The facts of the case were that a bus operator was contracted to provide school transportation services and the client terminated extraordinarily the contract with reference to the contractual clause according to which the application for the opening of insolvency proceedings was also mentioned as a good cause for termination without notice.

According to previous case law, such contractual agreements are regularly invalid, as the contracting party is sufficiently protected by the statutory provisions in accordance with Section 320 of the German Civil Code.

In the present case, it had been contractually agreed that the client should be entitled to terminate the contract in the event of the contractor's insolvency. In the opinion of the Senate, Section 119 InsO limits the freedom of the parties. It covers dissolution clauses whose purpose is limited to releasing the contractual partner from the contract and thus reducing the insolvency administrator's right of choice under Section 103 InsO. However, according to the Senate, this is to be assessed differently if relevant dissolution clauses are nevertheless effective in certain cases, such as termination for good cause. This is justified in individual cases and should counteract the unilateral burden of the contractual risk on future insolvency creditors.

According to the BGH, this had not been sufficiently considered, so that the matter was referred back for further clarification of the facts.