Wicked Ltd, a telephone sex service provider, concluded a contract with Fun Ltd for the marketing of telephone cards. In connection with this marketing contract, the two companies concluded a loan contract by which Wicked Ltd borrowed €50,000 from Fun Ltd. Wicked Ltd delivered to Fun Ltd telephone sex cards and other telephone sex-related services for a value of €80,000. Some months later, the business relationship between Wicked Ltd and Fun Ltd started to deteriorate until it was eventually terminated. Fun Ltd has claimed from Wicked Ltd the repayment of the €50,000 loan. Can Wicked Ltd set off the claim and counterclaim €30,000 from Fun Ltd as payment for the delivered services?

Case Reference: BGH, 09.06.1998 – XI ZR 192–197.

AUSTRIA

OPERATIVE RULES

Wicked can set off Fun's claim and counterclaim €30,000.

DESCRIPTIVE FORMANTS

Telephone sex contracts were held compatible with the concept of “good morals” under Art. 879(1) CC in two Supreme Court cases of 2003, that is, before the Supreme Court's about-turn regarding sex work contracts in 2012 (see Case 1). In these cases, the Court argued that no direct physical contact takes place and the woman's genital area is not downgraded to a commercial asset, but a mere “vocal-acting performance” is delivered. It is also considered that this form of sexual behaviour precludes involvement in criminal activities (which is submitted to be linked to sex work frequently), avoids the risk of infections, and allows women to earn income without physical exploitation.

On this case law basis, it is clear that the contracts between Wicked and Fun, which only intend to promote telephone sex services and are, therefore, even more “remote” from any sex-related performance than the performance of a telephone sex contract itself, would be held valid by an Austrian court.

BELGIUM

OPERATIVE RULES

Wicked Ltd can most probably not set off the claim and submit a counterclaim of €30,000 from Fun Ltd as payment for the delivered services.

DESCRIPTIVE FORMANTS

As far as we know, there is no published Belgian case law on a similar case. However, the legal formants for the case are clear.