Civil law: Provision of General Terms – The Difficult Demarcation Between General Terms and Individually Negotiated Agreement
Under German law, the law severely limits the scope of General Terms and Conditions. The boundaries for regulations in General Terms are very strict and very friendly towards the other party. The law on general terms and conditions is generally applicable if one party provides contract terms, however, not if the terms constitute an individually negotiated agreement between the parties.
The German courts have defined the several conditions required for an individual agreement. One of those requirements is, that the contract terms must not have been provided by one party. In the decision discussed in this article, the German Federal Court pointed out that the opportunity of the other party to voice remarks and wishes for amendments alone, does not exclude the “provision of the terms by a party”. The Federal Court confirmed again its strict stand on the requirements for individual agreements where even the existence of different versions of a contract in markup-mode has not been accepted as proof of negotiation.
Therefore, we recommend a regular review of any general terms and conditions as well as contract templates by a lawyer specialized on the law of General Terms and Conditions, to ensure the conformity with the applicable law and current jurisdiction.
Dr. Kerstin Kern
Antitrust Law, Company Law And Commercial Law, Distribution Law, Industrial Property Rights, International Legal Relations, Law Of General Terms And Conditions Of Business, Product Liability And Product Safety
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