When the basis falls away

Störung der Geschäftsgrundlage. Section 313 BGB allows a contract to be adjusted where the circumstances that formed its basis have changed so severely that holding a party to it would be unreasonable. The remedy is adjustment rather than release. The law’s instinct is to restore the balance rather than to end the relationship.

Review of standard terms

AGB-Kontrolle. German courts review standard terms and conditions for fairness and strike out clauses that unreasonably disadvantage the other side — and they do it between businesses, not only against consumers. A German company cannot rely on having got a hard clause into its own paperwork. A court will read it and may simply remove it.

Usury as a crime

Wucher. Usury is a criminal offence in Germany, not only a civil one. Taking grossly disproportionate advantage of someone’s weakness is prosecuted. The state treats an imbalanced bargain as a matter for the criminal courts.

Contrary to good morals

Sittenwidrigkeit. Section 138 BGB voids a legal transaction that offends good morals, and specifically one where a party exploits another’s predicament, inexperience or weakness to obtain a conspicuously disproportionate advantage. A German contract can be void because the bargain was too one-sided. Not misrepresented, not coerced — just too unequal.

Good faith

Treu und Glauben. Section 242 of the German Civil Code requires performance according to good faith, with regard to common usage. One sentence, and it is among the most heavily used provisions in German law.

Courts apply it to strike down conduct that is formally within a contract but unacceptable in substance. The agreement being signed does not settle whether it is enforceable.

Named after getting along

The German word for a contract comes from vertragen — to bear, to tolerate, to get along with one another. Sich vertragen is what quarrelling children are told to do. The contract is named after the state of getting along, not after the bargain that produced it.

Negotiating the matter

Sachverhandlung. Sache again, attached to negotiation. A negotiation about the matter. That the compound exists at all implies the alternative — a negotiation about something else — and marks it as a different and lesser thing.

Dealing in the dark

Mauscheln. To do a deal in the dark. Along with Kungelei and Klüngel, German words for an arrangement reached between the right people out of sight. They are used in political journalism constantly, always as an accusation, and they all name the same offence: the outcome was arranged rather than reasoned.

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