Standard Contract Terms Act (Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen, AGB-Gesetz) - Excerpts

Note: The Standard Contract Terms Act was repealed with effect of 1 January 2002 and replaced by §§ 305 et seq. of the German Civil Code .

Section I

Subsection 2: Void Clauses

§ 8. Scope of control of content

9 to 11 apply only to provisions in standard contract terms stipulating regulations which deviate from, or supplement, statutory provisions.

§ 9. General clause

(1) Provisions in standard contract terms are void if they unreasonably disadvantage the contractual partner of the user contrary to the requirements of good faith.
(2) In case of doubt, a provision is unreasonably disadvantageous if

  1. this provision is irreconcilable with essential basic principles of the statutory provisions from which the terms deviate, or
  2. essential rights or duties arising from the nature of the contract are restricted to a degree which jeopardizes the purpose of the contract being attained.
§ 10. Void clauses subject to reasonableness test

In particular, the following provisions are void in standard contract terms

  1. (Periods of time for acceptance and performance)

  2. a provision by which the user reserves for himself unreasonably long or insufficiently determined periods of time for accepting or refusing to accept an offer or for effecting performance;
  3. (Periods of grace)

  4. a provision by which the user, contrary to § 326 subs. 1 BGB, reserves an unreasonably long or insufficiently determined period of grace for the performance which he is to effectuate;
  5. (Reservation for terminating the contract)

  6. the stipulation of the user's right to free himself from his obligation to perform without a reason which is objectively justified and named in the contract; this does not apply to continuing contracts;
  7. (Reservation for amending the contract)

  8. the stipulation of the user's right to modify, or to deviate from, the promised performance, unless, when considering the interests of the user, such stipulation of modification or deviation is not asking too much of the other party;
  9. (Constructive declarations)

  10. a provision whereby a certain act or omission by the user's contractual partner is considered as a declaration made or not made by this party, unless
    1. (a) the contractual partner is granted a reasonable period of time to make an express declaration and
      (b) the user undertakes to indicate specifically to the contractual partner the envisaged meaning of his conduct at the beginning of this period of time;
  11. (Constructive receipt of communication)

  12. a provision according to which a declaration by the user which is of particular significance is deemed to have reached the other party;
  13. (Winding up of contracts)

  14. a provision which entitles the user, in case one of the parties to the contract terminates the contract or gives notice of termination, to demand
    1. (a) an unreasonably high remuneration for the use of a corporeal object, of a right or for performance made or
      (b) an unreasonably high reimbursement of expenditure;
  15. (repealed)
§ 11. Void clauses not subject to reasonableness test

The following provisions are void in standard contract terms:

  1. (Short-term price increase)

  2. a provision which envisages a price increase for goods or services which are to be delivered or provided within four months after the conclusion of the contract; this does not apply to goods or services provided under continuing contracts;
  3. (Rights to suspend performance)

  4. a provision whereby
    1. (a) the right to suspend performance which accrues to the contractual partner of the user under § 320 of the Civil Code (BGB), is excluded or restricted, or
      (b) a right of retention belonging to the contractual partner of the user, to the extent that it arises from the same contractual relationship, is excluded or restricted;
  5. (Prohibition of set-off)

  6. a provision by which the contractual partner of the user is deprived of his entitlement to set-off with a claim which is undisputed or has become res iudicata;
  7. (Warning, fixing of period)

  8. a provision by which the user is exempted from his statutory obligation to warn the other party, or to fix a period of grace;
  9. (Liquidated damages)

  10. the stipulation of the user's right to claim liquidated damages or compensation for diminuition of value, if
    1. (a) the stipulated lump sum exceeds the damage or diminuition of value to be expected for the provided cases in the ordinary course of events or
      (b) the other party to the contract is not allowed to prove that no damage or loss of value has occurred, or that the damage or the loss amounts to considerably less than the lump sum;
  11. (Penalty)

  12. a provision whereby the payment of a penalty is promised to the user in cases of failure to take delivery, of delay in taking delivery, of late payment, or in case the other party withdraws from the contract;
  13. (Liability for gross negligence)

  14. an exclusion or limitation of liability for a damage which is based on a grossly negligent breach of contract by the user, or on a wilful or grossly negligent breach of contract by a statutory agent of the user, or by a person employed by the user for the performance of his obligation; this also applies to damage resulting from the violation of duties during contractual negotiations;
  15. (Delay, impossibility)

  16. a provision by which, if the user is in delay of performance, or if he is responsible for performance being impossible,
    1. (a) the right of the other contractual party to withdraw from the contract is excluded or restricted or
      (b) the right of the other contractual party to claim damages is excluded or restricted in violation of no. 7;
  17. (Partial delay, partial impossibility)

  18. a provision wich, if the user is in delay of part of his performance, or if he is responsible for performance being partially impossible, excludes the right of the other contractual party to claim damages for non-performance of the entire obligation, or to terminate the entire contract, if partial performance of the contract is of no interest to this party;
  19. (Liability for defects)

  20. a provision by which, for contracts for the supply of newly produced goods or services,
    1. (a) (Exclusion and reference to third parties)
      claims against the user for liability for defects including any rights for removal of defects or for delivery of a substitute are excluded in total or in regard of individual parts, are limited to providing claims against third parties, or made conditional on previous court litigation against third parties;
      (b) (Limitation to removal of defects)
      claims against the user for liability for defects are limited in total or in regard of individual parts to removal of defects or delivery of a substitute, unless there is an express reservation of the right of the other contractual party, once removal of defects or delivery of a substitute has failed, to claim reduction of the price or, unless the liability arises from the performance of building operations, instead to choose to terminate the contract;
      (c) (Expenditure for removal of defects)
      the obligation of a user who is liable for defects to bear the expenditure which becomes necessary for the purpose of removing defects, in particular costs for transport, journey, labour, and materials, is excluded or restricted;
      (d) (Withholding removal of defects)
      the user makes the removal of a defect, or the substitute delivery of a corporeal object free from defects, conditional on previous payment of the entire price, or of a part of the price which, when considering the defect, is disproportionally high;
      (e) (Cut-off period for notification of defects)
      the user fixes for the other party a cut-off period for the notification of defects which are not obvious, whereby this period is shorter than the limitation period for statutory liability claims for defects;
      (f) (Reduced limitation periods for liability for defects)
      the statutory limitation periods for the liability for defects are reduced;
  21. (Liability for breach of warranty)

  22. a provision in a contract for sale, works, or goods to be manufactured, by which claims against the user for damages under §§ 463, 480 subs. 2, § 635 of the Civil Code (BGB) for breach of warranty are excluded or restricted;
  23. (Duration of continuing contracts)

  24. in a contractual relationship, the object of which is the recurrent delivery of goods, or the recurrent provision of services or works by the user,
    1. (a) a duration of the contract which binds the other contractual party for more than two years,
      (b) a tacit extension of the contractual relationship for more than one year at a time which is binding on the other contractual party or
      (c) a period of notice, burdening the other contractual party, in excess of three months before lapse of the initially envisaged, or tacitly extended, duration of the contract;
  25. (Change of contractual partner)

  26. a provision according to which, in contracts for sale, services or works, a third party will or can, in the user's place, take over the rights and duties arising from the contract, unless this provision
    1. (a) indicates the the third party by name, or
      (b) grants to the other contractual party the right to withdraw from the contract;
  27. (Liability of contracting agent)

  28. a provision whereby the user burdens an agent who enters into the contract on behalf of the other contractual party,
    1. (a) with the agent's own liability or guarantee, without an express and separate declaration to this effect or
      (b) in cases of agents acting without authority, any liability exceeding what is envisaged by § 179 of the Civil Code (BGB);
  29. (Burden of proof)

  30. a provision by which the user changes the burden of proof to the disadvantage of the other contractual party, in particular by
    1. (a) placing on this party the burden of proof for circumstances which are within the user's area of responsibility;
      (b) making the other party acknowledge specified facts.
    Letter (b) does not apply to acknowledgements of receipt which are signed separately;
  31. (Form of notifications and declarations)

  32. a provision whereby notifications or declarations, which must be made towards the user or a third party, are subjected to form requirements stricter than written form, or to special requirements for effectuating receipt.
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© 1997 Gerhard Dannemann.This translation first appeared in The German Law of Obligations, Vol. I: The Law of Contracts and Restitution, by B.S. Markesinis, W. Lorenz and G. Dannemann, Oxford University Press 1997. Reproduced by permission of Oxford University Press.The contents of this page may be downloaded and printed out in single copies for individual use only. Making multiple copies without permission is prohibited.