General terms and conditions in Germany, how does that actually work?

If you enter into an agreement with a German party, the question may arise as to which law applies to that agreement. Is it Dutch law or German law? If you haven’t made any agreements on this matter in the agreement or general terms and conditions, you’ll find the answer in a European regulation (the ‘Rome I’ Regulation). This regulation stipulates that the law of the country where the supplying party is established applies. So, if you supply a product or service to a German customer, Dutch law generally applies.

Do you supply to consumers (B2C)? Then, in certain circumstances, German law may also apply. Regardless of the applicable law, your terms and conditions must comply with German consumer law.

Vienna Sales Convention (CISG)

Do you supply movable property to a professional party (B2B)? Then you may also need to consider the provisions of the Vienna Sales Convention (CISG). This convention contains provisions regarding, among other things, the quality, payment, delivery, and non-conformity of goods, as well as the termination of sales contracts. Incidentally, the CISG itself defines what is considered “moveable property.” This may mean that even contracts that you would classify as construction in the Netherlands—for example, prefabricated construction—fall under certain conditions under the CISG.

The CISG will only not apply if you have expressly excluded the applicability of this Convention in the agreement or the general terms and conditions.

Note: it can be advantageous, especially for sellers, not to exclude the Vienna Sales Convention. It’s important to seek advice on this before doing cross-border business.

Is your agreement governed by German law? Then it’s important that your general terms and conditions (in German: Allgemeine Geschäftsbedingungen , or AGB ) don’t conflict with it. While German and Dutch law are very similar, there are some important differences.

In Germany, for example, it’s much more difficult to limit or exclude your liability in general terms and conditions than in the Netherlands. The rules regarding retention of title are also different. Germany has a broader retention of title policy than the Netherlands. You can read more about this in this blog post.

Do you do business with consumers? Then, as previously mentioned, you must also comply with German consumer law. Therefore, it’s always wise to have general terms and conditions drawn up in accordance with German law if German law applies.

Regardless of the applicable law, if you want to rely on your general terms and conditions, they must also apply to the agreement. Therefore, you must make your general terms and conditions available in German. In many cases, this can be done in the same way as in the Netherlands.

But beware: unlike in the Netherlands, it’s not possible to file general terms and conditions with the Chamber of Commerce in Germany. Therefore, simply referring to the Chamber of Commerce is not sufficient.

What can you do?

• Include your terms and conditions on your website (and refer to them explicitly); or
• Add your terms and conditions to the quotation or contract.
• Do you do business with German consumers, for example, through an online store? Then you must make the terms and conditions available in German via the website (in the same way as in the Netherlands). In doing so, you must also comply with German consumer law.

NB:

• Does the CISG apply to the agreement? Then the CISG also applies to the applicability of the general terms and conditions, even if the general terms and conditions themselves state that the CISG does not apply to the agreement. Under the CISG, general terms and conditions only apply if you submit them. In that case, a link on the website is not sufficient.
• In Germany, it’s common practice in B2B transactions to exclude the other party’s terms and conditions in one’s own terms and conditions. Caution is advised in such a “battle of forms.”

Are you doing business in Germany and have questions about general terms and conditions or the Vienna Sales Convention? Or would you like to have general terms and conditions drawn up under German law? Then Heisterborg International is happy to help.