Germany: Surprising clauses on remuneration for entry into online business directories are invalid

By judgment of the 26.07.2012 (Case No. VII ZR 262/11), the German Supreme Court (Bundesgerichtshof) ruled: “If a service (here basic entry into a business directory on the Internet) is offered in a big quantity of cases free of charge, a remuneration clause, which is included in the overall picture of an application form in a typical graphical unobtrusive design, is not to be expected by the contractual partner and the clause does not get part of the contract in terms of § 305 c subsec. 1 German Civil Code.”

The decision is based on the following facts: The claimant maintains a business directory in the internet. To obtain entries, he sends a form to traders, labeled as “application for registration in commercial database”. In the left column are several lines for business data. After a signature line, which is highlighted by a bold “X”, it says in enlarged form “return of the form immediately requested” and (underlined) “central fax”. The bold and enlarged fax number follows. The right part of the form consists of a framed longitudinal column titled “notes on the first entry application, service description and contractual terms, notes on remuneration and notes in accordance with § 33 BDSG (Federal Data Protection Act)”. In the subsequent text is among others the following sentence: “contractual term is two years, costs are 650.00 EUR net per year.”

The defendant’s manager filled out the form, which was sent to him unsolicited and returned it. The claimant entered the defendant into the directory and invoiced the amount of 773.50 EUR gross. The payment claim commenced by the claimant was rejected in lower courts and the claimant brought an appeal to the Supreme Court.

The Supreme Court pointed out that in accordance with § 305 c subsec. 1 German Civil Code, which according to § 310 German Civil Code also applies towards entrepreneurs, provisions in general terms and conditions, which are with respect to the circumstances and in particular with regard to their appearance in the contract, so unusual that the contractual partner does not expect those, do not become part of the contract. These requirements are met in the present case. Even the commercial contractual partner does not have to expect a remuneration clause, if he gives an entry order to the claimant by using the registration form.

The Supreme Court further stated that entries in business directories on the Internet not in all but in the bigger quantity of cases are free of charge and therefore the customer’s expectation has not been corrected with sufficient precision in the present case. The name of the form as application for registration in commercial database does not make it sufficiently clear that this is an offer for entering into a contract against payment. The attention of the commercial recipient was drawn to the left column by highlighting in bold print and the design of the form. The notification in the right longitudinal column with regard to payment on the other hand was typographically arranged in a manner that an averagely attentive commercial recipient would not have taken note of it.

The contract however remains valid despite the invalidity of the payment clause and its content is to be based on the statutory provisions. § 632 subsec.1 German Civil Code provides for a remuneration agreement as implied, if the service is only to be expected against payment. However this is not the case here, because the offer to be entered into an online-business directory can usually be expected without payment.

The action for payment has therefore been correctly rejected by the lower court as unfounded and the appeal was to be rejected too.

Remark: The use of surprising payment clauses for entry into online-business directories is unfortunately standard practice for quite a long time. Although it is in many cases worthwhile to defend oneself against claims based upon such payment clauses, there are still a number of entrepreneurs who are paying off on such invoices because of fear of a possible legal dispute. The business model of the providers of such online-business directories is based upon that fear. It is to be hoped that the decision of the Supreme Court, at least in similar cases, will make more entrepreneurs resist this approach.

The law firm was established in 2003 by Dr. Artur Bunk, an Attorney-at-Law. Qualified in 1995, he was admitted to the Frankfurt Bar in 1997 after obtaining an LL.D. in European Law at the University Viadrina in Frankfurt (Oder). During his career he has worked with the German law firm Pünder, Volhard, Weber & Axster (now Clifford Chance), was Head of Office at Rödl & Partner in Poland, and Senior Legal Counsel at the Legal and Restructuring Department of KfW. In addition to German, he also speaks fluent English and Polish.

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This release was published on openPR.