5 Tips for Drawing up General Terms and Conditions
Addressees:
Before drawing up general terms and conditions (GTCs), the drafter needs to define who exactly the GTCs are addressed to:
If, for example, the GTCs are the general terms of use for a website, they need to be addressed to all visitors of the website.
If paid services are offered via the website, the general terms should provide information on the rights and obligations arising from this particular customer relationship.
If various types of services are offered to different customer groups, the rights and obligations in respect of the various services should be listed individually.
Purpose:
The law provides specific rules on the rights and obligations of the contracting parties for certain types of contracts (e.g. agency or sales contracts). Most of these statutory provisions are not mandatory, and the contracting parties may agree otherwise among themselves.
In this regard, GTCs serve the same purpose as an individual contract. In effect this means that it is not necessary to repeat what is already stated in the law, but provisions that deviate from the law must be included.
Content:
As is generally the case in contract law, drafters also have extensive leeway regarding the content of general terms and conditions. But some legal restrictions must still be observed. For example, it is not possible to exclude liability for intentional and grossly negligent acts, and the law requires the inclusion of mandatory provisions to protect the weaker party to the contract. In addition, terms and conditions must not prejudice consumers unfairly.
Typically, GTCs are structured as follows:
Scope of application – who do the GTCs apply to and to what extent
Range of services – a description of the services and prices offered
Conclusion of contract – how to accept a quotation and place a binding order
Rights and obligations of parties – these include provisions on performance, payment terms, and the legal consequences of non-performance or poor performance
Final provisions including applicable law and place of jurisdiction
Form:
Unlike a negotiable individual contract, GTCs are typically written by one party and accepted by the other.
If the customers addressed are meant to actually read the terms and conditions before concluding the contract, they must be kept as short and clear as possible.
Overcomplicated terms and conditions can lead to the other party consenting without an actual understanding of the GTCs and the later realization that they do not actually consent to what has been agreed. This creates legal uncertainty, which can have a negative impact on both parties.
There are no special formal requirements for general terms and conditions, but they must be provided in a readable form. When concluding a contract electronically, the general terms and conditions can also be accepted through a mouse click.
Where the general terms are accepted but not actually read by the accepting party, the term “global acceptance” (Globalübernahme) is used. A global acceptance may, in contrast to the so called “full acceptance” (Vollübernahme), limit the enforceability of GTCs.
Enforcement:
With regard to the enforcement of general terms and conditions, the following should be noted:
If GTCs have been accepted through global acceptance, it must be checked whether the "unusualness rule" (Ungewöhnlichkeitsregel) applies. This means that unusual clauses that a customer could not reasonably have expected under given circumstances are not enforceable.
Under the "ambiguity rule" (Unklarheitsregel), unclear or ambiguous wording in GTC clauses shall be interpreted at the expense of the drafter.
Consequently, when drafting GTCs, wording should always be clear and easy to understand. The accepting party should also be made aware of clauses that are unusual for the contractual relationship in question or which are particularly important to the drafter and asked to explicitly agree to them.