Many online retailers draft their own Terms and Conditions. Some use a generator, some use ChatGPT, some take a friendly (and illegal) look at their competitors’ terms. This initially seems efficient and cost-saving.
Until the first dispute. Or until the first warning letter.
The problem is not that such texts are “formally not Terms and Conditions.” The problem is far worse: they often provide no effective protection. Ineffective clauses or clauses not effectively incorporated simply fall away. Then the law applies – and in consumer business, this is generally much more customer-friendly than the retailer’s ideal scenario.
Here are the biggest pitfalls I repeatedly observe in practice:
1 | The Terms and Conditions exist – but are not valid
The most common mistake occurs even before any content review: The Terms and Conditions were never effectively incorporated into the contract. Section 305 (2) German Civil Code (BGB) requires a clear reference at the time of contract conclusion, a reasonable opportunity for the customer to take notice, and the customer’s consent.
In an online shop, this means: The Terms and Conditions must be accessible, readable, and storable before the order is placed. A dead link in the footer is not a contract text, but digital decoration.
Hybrid forms are particularly tricky: The Federal Court of Justice (BGH) ruled on July 10, 2025 (Ref. III ZR 59/24) that a mere reference in postal contract documents to Terms and Conditions available online is not a reliable basis for their effective incorporation. Anyone working with paper forms, PDF offers, or hybrid ordering processes should examine this very carefully.
2 | The usual total failures
In the B2C sector, Terms and Conditions often fail due to very classic clauses. This is not a creative boundary-pushing, but simply ineffective: blanket exclusions of liability, price change reservations without narrow limits, liquidated damages without the possibility of counter-evidence, formal clauses requiring more than text form.
Equally popular and equally vulnerable: amendment mechanisms along the lines of “Whoever continues to use the service agrees to the new Terms and Conditions.” The Federal Court of Justice (BGH) has clearly rejected such blanket fictions of consent, at least vis-à-vis consumers (Judgment of April 27, 2021 – XI ZR 26/20). Clauses that interpret the customer’s silence as consent to changes in Terms and Conditions without substantive restriction violate Section 307 BGB. In contract law, silence is not suddenly golden just because it’s in the fine print.
3 | Section 307 BGB clears out the rest
Even if a clause does not already fail due to the specific prohibitions of Sections 308 or 309 BGB, Section 307 BGB always remains. Unclear, contradictory, or unreasonably burdensome provisions are ineffective.
This is precisely where many self-drafted Terms and Conditions ultimately fall apart: they are linguistically imprecise, systematically contradictory, and somewhere between a wish list and copy-paste.
4 | What retailers should do now
Think in versions. Terms and Conditions are not a text for eternity, but a legal document requiring maintenance.
Start with the checkout process: Are the Terms and Conditions technically incorporated correctly during the ordering process – meaning clearly linked, readable, storable, and ideally with documented consent before the order is submitted? Then check your liability and warranty clauses for impermissible exclusions or restrictions to the detriment of consumers. Review your amendment and formal provisions: Do they withstand a review of Terms and Conditions, or do they demand things that the law specifically does not permit? And ask yourself honestly: When were your Terms and Conditions last adapted to current case law?
My advice as a lawyer and economist: It’s better to have them thoroughly reviewed once than to argue later over a clause that won’t hold up anyway. Bad Terms and Conditions are often more expensive than none at all. They convey control where legal and warning letter risks actually lurk.
Key takeaway: Terms and Conditions that are not effectively incorporated or are substantively invalid do not protect the retailer – they protect the customer. Because then the law applies.
Are you unsure whether your Terms and Conditions will stand up in a dispute? Let us check before your opponent does.
