Standard terms and contract drafting
Contracts are the foundation of legal dealings. How they are drafted decides whether your interests are reflected in them.
We support you in reviewing and drawing up sales contracts, service contracts, contracts for work and much more. Alongside individual contracts we draft particular types such as the framework agreement. Standard terms, finally, are a central part of many business processes, towards consumers as much as in business dealings.
Individual contract or standard terms
Individual contract
- Negotiated in detail and therefore largely free in its drafting
- Carries the particularities of the specific project
- The effort arises again with every deal
- Sensible for major clients and for projects with their own structure
Standard terms
- Pre-formulated for a multitude of uniform contracts
- Subject to strict review of their content
- An invalid clause is struck without replacement and the statute applies
- Sensible for volume business, but to be reviewed carefully
How standard terms become part of the contract at all
Before a clause is reviewed on its substance, the question is whether it applies at all. In practice that step is often skipped, and it decides disputes more often than the content review does.
Towards consumers section 305(2) of the German Civil Code requires an express reference at the time of contracting, a reasonable opportunity to take notice, and agreement. Online a clearly placed link under which the text can be retrieved and saved will as a rule satisfy that. Sending the terms only with the invoice does not.
Between businesses section 305(2) does not apply. There it is enough that the other side agrees to the terms applying and is able to obtain the text. In an ongoing business relationship inclusion may follow from established practice.
Two rules apply regardless. Surprising clauses do not become part of the contract under section 305c(1), and doubts in interpretation are resolved against the party that put the terms forward under section 305c(2).
Where we support you
- Review and drafting of sales, service and works contracts
- Mixed contracts of the kind that are the rule in IT projects
- Framework agreements, including which provision prevails in a conflict
- Standard terms for consumers and for business dealings
- Review of the terms proposed by the other side before you sign
- Adjustment of existing terms to a changed legal position
A draft on the table?
Send it to us. You get an assessment before you sign.
Have a contract reviewedFrequently asked questions
Do we need standard terms or an individual contract?
It depends on how often the transaction repeats. Standard terms are meant for uniform business and are policed strictly for that reason. An individual contract allows more room but costs effort on every deal. The combination is often right: standard terms for volume business, individual contracts for major clients.
What happens if a clause is invalid?
It is usually struck without replacement and the statutory rule takes its place. There is no reduction to what would just about have been permissible. That makes an overreaching liability clause more dangerous than a modest one, because you end up facing unlimited liability.
Is a link to the terms in the order process enough?
Towards consumers section 305(2) of the German Civil Code requires three things: an express reference at the time of contracting, a reasonable opportunity to take notice, and agreement. A clearly placed link under which the text can be retrieved and saved satisfies that as a rule. Sending the terms only with the invoice does not suffice, because by then they are no longer part of the contract concluded.
Do the same clause prohibitions apply between businesses?
Not directly. The lists in sections 308 and 309 of the German Civil Code address contracts with consumers. Between businesses the review runs through the general clause in section 307, with the lists serving as guidance. The room for manoeuvre is therefore larger, but considerably smaller than often assumed: between businesses too an invalid clause falls away without replacement.
The other side insists on their standard terms. Do we have to accept that?
Not unchecked. Where two sets of terms contradict each other, in business dealings neither usually prevails and the statutory rules apply. Knowing that changes how you negotiate. We work out which points you genuinely have to win and where the statute already gives you the better rule.