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Perspectives

ReferenceStandard Terms

No individual agreement

A pre-formulated clause stating that the parties have supposedly negotiated each term individually is counterproductive.

Peter Poleacov (updated )5 min

Two one-way signs on a single post pointing in opposite directions, in front of office towers

Many B2B contracts contain pre-formulated clauses meant to establish an individually negotiated agreement. Whether a clause is subject to standard-terms review at all is the first of four stages. The entry article “Standard terms in B2B: freedom of contract is the exception” gives the overview.

Two examples from practice

The user of such clauses wants to establish an individually negotiated agreement. That way, the user’s terms are meant to escape the strict content review that German law applies to standard terms.

Under Section 305(1) sentence 3 of the German Civil Code (Bürgerliches Gesetzbuch, BGB), terms are not standard terms to the extent the parties have individually negotiated them. Under the settled case law of the Federal Court of Justice (Bundesgerichtshof, BGH), “individually negotiated” means that the user seriously puts up for discussion the core content of the clause that departs from the statutory default rules. The user must give the other party the freedom to shape the clause so that the other party can protect its own interests. The other party must have a real opportunity to influence the substance of the clause.1 That is rarely actually the case.

The user must plead and prove that a clause was in fact individually negotiated. The standard for this proof is high. The proof has to succeed for each clause separately. If the parties amend individual terms, it does not follow that an unrelated clause was also seriously put up for discussion.1

Offering a choice is not enough either. Letting the other party choose between two pre-formulated variants is not yet individual negotiation. The other party must be able to put forward its own drafting proposals and have a real chance of getting them accepted.2

In the BGH’s view, if the user presents a confirmation that all terms were individually negotiated, that confirmation does not by itself prove that they were. The other party’s signature does not change that. The burden of proof stays with the user.3

A standard-form confirmation of this kind is also invalid under Section 309 No. 12(b) BGB.4 Between businesses, that provision does not apply directly (Section 310(1) sentence 1 BGB). According to the BGH, however, a breach of Section 309 BGB indicates that the clause unreasonably disadvantages businesses too and is invalid under Section 307 BGB.5 I see no reason for a B2B exception for such confirmations. That is because few business people know what “individual negotiation” means in law.

Finally, even an individually negotiated clause that excludes the rules on standard terms does not help. The other terms remain standard terms as long as they were not themselves individually negotiated (Section 305(1) sentence 3 BGB). Such an exclusion is incompatible with the protective purpose of Sections 305 et seq. BGB.6

Conclusion

Invalid contract clauses keep coming back. Sometimes only the wording changes. Clauses stating that the terms were individually negotiated do not establish an individually negotiated agreement.

An individually negotiated agreement remains possible. Anyone who wants one, however, needs a better strategy. The parties should negotiate for real and document the negotiation, instead of asserting it. What the Federal Court of Justice requires for that, and which three questions actually lead there, is shown in the article “Standard terms or individually negotiated?”. A recent decision on a framework supply agreement shows that the effort pays. Where the terms were genuinely negotiated individually, they take priority over standard terms under Section 305b BGB. That also applies vis-à-vis affiliated companies to which the parties grant rights in the framework agreement. The condition is that those companies’ interests were safeguarded in the negotiations, so that those companies are not the weaker negotiating side.7 For framework supply agreements within a group, this priority is the point that matters most in practice. What counts is the negotiation actually conducted, not the confirmation clause.

Genuine negotiation needs a text that fits your own business. Where that text comes from is covered in the article “Standard terms: template, generator, or lawyer?”.

Notes

  1. BGH, order of 19 March 2019 – XI ZR 9/18. ↩1 2

  2. BGH, judgment of 13 March 2018 – XI ZR 291/16, decided on two loan variants offered to a consumer; the standard for individual negotiation under Section 305(1) sentence 3 BGB is the same between businesses. ↩

  3. BGH, judgment of 15 December 1976 – IV ZR 197/75, reasons, part I 2 c; for business-to-business dealings BGH, judgment of 20 March 2014 – VII ZR 248/13, headnote b: to plead that terms were individually negotiated under Section 305(1) sentence 3 BGB, the user cannot rely solely on an individually agreed statement that the clauses were seriously and extensively negotiated; for pleading purposes such a confirmation is irrelevant (para. 27). ↩

  4. BGH, judgment of 28 January 1987 – IVa ZR 173/85, on the former Section 11 No. 15 of the German Standard Terms Act (AGB-Gesetz, AGBG), as reported by Ulmer/Brandner/Hensen/Habersack, AGB-Recht, 13th ed. 2022, Section 309 No. 12, marginal no. 19. ↩

  5. BGH, default judgment of 19 September 2007 – VIII ZR 141/06, headnote a. ↩

  6. BGH, judgment of 20 March 2014 – VII ZR 248/13. ↩

  7. BGH, order of 20 November 2025 – I ZB 9/25. ↩

Reference: Poleacov, P. (2026). No individual agreement. INN.LAW. https://inn.law/en/perspectives/no-individual-agreement/