Contract Law in Germany

Contract Law in Germany

Updated on Tuesday 24th November 2015

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Contract-Law-in-GermanyThe Law of Obligations in Germany

Investors doing business in Germany nowadays rely on the importance of contracts as means of ensuring the success of their companies. The German Civil Law regulates the legal implications of contracts through the Law of Obligations. The German legislation on contracts is made up of several parts among which the Law of Contracts, the Sales Law and the Law on Employment Contracts. Each part of the Law of Obligations covers a certain aspect of contractual relations. The German Contract Law is the most important for companies going into business with other companies.

In 2002 the German Contract Law was modernized in order to comply with European Directives related to consumer goods, e-commerce and commercial transactions.

Entering an agreement under the German Contract Law

The Contract Law in Germany guarantees the right to enter an agreement. German companies are allowed to enter any contract as long as they do not breach any other law related to the object of the contract. The contract legislation also specifies that an agreement can be concluded orally or in a written form. However, the most common type of contract used in Germany is the written one. Contracts can take any form the parties agree upon and may contain specific clauses, such as confidentiality clauses which are currently very popular in Germany.

Our German attorneys can help you draft contracts in accordance with the current legislation.

Concluding a contract under the German legislation

The conclusion of a contract in Germany is based on offer and acceptance. The parties entering the contract must acknowledge all the standard terms of the agreement as established by the German legislation on contracts. All types of contracts must contain standard terms, except for contracts falling under the governance of the German Family Law related to marriage, divorce or child maintenance.

It must be taken into account that the contract legislation does not provide for comprehensive rules on the breach of contract which is why it is advisable to request the legal services of a German law firm before entering an agreement. You can also contact us if you need legal assistance in litigation cases related to contractual matters.