Definition and Basics of Administrative Contracts
An administrative contract is a contract anchored in public law, concluded between an administrative authority and one or more natural or legal persons to achieve a specific administrative goal. In contrast to the unilateral administrative act, the administrative contract represents a bilateral, often even multilateral, declaration of intent. The administrative contract is particularly used when complex, cooperative, or individually structured legal relationships cannot be adequately regulated by an administrative act.
Legal Foundations of the Administrative Contract
Statutory Foundations
The central provisions for the administrative contract in German law are found in §§ 54 et seq. of the Administrative Procedure Act (VwVfG). These regulations stipulate the permissibility, conclusion, validity, and limits of administrative contracts. State-level regulations largely mirror the VwVfG. Furthermore, contract law from the German Civil Code (BGB) applies, unless mandatory and more specific public-law provisions take precedence.
Distinction from Other Legal Instruments
The administrative contract contrasts with the administrative act, which is a sovereign, unilateral regulation of an individual case by an authority. Administrative contracts require mutual agreement and thus embody the principle of consensuality. Compared to civil law contracts, the administrative contract is characterized by its direct binding to public law provisions, purposes, and limitations.
Types and Forms of Administrative Contracts
Coordination Agreement and Subordination Agreement
The law distinguishes between two types of administrative contracts:
- Coordination Agreement (Section 54 sentence 2 VwVfG): The parties are equal in status. Examples include inter-municipal agreements or public law joint ventures.
- Subordination Agreement (Section 54 sentence 2 VwVfG): There is a superior/subordinate relationship, based on the roles of the parties in the administrative procedure. Here, one party (typically an authority) often grants the other rights or obligates it to specific conduct.
Other Types
In addition to the statutory types, there are numerous forms, such as settlements (Section 55 VwVfG), exchange contracts, public law development agreements, or public law contracts for granting subsidies.
Formation and Validity
Contract Formation
The formation of an administrative contract follows – unless there are specific legal provisions – the general conditions of Section 62 VwVfG and, subsidiarily, Sections 145 et seq. BGB. The contract is concluded through matching declarations of intent and generally requires written form (Section 57 VwVfG), except in cases where the written form is exceptionally dispensable.
Form and Validity Requirements
For an administrative contract to be valid, written form is required. This applies to both main and ancillary provisions. Representation by third parties and internal authority responsibilities are determined by the respective applicable regulations. Further requirements for validity are that the acting authority is materially and locally competent and acts with legal capacity.
Limits of Permissibility
Administrative contracts must not violate statutory prohibitions, good morals, or the public interest. The contractual provisions are in particular subject to the limits of administrative law, such as the principle of legality and the prohibition of excess (Section 56 VwVfG).
Contents and Structuring
Contract Content
The content of the administrative contract can generally be freely structured unless mandatory public law regulations (particularly from construction, environmental, municipal, or social law) provide for a conclusive sovereign regulation. Permissible are provisions relating to main and ancillary obligations, exchange of services, conduct, conditions, time limits, and resolutive as well as suspensive conditions.
Typical Contract Clauses
Frequently included provisions are terms regarding modalities of performance, deadlines, obligations to provide evidence, sanctions in case of breaches, withdrawal clauses, and special regulations regarding liability, jurisdiction, and legal consequences of void contract parts (severability clauses).
Termination and Cancellation
Ordinary and Extraordinary Termination
An administrative contract is regularly terminated by performance or expiry of the agreed term. There are also rights of withdrawal, revocation, and termination arising from the contract itself, from statute, or from the VwVfG. Section 59 VwVfG regulates the prerequisites and effects of withdrawal as well as special rights of revocation.
Challenge and Nullity
An administrative contract can, under certain conditions pursuant to Section 58 VwVfG or in accordance with provisions of the BGB, be challenged. Grounds for nullity exist in particular in cases of violation of a legal prohibition or immorality. For the legal consequences of nullity, Section 59 VwVfG contains an independent public law regulation.
Legal Protection, Oversight and Judicial Review
Legal Recourse
Disputes arising from administrative contracts generally fall under the jurisdiction of the administrative courts (Section 40 VwGO), provided the contract is of a public law nature. In mixed cases, such as those with mixed public and private law contents, a separate examination based on the two-stage theory is carried out.
Oversight of Contractual Rights Exercise
Judicial oversight extends to the validity, interpretation, implementation, and termination of administrative contracts. The general principles of administrative procedural law apply, supplemented by special rules on provisional legal protection and actions for specific performance.
Significance, Function, and Development
Function in Administrative Action
Administrative contracts are of central importance especially in complex administrative procedures, such as the implementation of infrastructure projects, urban development, or public-private partnerships (PPP). They enable flexible, interest-oriented, and cooperative solutions where rigid sovereign regulations reach their limits.
Development and Trends
Since the introduction of more open forms of administrative action in the wake of administrative modernization, the administrative contract has gained in importance. Especially in fields such as environmental law, building law, social law, public services, and international administrative actions, administrative contracts are becoming increasingly significant.
Summary
The administrative contract is a public law legal instrument for the flexible and cooperative regulation of administrative relationships. Its statutory structure provides maximum legal certainty, scope for arrangement, and opportunities for legal protection. The complexity of the contract and the breadth of its application make the administrative contract a key component of modern administrative practice.
Frequently Asked Questions
What formal requirements apply to an administrative contract under German administrative law?
An administrative contract pursuant to Section 54 of the Administrative Procedure Act (VwVfG) is generally not subject to any special form unless otherwise provided by legal regulation. However, Section 57 VwVfG stipulates that administrative contracts must be concluded in writing if they are to replace an administrative act or if this appears necessary for clarification of the agreed arrangements. In fields governed by special rules, such as planning law or social law, more explicit or stricter formal requirements may arise from special statutes or regulations. Violation of legally required formal provisions may lead to the nullity of the contract (Section 59 (1) VwVfG). Furthermore, it should be noted that certain contents, such as data protection aspects or security-relevant arrangements, may impose additional substantive requirements on contract design, for example regarding obligations to provide information or documentation. Compliance with formal requirements is therefore an integral part of an effective and legally secure administrative contract.
What options exist for challenging or rescinding an administrative contract?
The challenge or rescission of an administrative contract is essentially governed by Sections 58 et seq. VwVfG. Under Section 59 (1) VwVfG, a party may invoke the nullity of the administrative contract if the contract violates a legal prohibition, the required form was not observed, or another serious legal defect exists (e.g., immorality). In addition, the contract may be challenged due to mistake, fraudulent misrepresentation, or duress, in which case the Administrative Procedure Act applies in conjunction with the civil law provisions of Sections 119 et seq., 123 BGB. The rescission of a void or validly challenged contract is governed by public law principles; under Section 59 (2) VwVfG, either party may claim compensation for services already rendered. Furthermore, the rescission of an administrative act issued by or as a result of the contract may be considered, subject to the provisions of Sections 48, 49 VwVfG.
What binding effect does an administrative contract have on the parties involved?
A validly concluded administrative contract generally creates mutual binding effect – the obligations and rights agreed upon by the parties are legally enforceable. Unlike a unilateral administrative act, which is based on a sovereign decision, the administrative contract is based on the principle of equality between the parties. This means that both sides – administration and contracting partner – are bound by the contract content, unless grounds for nullity or challenge exist. There is an obligation to perform under the contract and, if applicable, to pay damages in case of breach. The administration cannot unilaterally amend or terminate its contractual obligations through administrative action; instead, a change generally requires the consent of the other contracting party or a statutory right of withdrawal, for example in cases where performance subsequently becomes impossible (Section 60 VwVfG).
What special features arise when terminating an administrative contract?
The termination of an administrative contract follows specific rules that reflect the public nature of the contract. In addition to civil law forms of ending – performance, withdrawal, or termination – special public law provisions apply. For example, under Section 60 VwVfG, either party may withdraw from the contract for good cause, in particular if fundamental contract prerequisites lapse after conclusion, such as the loss of a statutory basis for authority. Moreover, the contract can, under certain circumstances, also be terminated through a termination agreement (public law settlement). In specific cases, special statutes enable further forms of termination, such as Section 642 BGB on the cessation of the contractual basis, provided no more specific provisions apply. In contrast to unilateral administrative acts, termination or modification of an administrative contract generally requires mutual agreement, unless otherwise provided by law.
What controls and legal protection are available in disputes arising from an administrative contract?
Disputes between the contracting parties arising from administrative contracts are generally subject to review by the administrative courts in accordance with the Administrative Court Procedure Code (VwGO). In cases of disagreement regarding the validity or interpretation of the contract, fulfillment, or damages, it is possible to bring an action before the competent administrative court. The court examines whether the contract was lawfully concluded and executed, and whether obligations and rights under the contract were duly observed. In exceptional cases, for example with mixed public-private law contracts, recourse to the civil courts may also be possible, but this requires careful examination in each individual case. Additionally, there is the possibility for the competent supervisory authority to review, object to, or declare unlawful agreements void.
What role does mutual agreement of the parties play in administrative contract law?
Mutual agreement of the contracting parties is the central element of the administrative contract. Unlike the administrative act, which is based on the (unilateral) sovereign decision of the administration, the administrative contract is a consensual agreement under public law, in which the administration meets the contracting partner as an equal and in free mutual agreement. However, the principle of contractual freedom is limited by the principle of legality and the administration’s binding to law and statute. The administration may only enter into contracts within its statutory authority and is bound by mandatory norms. Nevertheless, all essential terms of the contract – especially those affecting the rights and obligations of the parties – must be expressly agreed upon by both sides. The requirement for mutual agreement also extends to amendments or terminations of the contract, unless a unilateral right of termination is provided by law.
