Do we need general terms and conditions and how do we design them correctly?

General terms and conditions (GTC) are pre-formulated contract conditions for a large number of contracts (at least 3), which one contracting party (user) specifies to the other contracting party when concluding a contract. One-time use is sufficient for end consumers, provided that they cannot influence the content due to the pre-formulation. An important feature of the terms and conditions is that they are unilaterally introduced into the contract by the user. The terms of the contract are therefore not negotiated individually between the contracting parties.

The paragraphs of the German Civil Code (formerly the General Terms and Conditions Act) that apply to the control of general terms and conditions set limits for the small print - which are often also called general terms and conditions - in favor of the contractual partner. Violating the ABG provisions could result in significant legal consequences for the user.

We therefore generally advise against creating general terms and conditions yourself or even using external general terms and conditions without checking them. The permissible wording of general terms and conditions can vary for individual sectors. The clauses must be formulated for the company in the special individual case. If an inadmissible provision is used, the legal regulation applies in the event of a dispute, which is usually less favorable than one permitted under the General Terms and Conditions Act. Only a specialized lawyer can understand the rather confusing case law on the admissibility of individual clauses, which must be observed. We therefore recommend that you hire a lawyer to draw up the general terms and conditions.

Are terms and conditions necessary?

General terms and conditions are an integral part of today's business life. They create a uniform and detailed regulation of the legal relationships for the mass contract and thereby simplify business transactions. They are usually even indispensable if there is no legal regulation for the desired type of contract (e.g. factoring, leasing, franchise contract) or is not sufficient or does not fit because of changed economic circumstances. They also make it possible to further develop inappropriate laws through new regulations (e.g. introduction of a right to rectification in sales law) or to specify vague legal terms (if the law only speaks of "reasonable" deadlines, these can be specified in the general terms and conditions to be determined).

Although there is no obligation to use general terms and conditions due to the contractual freedom, it is usually advisable in operational practice to draw up and use general terms and conditions for the above-mentioned reasons of expediency.

How are general terms and conditions to be designed?

In general, the user of the GTC is subject to a requirement of comprehensibility. They must be formulated in such a way that a non-lawyer can understand them (therefore, for example, the clause: "§ 627 BGB is inapplicable") is invalid. The customer must be able to take note of them in a reasonable manner. This includes that the terms and conditions used must be readily perceptible and legible (e.g. not just with a magnifying glass).

How are general terms and conditions part of the contract?

Since the terms and conditions are not automatically included in the contract, even the best terms and conditions without inclusion (so-called inclusion agreement) are worthless.

In business transactions with private consumers, strict standards must be applied due to their special need for protection with regard to the inclusion requirements:

There must be an explicit reference to the terms and conditions when the contract is concluded.

It is not sufficient if the user has printed his terms and conditions on the back of the offer letter, but does not refer to them on the front. Even the first reference to the validity of the General Terms and Conditions in invoices, receipts, delivery notes and order confirmations is made too late! If there is no personal contact with the customer, such as in multi-storey car parks, car washes, etc., a clearly visible notice of the General Terms and Conditions is sufficient. This should also suffice in shops, as long as low-value mass-produced articles are sold there.

In the opinion of some courts, it is not sufficient for contracts to be concluded electronically to refer to the General Terms and Conditions with a button or link. In the case of offers on the Internet, the user must point out that general terms and conditions should be included in the contract. Technically, this can be done in that an order can only be made if the alternative "Inclusion of the General Terms and Conditions" has been clicked on beforehand. The interested party must be able to copy particularly extensive terms and conditions free of charge by downloading them.

Furthermore, the user of the GTC must offer the other contracting party the opportunity to take note of the content of the GTC in a reasonable manner. This is usually achieved by presenting clear terms and conditions to the customer. Whether or not he actually reads them is up to him. For this reason, the customer can also completely dispense with the submission of the general terms and conditions (evidence problem!), which is particularly important when contracts are concluded by telephone. If he is not willing to do this, the contract can also be concluded by telephone under the condition precedent that the customer subsequently approves the general terms and conditions to be sent to him.

In the case of contract offers on the Internet, the customer should be able to save the GTC on his hard drive and, if necessary, also print them out. The focus should be on the average customer, i.e. the user does not need to have a translation of the general terms and conditions ready for foreigners living in Germany. In cross-border business transactions, however, care must be taken to ensure that the reference to the General Terms and Conditions and their text are written in the language of the transaction (or in a world language - English, French).

Finally, the customer must agree to the validity of the terms and conditions,

which is always the case if he agrees to the conclusion of the contract if the above-mentioned conditions are met.

In the case of contracts with tradespeople and freelancers, it is sufficient for the customer to be able to recognize the contractual partner's intention to include general terms and conditions and not object to this. For reasons of legal certainty, however, an explicit reference to the use of the General Terms and Conditions is recommended here as well.

If the contractual partners are in ongoing business relationships and if these are regularly based on general terms and conditions, the customer is obliged to expressly object to the inclusion of the previously used general terms and conditions if he no longer agrees to their validity. The same applies if certain general terms and conditions are always used as a basis (especially in the forwarding, banking, insurance industry). If both contracting parties use general terms and conditions, only the corresponding clauses apply. Otherwise, the corresponding legal regulation applies (e.g. if the clause "Postage is borne by the buyer" is opposed to the clause "Transport costs are borne by the seller", the buyer bears the costs).

Is each clause effective?

In order to counteract the risk that users of GTCs pursue their interests unilaterally at the expense of the contractual partners by exploiting their economic or intellectual inferiority (the scope of the GTCs is usually not foreseeable for the customer), GTCs are subject to GTCs insofar as they change legal provisions or supplement them, a content control. A clause is invalid if it unreasonably disadvantages the contractual partner. The standards are set by the General Terms and Conditions Act, which also contains a catalog of prohibited clauses.

The following clauses, for example, are then ineffective:

in contracts with end users A provision in the General Terms and Conditions, according to which the user's liability for grossly negligent breaches of contract is also excluded, is ineffective. A clause that provides for the increase of a fee for goods or services that are to be delivered or provided within 4 months is also inadmissible.

Example:
The customer buys a bike for 400 euros, which the dealer does not have in stock and can therefore only be delivered in 2 months. If the list price has increased by 50 euros on the day of delivery, this cannot be passed on to the customer.

§§ 474 ff BGB apply to the purchase of consumer goods. To the detriment of the consumer, the right to purchase can largely no longer be waived by contractual agreements. On the other hand, it is permissible to reduce the limitation period for claims for defects in used items to one year. A complete exemption from any liability for claims for defects is no longer possible, even in the case of used items.

Inadmissible in contracts with end users and companies:

Repair services only against advance payment The right of a customer to offset an undisputed counterclaim is excluded as well Jurisdiction agreements, insofar as they are used with private individuals or traders who are not entered in the commercial register.

For example, the following agreement would be permissible: If the customer is a merchant, a legal entity under public law or a special fund under public law, the court at the supplier's headquarters is responsible for all disputes arising from the contractual relationship.

So-called surprising clauses, i.e. such unusual provisions that must not be expected under any circumstances when the contract is concluded, are never part of the contract. Example: Purchase of a used car from a used car dealer with the obligation of the customer to regularly service and repair the car at this dealer to let. Even if the customer has signed this clause, it has no effect.

In the case of unclear or ambiguous clauses, this is at the expense of the user. The interpretation of the clause that is most favorable for the contractual partner then applies, since the user would have had the opportunity to express himself more clearly.

General terms and conditions in business transactions with entrepreneurs

Terms and conditions in business transactions with companies are not subject to quite as strict regulations. Business dealings means that both parties to the contract are companies and includes any commercial or self-employed activity. In this case, a number of provisions of §§ 305 et seq. BGB do not apply. However, for reasons of legal clarity and to avoid later legal disputes, it is advisable to refer to the General Terms and Conditions in every contract offer and thus offer the contractual partner the opportunity to accept the offer under your contract conditions or to enter into new negotiations. If it turns out after the conclusion of the contract that both contracting parties wanted to make their (contradictory) terms and conditions part of the contract, it can usually be assumed that the terms and conditions of both parties only become part of the contract to the extent that they match. With regard to conflicting clauses, the corresponding statutory regulations apply. In contrast to the relationship with the end consumer, the terms and conditions in business transactions with companies are only subject to a limited content control. There is only a general review based on good faith, which is intended to rule out any unreasonable disadvantage to a contractual partner.

If you are in any doubt as to the legality of a particular contract term, you should seek legal advice.