Law on general terms and conditions (GTC), horak Attorneys at Law, Germany

HORAK · LEGAL EXPERTISE

General terms and conditions (GTC) are contractual terms prepared for repeated use and supplied by one party to the other when entering into a contract. Terms individually negotiated between the parties are not GTC to that extent. German law controls their incorporation and content; different rules apply to consumer and business transactions.

Businesses may tailor their GTC to recurring transactions within the limits of the applicable law.

Properly drafted GTC can simplify recurring commercial transactions.

Terms and Conditions, effectiveness and reliability.

GTC must be validly incorporated into the particular contract. Their inclusion does not by itself establish that every clause is valid.

In consumer transactions, the supplier must generally draw attention to the GTC when the contract is concluded, provide a reasonable opportunity to read them and obtain agreement to their application.

A clearly visible notice at the place of contracting may replace an express reference only where such a reference would involve disproportionate difficulty because of the nature of the transaction. This does not follow merely because a contract is oral.

The consumer must have a reasonable opportunity to read the terms and agree to their application. Agreement may be expressed through the conclusion of the contract; a signature is not universally required.

In business transactions with companies:

The specific requirements of section 305(2) and (3) BGB do not directly apply in business transactions. The parties must nevertheless agree that the GTC apply; a unilateral reference after conclusion is generally insufficient.

To avoid misunderstandings, identify the GTC clearly in the offer and make them available to the other party in good time.

An ongoing business relationship or common industry practice does not automatically make silence an acceptance of GTC. Prior agreements, the course of dealing and relevant trade customs must be assessed.

GTC in the online trade

For electronic commerce, section 312i(1), sentence 1, no. 4 BGB requires an opportunity to retrieve and store the contract terms, including GTC, in reproducible form when contracting. Actual downloading or printing is not required. A separate acceptance checkbox is not a universal statutory requirement.

Consumer withdrawal rights for distance and off-premises contracts are governed by the BGB and the EGBGB information requirements. A clause in the GTC does not replace the required clear and timely withdrawal information in the prescribed form.

Formulation of the General Conditions of Business (GTC):

simple formulation suitable for laypeople can be advantageous, when used against consumers;

clear design, comprehensible structure;
"eye-catching" positioning in the contract, written order or order letter and in any case, should be included in the contract before conclusion of the agreement;
compliance with sections 305–310 BGB, including incorporation rules, transparency and the applicable restrictions on clauses;

Consideration of the different regulations for consumer and entrepreneur customers.

Do not simply copy third-party GTC. Conflicting, surprising or unclear clauses may be ineffective. Ambiguities generally operate against the supplier under section 305c(2) BGB; section 306 governs the consequences of invalid clauses.

We also deal with the following topics in GTC law: