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ARTICLE · 02 JULY 2025

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Germany's Highest Court Upholds Validity Of Arbitration Agreement Which Excludes German T&C Law

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In an important decision this year (I ZB 48/24), the German Federal Court of Justice confirmed that parties can agree to exclude the application of German law on general terms and conditions...

GermanyLitigation, Mediation & Arbitration
Jan Henning Buschfeld
Jan Henning Buschfeld
Marjorie Vieira LL.M.
Marjorie Vieira LL.M.
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In an important decision this year (I ZB 48/24), the German Federal Court of Justice confirmed that parties can agree to exclude the application of German law on general terms and conditions in their arbitration agreements without jeopardizing the validity of those agreements. This Legal Update takes a close look at this pro-arbitration decision and its implications for parties negotiating contracts with a German nexus.

BACKGROUND TO GERMAN T&C LAW

The core provisions under German law which govern general terms and conditions are sections 305 to 310 of the German Civil Code or "BGB" ("German T&C law"). German T&C law is known for its strictness, even in business-to-business contracts. While it is designed to protect parties from unfair or one-sided standard terms, its rigidity is often seen as a barrier especially in international transactions. For companies dealing with contracts that have a German nexus, there is a real risk that key clauses – such as

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This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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