Closing Contracts

You want to engage in business and want to have the right to demand something. You need to close a contract in Germany. This page will introduce you to the basics of closing contracts. It is very different from common law countries!

I have heard that oral promises to do this or that are really binding. Is this true?

Yes. In Germany, contracts usually only require two concurring opinions – a consensus. Following German law no “consideration” or certain financial limits for the oral form is required. The other side of the coin is that you might not be able to prove to a court that you have concluded a contract. The main exceptions are contracts considering transfer of land property, liens or encumbrances on real estate (§311b BGB), company agreements or articles of corporations (§2 GmbHG, §23 AktG), marriage contracts (§1410 BGB), and wills (which according to §2231 BGB are ruled by German law). To comply with German law, your last will must be in handwriting, or a public notary must attest your signature on your typed will.

What is meant by “action implying to a certain legal transaction (schlüssiges Verhalten)”?

When agreeing to do something you can either say that you will do it or just do it. If you just did it, then the law understands that you wanted to perform this legal action. A typical example: After shopping you put your items on the conveyer belt and the cashier sums up all the single prices to a total. The only things said were just polite greetings. Legally seen, you told the shop owner that you wanted to buy the items on the conveyer belt. [Following German law this is not yet binding, but instead an invitation of the shop owner to make you an offer – invitatio ad offerendum]. The cashier agreed that she would be selling you these items for the sum of € x. [She made you the offer to buy these items for € x.] You paid her. [Now you accepted her offer and the contract is closed with the shop owner.] Why the contract is closed with the shop owner? Because he is the contracting party and the cashier is only his representative.

Coincidences abound! My partner to be happens to have the same citizenship as I do. May we sign the contract to rent an apartment subject to our national law?

By law, it is basically no problem, but watch out for details. You may not contravene mandatory provisions. Such provisions are e.g. grounds for termination, rent increases, and the security deposit. In addition, any stipulations you add that are not know in German law will be hard to enforce in a German court. German courts can have international jurisdiction, and the judge is bound to apply foreign law if necessary. However, most German judges are not competent in this respect, which means that you will have to bring in experts, your costs will explode, and the case will drag on forever. Think twice if you really want to use foreign laws. Will you really be willing to handle the hassle?

Having only a negligible knowledge of German, I signed a contract in German. I understood, that the service provider instructed me on all important details of the contract by encircling the chosen services to be rendered. Wanting to terminate it, the other side’s attorney instructed me that the contract provides a half-year notice period. The service agent never told me such. I believe they want to cheat me!! Can that be?

My dear reader, you are pretty naive! Every law in the world considers it your personal risk to understand the contract you sign. If you do have sufficient command of German then ask to have a copy to take back home and have somebody help you understand. If the company is reluctant to do so, they may be viewed as dubious. After signing a written contract, it is binding.

My gal put a fine electric shaver in my Christmas stocking. The thing is that I prefer a different model. The apparatus I got is not broken however, I just don’t like it. Can I demand that the vendor will exchange it?

No. You cannot demand it exchanged, but you could ask to trade it in for a different model and you usually should have the possibility to do this. There is no legal right to demand a contract be changed once it has been correctly fulfilled from both sides! Your gal bought an item and the vendor gave her exactly what she wanted. So, legally you have absolutely no chance. However, it is usually considered as bad marketing for a company to refuse the understandable and easily fulfillable request of a customer. Therefore, almost all businesses allow exchanging goods after they have been bought. Do pay attention to a few rules to successfully exchange items:


  1. The item must not have been used. This does not mean that it is forbidden to open the box and look at it. You may try on a piece of clothing but not wear or wash it.
  2. Exchanging for something with the same price is the easiest. If the price is higher, you will have to pay the difference and that will take care of that. If the price is lower than the other price, you will surely receive the difference.
  3. Do not expect your money back if you just want to return it and not exchange it for something. Expect to receive a voucher (Gutschein). §


I just got a sharp and snappy call from a provider accusing me of being the biggest stooge on earth. All I asked for was an acknowledgement that he received the payment I transferred from my account to his account. Um, what went wrong? I feel absolutely misunderstood. At home this is normal practice.

I understand you both well! In Germany, your wish is everything else but “standard”. Unfortunately, you really did hint to the German provider that you were a “stooge”. Nobody expects and wants you to follow your payment and/or bank transferal. You are only expected to pay by transferal and afterwards check your account if the money has really left your account. Everything else is considered as annoying and doing so really shows that you have no knowledge of how Germany works. In the case your payment does not reach the provider, you will receive a reminder. When a reminder comes in after you have really paid, double check that the bank details were correct and supposing they were correct, then forward the provider a copy of the bank statement showing when you paid. The rest will be the provider’s problem because you fulfilled your obligation!

Tagged under: Companies, Business Law,
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