Flo's Notes

Types of Contracts

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References without law book default to BGB.

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For certain types of contracts, additional rules apply that deviate from the general rules of contract law. These contracts are often used in business transactions and have specific regulations to protect the parties involved.

The specific rules override or extend the general ones, which is why the analysis should start with the specific contract type and then refer to the general rules if necessary.

Below is a non-exhaustive list of specific contract types.

Sale of Goods

A sale of goods contract is any contract where the seller agrees to transfer ownership of a good to the buyer in exchange for payment. This does not apply to goods, but also to rights and the sale of other objects (§ 453 I BGB). The specific rules for sale of goods contracts are found in §§ 433–479 BGB.

Passing of Risk / Transfer of Posession

In a sale of goods contract, the risk of accidental loss or damage to the good passes from the seller to the buyer at the time of delivery. This means that if the good is damaged or lost after delivery, the buyer bears the risk, even if they have not yet paid for it (§ 446 (1) BGB).

Material Defect

Rental and Lease Agreements

A rental/lease agreement is a contract where one party (the lessor) agrees to provide the other party (the lessee) with the use of a good for a specified period in exchange for payment. The specific rules for rental and lease agreements are found in §§ 535–580a BGB, with special regulations for rental and business leases.

Rentals and Loans

In a rental agreement, the lessee has to return the same good after the rental period, while in a loan agreement, the borrower can return a different good of the same type and quality. Loan agreements are governed by §§ 598–606 BGB.

Loan Agreements

A loan agreement involves the temporary transfer of money or fungible goods. After the expiration of the agreed period, the borrower is obligated to return items of the same kind, quality, and quantity (rather than the exact identical item). The specific rules are found in §§ 488–606 BGB.

  • Types: Financial loans (Gelddarlehen, § 488 BGB) and Sachdarlehen (§ 607 BGB).
  • Consideration: Usually interest-bearing, but can be interest-free.

Service Contracts

A service contract (Dienstvertrag) is an agreement where one party promises to perform a service/activity, and the other party promises to pay remuneration. The crucial aspect is that only the effort or activity is owed, not a specific successful outcome. The specific rules are found in §§ 611–630 BGB.

  • Core obligation: Careful execution of duties according to best efforts (e.g., employment contracts, medical treatment by a doctor).

Contracts for Work

A contract for work (Werkvertrag) is an agreement where one party (the contractor) promises to manufacture or alter an object, or achieve a specific result (the work), and the other party (the customer) promises to pay the agreed remuneration. Unlike a service contract, a successful outcome is guaranteed. The specific rules are found in §§ 631–651 BGB.

  • Core obligation: Delivery of a specific, defect-free result (e.g., building a wall, software development contract for a specific system). Failure to achieve the exact result constitutes an immediate breach of duty.

Contracts on Digital Products

A relatively new addition to the BGB stemming from EU directives, these cover contracts regulating the provision of digital content or digital services (e.g., downloads, streaming services, SaaS). The specific rules are found in §§ 327–327u BGB.

Travel Agreements

A package travel contract (Pauschalreisevertrag) regulates agreements where an organizer provides a bundle of different travel services (e.g., flight, accommodation, and transport) as a single package. The specific rules are found in §§ 651a–651y BGB.

Custody

A custody contract (Verwahrungsvertrag) is an agreement where the depositary undertakes to store a movable item safely for the depositor. The specific rules are found in §§ 688–700 BGB.

  • Modern application: This includes digital assets, such as crypto-custody services managing private keys for cryptocurrencies.

Partnership

A partnership agreement (Gesellschaftsvertrag) is not an exchange contract (performance for payment) but a collaborative agreement where two or more parties commit to promoting a common purpose. The specific rules for the basic civil law partnership (GbR) are found in §§ 705–740c BGB.

Donation / Gift Contracts

A donation contract (Schenkungsvertrag) involves the transfer of property from one person to another without any consideration or counter-performance. The specific rules are found in §§ 516–534 BGB.

  • Legal nature: It remains a bilateral contract because the recipient must accept the gift; ownership cannot be forced upon someone unilaterally.

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