David Hole

Contracts

Contracts drafted under German law require a different style. This is principally because many provisions that are traditionally set out in UK style contracts are already determined by the provisions of the German Civil Code. Parties to a German contract frequently set down only those parts of their agreement that are not regulated by, or where permissible depart from, the provisions of the Civil Code. This can result in what to common lawyers’ eyes appear suspiciously short contracts.

German rules of interpretation are almost the opposite of the UK rules. When interpreting a party’s declared intention in a contract, it is the statutory duty of the court to endeavour to ascertain precisely what it was that party was trying to express when the contract was made.

There is a tighter classification of the nature of contracts in German law. Identifying the nature and character of a contract: e. g.

• for services – Dienstvertrag,
   
• for work and materials – Werkvertrag,
   
• rental – Mietvertrag or
   
• sale – Kaufvertrag

determines what part of the Civil Code will apply to it.

The law on obligations has recently been overhauled – Schuldrechtsreform – incorporating certain satellite legislation e.g. that governing standard terms and conditions of business – similar to unfair terms – has been incorporated into the main body of the Civil Code and the attempt undertaken to standardise the fragmented concept of limitation.