General terms and conditions or individual contracts? Or both?

Anina Groh
Anina Groh

Does your company need general terms and conditions and if so, for which business relationships? Or are individual contracts better, or even both? The following article explores these questions.

General terms and conditions (GTC) are standardized contractual provisions of a company. With GTC, certain business relationships can always be conducted on the same contractual basis, in which the same legal provisions are presented to the same group of business partners (e.g. customers).

GTC or individual contract?

The use of GTC has the advantage of greater uniformity and thus legal certainty for the company using the GTC. Since the GTC are defined by the company itself and are often not adapted, the company can also benefit from the fact that the provisions are aligned to its advantage.
In principle, the same contents can be contractually agreed with individual contracts as with GTCs. However, GTC are typically not negotiated, but can only be accepted or not ("take it or leave it"). This is not mandatory, but by calling them "GTC" a company expresses that it does not want to negotiate the terms and many contractual partners do not try to do so.

The more standardized and frequent your company enters into the same business relationships, the more worthwhile it is to define and use GTCs for them. In addition, GTCs are useful for expressing to business partners that these provisions should not be negotiable.

The more individual contractual relationships are structured and the more scope for shaping business relationships is to be used, the more likely it is that individual contracts will be used. It may also be worthwhile to define internal templates for individual contracts, which can then be adapted depending on the situation.

Or both?

With certain business partners, it may also make sense to use GTCs for standardized transactions and to conclude individual contracts for other aspects. In the case of several parallel contractual relationships, the precise description of the respective area of application of the GTC or the contracts is particularly important.

Formulation of the GTC

In the formulation of GTC, a company basically has a lot of freedom. Through the formulation of the GTC, a company can influence its external appearance and thus the impression it makes on business partners and customers.

If you want your company to appear "uncomplicated" and "relaxed", short, concise GTC are a good choice. If your company is to focus primarily on seriousness, accuracy and comprehensiveness, longer and more detailed GTC may be appropriate. If you want to be perceived as a "tough contractual partner", strict liability exclusions and warranty exclusions are suitable. If you want to appear particularly customer-friendly, you can, for example, provide your customers with rights of withdrawal or price reductions.

The exact content, however, naturally depends on the specific business of the company. It is important that GTCs are not too superficial and general, but that they really reflect your specific business. Especially in the case of GTCs used with private end customers, it is also important that the GTCs are formulated in a comprehensible manner. With business partners, to avoid unnecessary disputes, it is very important that the GTC are as transparent as possible.

You will soon learn concrete tips and tricks for formulation of GTC for your company in another blog post.

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