Term and Subject Matter of Commercial Private Law
Das Commercial Private Law is an independent subfield of private law that governs private legal relationships in the field of commerce. It encompasses all private law norms that are essential for the organization, exchange, and promotion of economic activities. Commercial private law forms the legal foundation for the actions of companies and individuals in economic activities and establishes the framework under which markets and commercial relations, particularly in business transactions, operate.
Delineation and Classification within the Legal System
Commercial private law is primarily a part of civil law, as it regulates the legal relationships between legal subjects acting in a non-sovereign capacity. In contrast stands commercial administrative law, which concerns government interventions and regulations of economic activities. While there is overlap with other legal fields such as public commercial law, tax law, or labor law, the main focus of commercial private law is on private legal relationships and their structuring options.
Systematic Structure and Fundamental Regulatory Areas
Commercial private law is divided into various main areas that are closely interlinked. The most important are:
General Contract Law
General contract law, principally regulated in the Civil Code (BGB), provides the framework for the formation, validity, fulfillment, and liability in commercial contracts. This includes provisions on declarations of intent, conclusion of transactions, general terms and conditions (AGB), as well as on contract interpretation and adjustment.
Law of Obligations and Law of Property
The law of obligations as well as property law are also of central importance in commercial private law:
- Law of Obligations: Regulates the duty relationships between creditors and debtors; includes contracts such as purchase agreements, leases, service contracts, and contracts for work and services, which form the basis of exchange relationships in commerce.
- Law of Property: Determines the legal relationships concerning property (including ownership, possession, security rights), which are central to the movement of goods, credit security, and asset transfer.
Commercial Law
A significant area of commercial private law is commercial law, codified in the German Commercial Code (HGB). Commercial law contains in particular:
- Special provisions for merchants and commercial companies
- Commercial transactions and customs
- Provisions regarding the commercial register, company name, and commercial power of attorney (Prokura)
- Regulations on commercial agent contracts and commercial books
Company Law
Company law regulates the establishment, ongoing organization, and dissolution of private law business entities, including:
- Partnerships: such as civil law partnerships (GbR), general partnerships (OHG), limited partnerships (KG)
- Corporations: such as stock corporations (AG), limited liability companies (GmbH)
- Participation rights, governing bodies, representation, and liability of companies
Law of Securities and Capital Markets
The law of securities deals with the legal relationships in securities such as shares, bonds, or checks. Capital market law, on the other hand, covers the regulations for the issuance and trading of securities as well as their regulatory oversight.
Intellectual Property Protection and Intellectual Property Law
Also relevant in commercial private law are intellectual property rights, e.g., trademark, patent, copyright, design or utility model law, and competition law. These serve to protect innovation and fair market conditions.
International Commercial Private Law
Given the globalization of economic relations, rules of private international law (PIL) and international civil procedure law are increasingly important. They regulate, among other things:
- Applicable law in cross-border legal transactions
- Recognition and enforcement of foreign judgments
- International contract drafting
Basic Principles and Functional Significance
Commercial private law is characterized by several fundamental principles:
- Private autonomy: The parties are generally free to structure their legal relationships, for example by individually drafting contracts.
- Protection of Commercial Transactions: Protection of legal transactions through registers, principles of publicity, and protection of trust.
- Liability and Risk Allocation: Through detailed regulations, liability and risk in commercial transactions are allocated and made calculable.
Thus, commercial private law forms the central legal infrastructure for a functioning market economy. It ensures legal certainty, protects legitimate expectations, and provides the necessary flexibility and efficiency for economic activities through appropriate instruments (such as general terms and conditions, security rights, and company law frameworks).
Sources of Commercial Private Law
The most important legal sources of commercial private law are:
- German Civil Code (BGB)
- German Commercial Code (HGB)
- Stock Corporation Act (AktG), Limited Liability Companies Act (GmbHG)
- Partnerships Act (PartGG)
- Securities Trading Act (WpHG), Deposit Act, Bills of Exchange Act, Cheques Act
- Trademark Act (MarkenG), Patent Act (PatG), Copyright Act (UrhG)
- Act Against Unfair Competition (UWG)
- Introductory Act to the Civil Code (EGBGB)
- European regulations and directives (e.g., Rome I Regulation, Rome II Regulation)
Development and Significance in Practice and Case Law
Commercial private law is subject to constant change, driven by economic innovations, international interconnections, and legislative amendments. The courts, particularly civil courts up to the Federal Court of Justice, decisively shape the application and further development of commercial private law through their rulings.
At the same time, European and international legal acts are increasingly influencing the substantive design of commercial private law, so that community law provisions (for example, in company law and capital market law) are becoming more significant.
Summary
Commercial private law includes all private law provisions that organize, promote, and secure economic activity. It is comprised of numerous subfields, such as contract, commercial, company, securities, intellectual property, and competition law, and is characterized by principles like private autonomy and protection of commercial transactions. Commercial private law is the central legal basis for businesses and economic actors and is of outstanding importance because of its influence on all forms of economic activity.
Frequently Asked Questions
When is a contract validly concluded in commercial private law?
A contract is concluded in accordance with the principles of commercial private law through offer and acceptance (§§ 145 ff. BGB). The offer is a declaration of intent requiring receipt, which must be formulated so concretely that the recipient can agree simply by saying “yes.” Acceptance, in turn, is the explicit or implied consent to the offer. Both declarations of intent must correspond in content (so-called consensus principle). Additionally, no statutory formal requirements (such as the written form, for example in the case of real estate transactions under § 311b BGB) may be violated. Another prerequisite for validity is the legal capacity of the contracting parties (§§ 104 ff. BGB). Provisions on representation (§§ 164 ff. BGB), rules on mistake and avoidance (§§ 119 ff. BGB), as well as any prohibitions and immorality (§§ 134, 138 BGB) must also be strictly observed, as violations can lead to nullity. If all these requirements are met, the contract is legally binding and creates the intended obligations.
What is the significance of AGB control in business contractual relationships?
In commercial transactions between businesses, the control of general terms and conditions (AGB) under §§ 305 ff. BGB plays a central role. General terms and conditions (AGB) are pre-formulated clauses for a multitude of contracts that one party presents to the other upon conclusion of the contract. In the B2B sector, AGB control generally applies, whereby special trade customs and practices (§§ 346 HGB) must be taken into account. Although content control under § 307 BGB is weakened in relation to entrepreneurs and merchants compared to private law with consumers (e.g., § 310 para. 1 BGB must be observed), the use of AGB must not lead to the exclusion of essential contract content or to unreasonable disadvantage. Particular attention must be paid to the incorporation of AGB into the contract, the so-called “battle of forms” (collision of both sides’ AGB). If there is no agreement, the statutory provisions apply.
When is a managing director personally liable under commercial private law?
As a rule, managing directors of legal entities, such as a GmbH or AG, are only liable with the company’s assets, according to § 43 GmbHG and § 93 AktG, respectively. However, exceptions exist in cases of breaches of duty. Personal liability arises if the managing director breaches his or her duties of care. This includes faulty business decisions outside the business judgment rule, breaches of statutory duties (e.g., payment of taxes, social security contributions, delay in filing for insolvency under § 15a InsO), or the commission of unlawful acts (§ 823 BGB). Internal liability to the company or possible external liability to third parties in cases of tortious acts can also be relevant. In the case of insolvency liability, there is even stricter liability, which is governed by insolvency law.
What must be observed regarding liability for defects under sales law between businesses?
In contracts of sale between businesses (“B2B,” § 14 BGB, especially § 377 HGB) there is a stricter obligation to inspect and report defects. The buyer must inspect the goods immediately after delivery and notify the seller of any defects without delay (duty to give notice). Failing to do so according to § 377 paras. 2 and 3 HGB results in the loss of rights regarding defects (subsequent performance, withdrawal, reduction, damages). Unlike consumer transactions, the parties can largely limit or exclude liability for defects under the optional provisions of civil law. Further warranty rights are governed by §§ 434 ff. BGB as well as special commercial provisions and any contractual agreements.
Which legal provisions apply to retention of title in supply contracts?
Retention of title is a security right of particular importance in commercial private law in the sale of goods. According to § 449 BGB, the seller remains the owner of the delivered goods until full payment is made. The simple retention of title secures the payment claim, while the extended retention of title (including processed or resold goods) and expanded retention of title (also securing other claims) are frequently found in general terms and conditions. A prerequisite is always that the retention of title is effectively agreed upon and the buyer receives possession “only under retention of title.” In the case of combination, mixing, or processing (§§ 946 ff. BGB), the retention of title can lapse, so contractual provisions regarding this (processing clauses, advance assignment clauses) are advisable. In insolvency, the seller is protected by the retention of title, as he can assert a right of segregation under § 47 InsO.
What rights and obligations arise for merchants from entry in the commercial register?
According to § 1 HGB, the merchant is obliged to register with the commercial register. The registration entails, among other things, the so-called publicity effect (§ 15 HGB), the exclusivity of the company name, the right to grant commercial power of attorney (Prokura) (§ 48 HGB), and the acquisition of specific commercial rights and obligations. These include the duty to keep records (§§ 238 ff. HGB), the mandatory application of commercial law provisions in transactions (such as fixed-term contract clauses, duties to inspect and notify of defects), and the ability to make certain legal actions public through registration. The use of the company name (Firma) and limited liability for corporations are also tied to entry in the commercial register. Changes or loss of merchant status must also be reported for registration.
How is competition law anchored in commercial private law?
Competition law is an independent component of commercial private law and is primarily governed by the Act Against Unfair Competition (UWG), the Act Against Restraints on Competition (GWB), and European regulations (e.g., Art. 101, 102 TFEU). The focus is on the protection of fair competition and the prohibition of unfair practices such as misleading advertising, aggressive business practices, or targeted obstruction of competitors. Violations of competition law can be pursued by competitors, consumer associations, and under certain conditions via cease-and-desist and damages claims. In business transactions between entrepreneurs, the principles of competition law must be strictly observed, since violations can have significant civil law and, where applicable, regulatory consequences.
