Commercial law | General terms and conditions (GTC)

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General Terms and Conditions (GTC) are supplementary provisions of a contract. General terms and conditions have become an integral part of today’s business world. The GTC usually aim to modify the legal requirements in favour of the user, to facilitate and standardize the conclusion and execution of the contract. The use of general terms and conditions is a significant simplification for the parties, especially if similar contracts are concluded many times, as the framework conditions do not have to be renegotiated with each customer.

General terms and conditions are therefore pre-formulated contractual conditions for a large number of contracts, which one contracting party (user) specifies to the other contracting party when concluding a contract. Clauses that belong to the general terms and conditions can be found in almost all contracts, be it employment contracts, purchase contracts, contracts for work, rental contracts, telephone service contracts and many more. It is irrelevant whether the provision forms a separate external part of the contract (colloquially referred to as “small print”) or is included in the contractual document itself. Furthermore, it is irrelevant in which font they are written and what form the contract takes (Section 305 (1) BGB).

General terms and conditions must be effectively included in order to become part of the contract. When general terms and conditions become part of the contract depends in particular on whether the recipient is a consumer in accordance with Section 13 BGB or an entrepreneur in accordance with Section 14 BGB.

Pursuant to Section 305 (2) of the German Civil Code (BGB), general terms and conditions shall only become part of the contract between the contracting parties in relation to consumers if the user expressly states this upon conclusion of the contract or, if this is only possible with disproportionate difficulty, by means of a clearly visible notice at the place where the contract is concluded. Conclusion of contractAt the same time, Section 305 (2) No. 1 BGB) gives the other contracting party the opportunity to take note of the content of the general terms and conditions in a reasonable manner (Section 305 (2) No. 2 BGB).

For general terms and conditions between two entrepreneurs (Section 14 BGB), however, this does not apply in accordance with Section 14 BGB. § 310 BGB. All that is required here is legal inclusion, i.e. the usual requirements for the conclusion of contracts apply. This also means that any tacit agreement is sufficient for effective inclusion.