restraint is required for reasons of contractual loyalty and contractual freedom. A reduction is particularly justified if there is a gross disproportion between the agreed amount and the interest of the claimant in adhering to it in full at the time of the breach of contract. The…