Liability of the Foundation’s bodies
The bodies of a foundation shall be liable for damages resulting from a breach of its duty of care. This relates in particular to the Foundation Board, the members of which are liable to the Foundation with all of their private assets.
Government supervision
A foundation has no members who could supervise the Foundation Board (see blog entry). Therefore, this task falls to government regulators. Regulators monitor whether the Foundation’s assets are being used in accordance with the Foundation’s purpose (according to the statutes, see blog entry). However, regulators may only verify whether the legal provisions have been correctly applied. They may not review whether decisions made by the Foundation Board were reasonable or not.
Regulators may take preventative or repressive measures. A preventative measure is. e.g. the Foundation Board’s obligation to deliver regular reports. By contrast, repressive measures are warnings or fines.
Liability of the Foundation for its bodies
The Foundation shall be liable for the actions of its organs (art. 55, Swiss Civil Code) in contract or tort. This means that the Foundation and all its assets shall be liable for all obligations entered into by its bodies. The Foundation shall also be liable for its assistants in accordance with the statutory liability of principals (art. 55, Swiss Code of Obligations).
Liability of the Foundation Board
The liability of the Foundation’s bodies (e.g. the Foundation Board) to the Foundation arises from art. 55, Swiss Civil Code. Should the Foundation Board breach its duties, it shall be liable for the damages caused, and must make amends for them. In the case of an honorary position, liability may take a milder form (analogous to art. 99, para. 2, Swiss Code of Obligations). The Foundation Board’s duty of care arises either from the members’ employment contract (art. 319 ff, Swiss Code of Obligations) or from contract law (art. 394 ff, Swiss Code of Obligations). Further duties can be found in the deed of foundation, in law, in regulations, and in the Foundation’s rules and regulations.
If the Foundation Board has delegated a task lawfully, it is not liable for any damages insofar as it can demonstrate the careful selection, instruction and supervision of the third party.
The Foundation Board is liable to the Foundation with all of its private assets if it causes damages due to an error. The Foundation Board must be culpable for the error e.g. it must have violated the usual standards of care that can be expected from the average person.
The beneficiaries (the recipients of the Foundation’s services) can only claim direct damages against the Foundation Board. If, due to the poor management of the Foundation’s assets, a beneficiary suffers an indirect pecuniary loss, this cannot be claimed. There remains only the option of alerting the supervisory authority.
Claims against the Foundation Board’s responsibility shall lapse after 10 years (art. 127, Swiss Code of Obligations).
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