Share Sale Non-Compete Penalty Reduction Due to Seller's Financial Hardship

In a dispute arising from the sale of all shares of a company, where the seller agreed to an eight-year non-compete clause with a penalty of CHF 100,000 for breach, the appellate court reviewed the mandatory reduction of the penalty under Art. 163 para. 3 OR, finding the seller’s breach significant, including concerted efforts to circumvent the agreement. Despite the seller's arguments concerning lack of severe fault and disproportionate penalty relative to the purchase price (which the court rejected based on the clause's centrality to the transaction), the court reasoned that the seller's established severe financial difficulties at the time of the contract's conclusion warranted judicial discretion to reduce the penalty to CHF 70,000, as the debtor's precarious economic situation is a valid ground for reduction, even if unknown to the creditor at contracting.