Lloyd's Maritime and Commercial Law Quarterly
THE NEW GERMAN LAW ON STANDARD CONTRACT TERMS
Wolfgang Freiherr von Marschall
Professor of Law; Director of the Institute of International Private Law and Comparative Law, University of Bonn.
Introduction
The German Law on Standard Contract Terms,1 which came into force on Apr. 1, 1977, is the first general statutory regulation of its subject-matter in Germany.2 It aims at protecting parties to contracts from the application of terms which are regarded as unfair, whenever such provisions appear in a set of standard contract terms.3 The Law thus takes its place with other statutory regulation of unfair contract terms recently brought into operation in Europe: in Sweden (1971), Denmark (1973), the United Kingdom (1977),4 Finland (1978) and France (1978). Proposals for similar legislation are under consideration or further advanced in several other European countries.
The Law is not directed at all contracts (as is similar legislation in the United States)5, nor at consumer transactions (as to a considerable extent is the legislation in Sweden), nor at exclusion clauses (as are the most conspicuous parts of that in the U.K.):6 but rather at standard contract terms. For an understanding of the reasons why the Law is thus directed, it must be seen against the background of general contract law derived from the Civil Code and the case law developed in Germany over the last decades.
Background
The problem of standard contract terms had not yet been recognised in Germany when the Civil Code came into force on Jan. 1, 1900. The Code, however, contains certain general provisions which are applicable to all kinds of contracts. Most important is s. 138, which declares null and void any clause in a contract that is contra bonos mores, that is, not in accordance with the standards of persons who think and act fairly and justly, as the German Supreme Court has interpreted the term boni mores.7 This section has been used against contract clauses which appear grossly
1 Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen (AGB-Gesetz) of Dec. 9, 1976, Bundesgesetzblatt 1976 I 3317, in force since Apr. 1, 1977.
2 Provisions for protection against abuses in special types of business have been known for a long time. A good example is the German Law on Instalment Sales of 1894; see von Marschall, “Legal Aspects of Instalment Selling and Instalment Sales Financing in Germany”, 19 Business Lawyer 409 (1964).
3 The importance of the new Law is evidenced by the number of commentaries already published. Among special commentaries are the following:— Dietlein/Rebmann, AGB aktuell (Köln, Bundesanzeiger-Verlags-ges. 1976); Koch/Stübing, AGB (Neuwied, Luchterhand Verlag, 1977); Löwe/Graf von Westphalen/Trinkner, Kommentar zum Gesetz zur Regelung des Rechts der Allgemeinen Geschäftsbedingungen (Heidelberg, Verlagsges. Recht und Wirtschaft, 1977); Schlosser/Coester-Watjen/Graba, Kommentar zum Gesetz zur Regelung des Rechts der AGB (Bielefeld, Gieseking, 1977); Schmidt-Salzer, AGB, 2nd edn. (Munich, C. H. Beck, 1977); Ulmer/Brandner/Hensen, AGB Kommentar, 3rd edn. (Köln, Verlag O. Schmidt, 1978). Commentaries on the Law can also be found in the new editions of the Commentaries on the German Civil Code, for example Münchner Kommentar, vol. 1 (by Kötz and Gerlach), Palandt (by Heinrichs and Heldrich).
4 Unfair Contract Terms Act 1977; an earlier, more limited provision was the Supply of Goods (Implied Terms) Act 1973.
5 Uniform Commercial Code, s. 2–302.
6 The Unfair Contract Terms Act 1977 does not stand completely alone: it should be viewed together with the powers conferred on the Director-General of Fair Trading by the Fair Trading Act 1973 and the Restrictive Trade Practices Act 1976.
7 Reichsgericht, judgment of Oct. 15, 1912, RGZ 80,219; Bundesgerichtshof, judgment of Dec. 22, 1959, Lindenmaier-Möhring, Nachschlagewerk, s. 138 (Aa) BGB No. 7a.
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