Mro Agreement Rates

If an MRO agreement (regulated by German law) requires an airline to pay a monthly or annual minimum or if the payment of PBH relates to scheduled and non-actual flight hours and the contract does not contain a contractual provision on the adjustment of the airline`s payment obligations, the airline may base its right to payment adjustment – with respect to the effects of COVID-19 – on Section 313 Civil Code. In Germany, there are still no court decisions concerning Section 313 and the COVID-19 crisis. However, in the German legal literature, there is an ongoing debate on this subject, and the prevailing opinion of COVID-19 and its implications is an «unpredictable, uncontrollable, unprecedented event» that gives a valid reason for the application of Section 313. A section 313 right does not result in the termination of a contract or a result that allows an airline to suspend its payments altogether. On the contrary, it will result in an adjustment of certain payment obligations that would take into account the interests of both parties. The possible results are multiple and depend on the actual provisions of the OAR agreement and the bargaining power of each party, as these cases will rarely be brought to justice. All contracts under German law are subject to contractual rights to accommodate payment obligations in PBH contracts. This is an exception to the general rule that each party must comply with the contractual obligations it has agreed to once (pacta sunt servanda). Therefore, this statutory provision must be narrowly understood and only applies if, for reasons outside the scope of risk of both parties, the parties` assumptions of principle have changed significantly, resulting in unacceptable harshness for a party that is no longer in compliance with the law. The underlying idea of Section 313 is to reassess risk allocation in a situation where contractual risk has become unfair for reasons not controlled by the parties. While the economic risk inherent in a contract remains for the party actively taking such a risk in an agreement, the risk resulting from an unpredictable situation outside of contract that entails an excessive burden on a single party should be shared by both parties as a «risk-carrying partnership». In Charman, the applicant claimed the cost of a medical assessment of USD 420.00 (including VAT).

The report was collected by a medical agency that was not a party to the OAR agreement.