Existence of “GTC” (general terms and conditions) despite handwritten additions

General terms and conditions (Allgemeine Geschäftsbedingungen, "GTC") are subject to a strict content control by the courts according to German law. Clauses that unreasonably disadvantage the other party of the contract are invalid. Clauses that have been individually negotiated with the other party are not subject to such control. However, a clause cannot be considered "negotiated" simply because something is added to a standard text in handwriting.

Not only documents expressly designated as general terms and conditions of business/purchase or sale are to be regarded as ”GTC”, but also other contracts if they are based on frequently used models. However, contracts or individual clauses are not subject to a GTC content control if they have been negotiated individually between the parties. Such individual negotiations require that the party having drafted the (standard) clause gives the other party the opportunity to change clauses completely and thus a real possibility of influencing the contract’s content.

Handwritten amendments in a standard text are not automatically considered "negotiated". According to relevant case law, the clauses are not considered to be ”GTC” if the respective added terms are an essential part of the contract and the contract makes no sense without them. However, if a contract can make sense even without the handwritten clause and individual negotiation cannot be proven, the validity of the clauses is judged according to the legal provisions on the control of general terms and conditions.

In order to avoid the risk of the invalidity of clauses in such cases, the party having drafted the contract must therefore be able to prove that particularly sensitive clauses such as liability limitations were discussed openly and subsequently agreed upon unanimously. It is advisable to document the mutual drafting process of the respective clause (e.g. by means of comments or traceable changes). In this way, even a handwritten addition in a standard text can be regarded as negotiated - provided it can be proven with certainty that it was not included in the contract in the handwritten form from the outset.

Clauses that are pre-formulated in violation of the rules on the permissible content of general terms and conditions bear a considerable risk. If the negotiation with the other party cannot be proven, the relevant clause may be deemed invalid by a competent court - with massive consequences. For example, a limitation of liability clause that was acceptable to both parties at the time the contract was drafted and therefore never discussed may later on  – e.g. in the event of a dispute – be invalid, as the party having drafted the clause will be unable to prove that negotiations regarding this specific clause actually took place. The drastic consequence would then be the unlimited liability of that party. This risk must always be taken into account when drafting any contract.