Function of business terms and conditions in Germany

The main function of the general terms and conditions (Allgemeine Geschäftsbedingungen - AGB) commonly used in Germany is to simplify the handling of standard contracts. A company's terms and conditions take account of the special characteristics of the business involved and clarify any uncertainties that might arise when applying the law. They serve as a framework for a business relationship by setting out the parties' mutual rights and obligations. Along with the applicable legal rules and any conditions that have been individually negotiated, they form the basis of the agreement concluded between companies and their customers. Since general terms and conditions are normally drawn up by the companies alone, their contents are subject to judicial scrutiny.