“We don’t need GTC.”
I hear this sentence regularly. Mostly from entrepreneurs who provide their services properly, write their invoices cleanly, and prefer to keep contracts lean. Sounds reasonable. However, in the event of a dispute, “lean” surprisingly often ends up as “unregulated.”
Because no: There is no general obligation in Germany to use GTC. The law does not compel anyone to do so. It only regulates what applies if GTC are used – and what happens if clauses are ineffective or were never effectively incorporated (Section 305 et seq. German Civil Code). In such cases, the law ultimately steps in again.
That is the actual point: Anyone who does not use GTC does not save on legal matters. They forgo structuring. And that is precisely what becomes expensive as soon as the first customer fails to pay, the first order gets out of hand, or the first dispute over defects becomes larger than the project.
1 | What actually happens without GTC
Without GTC, it’s not a case of “nothing at all” applying. The statutory model applies, supplemented by individual agreements. Harmless – as long as both sides understand the contract in the same way.
In practice, precisely the points that are intended to prevent future disputes are missing: When is a service accepted? By when must payment be made? What happens in case of delays? How are additional requests billed? Who is liable for what? Which jurisdiction applies in the B2B sector? Does delivered goods remain your property until payment?
Without contractual structuring, in case of doubt, the statutory basic rules apply: performance is generally due immediately (Section 271 German Civil Code), default often requires a reminder (Section 286 German Civil Code), a place of jurisdiction can only be agreed upon in the B2B sector under the conditions of Section 38 German Code of Civil Procedure, and a retention of title does not simply appear – it must be agreed upon (Section 449 German Civil Code).
Without GTC, you do not have a legal vacuum. You simply have far less control.
2 | Why this becomes a problem especially for entrepreneurs
The law is not a business concept. It is a framework. And it surprisingly rarely fits the specific business model exactly.
Those who sell goods need different regulations than an agency. Those who provide work services need different ones than a SaaS provider. Those who sell to consumers need different ones than someone who operates exclusively in the B2B sector. In consumer business, the scope for maneuver is narrower anyway. GTC law applies particularly strictly there – and many things that can still be shaped in business-to-business transactions quickly become ineffective vis-à-vis consumers. In the B2B sector, more structuring is possible – but only if structuring is done at all.
The typical fallacy: “If I don’t regulate anything, nothing can be challenged.” This is about as clever as foregoing brakes because you then don’t have to worry about brake wear.
3 | Three typical cases from practice
The craft business without clear acceptance rules. The service has been rendered. The customer has long been using the work. Nevertheless, payment is not made in full because allegedly “something is still outstanding.” Without clear rules on acceptance, cooperation, and amendments, this turns into a tedious back and forth. Section 640 of the German Civil Code provides clear mechanisms for acceptance. Precisely defining the rules of the game in advance regularly saves subsequent discussion.
The agency without clear contract logic. A website is “almost finished.” The customer finds it “not quite right yet.” The agency believes it has long been deliverable. Without clear rules on scope of services, correction loops, and approvals, a normal order turns into a perpetual construction site with invoice disputes. GTC cannot work miracles here. But they can clearly define what is owed – and what is not.
The online shop with incomplete legal texts. Anyone who sells remotely and does not properly inform consumers about their right of withdrawal risks that this right does not end after 14 days, but only twelve months and 14 days later (Section 356 (3) German Civil Code). Economically, the effect is the same: lack of structuring, unnecessary risk.
4 | Bad GTC are not the solution
Second classic: There are GTC – but they come from a generator, from an industry forum, or from the gut feeling of a cousin who “also had something to do with law.”
Bad GTC do not help. Bad GTC create a false sense of security. Ineffective clauses do not invalidate the entire contract; instead, the statutory provisions simply apply (Section 306 German Civil Code). So you rely on a regulation that will not hold up in an emergency.
Typical missteps: blanket exclusions of liability even for personal injury – inadmissible under Section 309 No. 7 German Civil Code. Excessive price adjustment clauses – quickly challengeable in consumer contracts, Section 309 No. 1 German Civil Code. Or amendment mechanisms along the lines of “Whoever does not object agrees to everything” – at least blanket, unlimited fictions of consent have been clearly rejected by the Federal Court of Justice (BGH, judgment of 27.04.2021 – XI ZR 26/20).
No GTC are a risk. Bad GTC are a risk with a false sense of security. Almost the more elegant wrong decision.
5 | What companies should do instead
The sensible question is not “Do I need GTC?” – but: Which aspects of my business model should I manage cleanly through contracts?
This typically includes: service description (what do you owe – and what precisely not?), payment regulations (due date, advance payments, default), acceptance and cooperation (indispensable for work and project contracts), liability (not limitless, but also not formulated blindly to the law), retention of title in the B2B sector (Section 449 German Civil Code), and, if applicable, place of jurisdiction (Section 38 German Code of Civil Procedure).
And then the unromantic part: Do not write GTC once and then leave them untouched for ten years. Case law changes. Business models change. Processes change. It would be strange to assume that precisely the contract terms remain unaffected by this.
6 | Conclusion
GTC are not a legal obligation. That is correct. But it does not follow that one should do without them. It only follows that one must make the decision consciously – and not out of habit, convenience, or hope.
Because if you do not structure your contracts, someone else will in the event of a dispute: the law, the opposing party, or ultimately the court. And none of these three primarily works on your margin.
Key takeaway: Those who do not structure their contracts still have contracts – just not ones that work for them.
Are you unsure whether your GTC are still valid – or whether your business model even needs them? I will examine what makes sense for your company, what can be legally structured effectively, and where standard texts do more harm than good. Contact us →
