How to formulate good GTC for your company?

Anina Groh
Anina Groh

General terms and conditions (GTC) are often perceived as cumbersome and sometimes unnecessary. However, with good GTC, your company can build good business relationships, maintain a good external image and avoid unnecessary disputes. A few simple tips and tricks should be followed when drafting GTCs.

Practical relevance

One of the most common mistakes when drafting general terms and conditions is the lack of practical relevance. Frequently, GTCs are kept very superficial and general, so that a legally binding basis can hardly be derived from them and there is a great risk of disputes in the concrete case of application.
The first tip for the design of your GTCs is therefore: design your GTCs very specifically in relation to the day-to-day business of your company. Your GTC should describe your service, your product, your sales rules, etc. as concretely as possible. There is no such thing as "legally right" or "legally wrong" when it comes to various topics, but the provisions must be practically suitable for your company.

Transparency

Another common mistake is that GTCs try to impose certain legal provisions on business partners or customers without the contractual partner noticing. A company hopes to benefit from this by means of advantageous GTCs in the event of a dispute.

Our tip is: Avoid disputes about transparency. Write in your GTC what you can offer (and if necessary also what you cannot offer). In this way, the topics of liability and warranty are "automatically" already regulated to a large extent for your company in a sensible way and, in addition, there is a much smaller risk of disputes (e.g. missing payments by customers because the services are unclearly regulated).

Focus on the essentials

GTCs often try to cover all possible scenarios. In our opinion, this is exactly the wrong approach. All potential, future scenarios can usually not be anticipated anyway, nor can they be represented to a reasonable extent in GTC.

Therefore, GTC should reflect the main business, i.e. the usual business case, and define the rules for it. For exceptions we recommend to use contract supplements or individual contracts.
In certain cases, it can be very helpful to define standardized text blocks ("text modules") that you can use in addition to the GTC with certain contractual partners or in certain situations, depending on the situation. The diversity of business life can best be taken into account in this way.

Reconciliation of offer with GTC

GTC are often sent to customers together with offers. The offers then often become part of the contract, in which they are accepted by the customer. It is important that individual agreements in offers take precedence over the provisions in the GTC.

Duplication and, in particular, contradictions between offers and GTCs should be avoided at all costs in order to avoid legal ambiguities. A careful preparation of offers - especially of the legal aspects - is essential for a company. Often companies tend to make promises in the offers to convince the customers, which cannot be kept (e.g. "immediate implementation" of all customer requests). This must be avoided.

Good external appearance but not too much marketing

When designing GTC, a company basically has a lot of creative leeway. Through the design of the GTC, a company can accordingly influence its external appearance and thus the impression it makes on business partners and customers.

If your company is to appear "uncomplicated" and "relaxed", short and simply formulated general terms and conditions are probably more suitable. If you want your company to represent the values of seriousness, accuracy, attention to detail, etc., longer and more detailed terms and conditions are more suitable. 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.

It is important that GTCs and, in particular, offers do not contain overly positive descriptions of services or products ("marketing language"). This is because under certain circumstances a warranty and/or liability of the company can be derived from such descriptions. Therefore, a factual and as clear as possible description should be chosen for services and products.

Integration of the GTC and legal limits

GTC will only become part of the contract if they are accepted by the contractual partner. Mere publication, e.g. on the website, is not sufficient. A consent mechanism must be built into the conclusion of the contract with the contractual partner. In the case of online stores, this can be implemented directly via the website; for other transactions, this must be done separately (e.g. by e-mail). The exact process depends primarily on the nature of their interaction with customers and business partners.

In addition, there are some restrictions regarding the validity of GTCs especially when they are used with private end customers.

Other legal issues surrounding GTC

The use of GTC does not address all legal issues, but only the contractual relationship with your business partner or customer. The use of general terms and conditions is usually associated with other legal issues that a company may have to address. Typically, these are questions of data protection or other compliance topics.

 
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