Who can conclude a valid contract

When is a contract legally valid?

When and how a contract is concluded is regulated in the German Civil Code (§§ 145 ff.). The first required declaration of intent is the offer (also called application), which must be binding. This is then followed by the second or, if applicable, further declarations of intent as acceptance (or declaration of consent or contract acceptance).

From contract law

There are many different types of contracts: purchase, employment or lease, to name the most popular ones. In principle, the content of the contract and the subject matter of the contract must be so clearly defined that the intention of the contracting parties can be clearly recognized by an outsider. In addition, the contracting parties must have received every declaration of intent from the other.

In addition, contracts are only legally valid if the contracting parties are legally competent, i.e. can make or receive legally effective declarations of intent. The legal capacity usually begins at the age of majority.

Some contracts must be in writing. Banking and insurance transactions must be made in writing. To protect the contractual partners, this also applies to property purchases or inheritance and marriage contracts. These must also be certified by a notary.

When is an oral contract sufficient?

Verbal contracts are more common than you might think. For example, everyone who gets their rolls from the bakery in the morning enters into an oral sales contract with them. Getting into a taxi and switching on the taximeter is also an oral contract.

Rental agreements

In addition, for example, agreements between relatives or friends regarding subletting (WGs) can be considered verbal (rental) contracts.

In the case of rental contracts, it should be noted that the same conditions apply to written and oral agreements. Before signing the contract, you should agree on the deposit, notice periods, ancillary costs and all other points in question. Otherwise, there is a risk of being left with all unexplained costs afterwards. Because in the event of a dispute, word stands against word. Here, too, there are restrictions: If the tenancy is to last longer than a year, the tenancy agreement must be concluded in writing.

Further requirements

Even if the contracting parties agree, contracts can be ineffective. Clear reasons when contracts are ineffective are:

  • the legal incapacity (§ 105 BGB), or the limited legal capacity (§§ 106 ff.),
  • a possible form deficiency (§ 125 BGB),
  • a violation of a legal prohibition (§134 BGB),
  • Immorality (§ 138 BGB) (e.g. usurious business, i.e. selling a piece of bread for € 100, or the like)

In such a situation, no effective legal transaction has taken place from the outset. If services have already been provided, these must be returned. A contract can also be challenged.

Can you get out of a legally valid contract?

Legally valid contracts are legally binding. However, the legislature grants the consumer the right of withdrawal or return.

For example, when buying online via a distance contract, the customer has the option of revoking his declaration of intent or sending back the purchased item within a statutory period (14 days is the rule) without giving a reason.

A written contract guarantees both contracting parties legal certainty. Because if there is a dispute, there is often word against word. This can be remedied by (objective and neutral) witnesses who accompany an oral contract.