Term and Meaning of ‘Conduct’ in Law
The term ‘Conduct’ is derived from English and literally means ‘behavior’ or ‘conduct’. In a legal context, ‘Conduct’ refers to the entirety of actions and omissions by a natural or legal person that fall within the legal framework of a particular legal system. The legal assessment of ‘Conduct’ is central to various areas of law, including civil law, criminal law, labor law, compliance, competition law, as well as international law. This article explains the different dimensions and comprehensively outlines the legal standards and consequences of Conduct.
Legal Relevance of the Term Conduct
General Remarks on the Concept of Action
Conduct includes all activities a person undertakes or refrains from in exercising their rights and obligations. The essential distinction here is between active actions (e.g., concluding a contract, committing an act) and omissions (e.g., failing to provide assistance, not reporting a crime).
Assignment of Responsibility
In law, the analysis of ‘Conduct’ serves as a fundamental prerequisite for responsibility or liability. In many cases, personal conduct is decisive for determining fault, negligence, deception, or intent.
Significance of Conduct in Civil Law
Contract Law
In contract law, the term ‘Conduct’ is often used in the interpretation of declarations of intent—for example, regarding the principle of good faith (§ 242 BGB) or certain behavioral obligations and secondary duties. Certain elements of ‘Conduct’ can constitute an implied declaration of intent, thus implying the conclusion of a contract through mere behavior.
Law of Torts
Wrongful conduct is a core element of liability in tort law (§§ 823 et seq. BGB). Here, it is crucial to determine which ‘Conduct’ specifically led to the damage and whether the behavior was culpable or negligent.
Law of Obligations
In the law of obligations, actual Conduct affects the performance, non-performance, or poor performance of duties and thus forms the basis for primary and secondary claims.
Significance of Conduct in Criminal Law
Factual Conduct
The conduct of a person (‘Conduct’) constitutes the objective and subjective elements of many criminal offenses. Whether the action satisfies the statutory definition, is unlawful, and is culpable determines whether a criminal sanction is imposed.
Mistake and Intent
In criminal law, the subjective elements of Conduct are significant. Distinguishing between intent, conscious negligence, and mistake is decisive for the assessment of behavior and the legal consequences.
Offenses by Omission
Failure to perform a required action can also be relevant under criminal law. Here, a distinction is made between ‘true’ and ‘improper’ omission offenses, each with different requirements for the necessary Conduct.
Significance of Conduct in Public Law
Official Liability
In public law, Conduct plays a central role in official liability, where civil servants or other public officials through their behavior unlawfully cause damage to citizens (§ 839 BGB; Art. 34 GG).
Administrative Law
Compliance with administrative behavioral rules in the sense of proper Conduct is a prerequisite for the effectiveness and legality of official acts, especially regarding formal and substantive rule of law.
Significance of Conduct in Labor and Corporate Law
Labor Law
The behavior (‘Conduct’) of an employee is the basis for measures under labor law such as warnings, dismissals, or transfers. In particular, contractual duties of loyalty, employer’s right of direction, and the emergence of consequential labor law claims are based on the actual Conduct.
Corporate Law
In corporate law, the Conduct of bodies (e.g., managing directors, board members) is decisive for corporate liability toward third parties. Proper management, duties of care, and lawful behavior are paramount here.
Significance in International, European and Anglo-American Legal Systems
International Civil and Criminal Law
In the international context, ‘Conduct’ is used to determine the applicable legal system, especially in cross-border matters involving different countries and legal systems.
European Law
Under EU law, certain Conduct regulations are binding, for example in competition law, data protection, as well as consumer and corporate law (enforced and monitored by authorities such as the European Commission).
Common Law and Anglo-American Law
In the common law system, Conduct is used, especially in tort law, contract law, and criminal law, as a standard of evaluation. The concept of ‘Reasonable Conduct’ (appropriate behavior) also plays a significant role.
Conduct and Compliance
Behavioral Obligations in Companies
Corporate compliance management establishes binding rules and codes of conduct (Code of Conduct) to ensure lawful and ethically proper conduct of employees, managers, and business partners.
Legal Consequences of Compliance Breaches
Faulty conduct can trigger significant legal sanctions, including fines, claims for damages, criminal prosecution, up to inclusion on sanctions lists and trade exclusions.
Proof and Documentation of Conduct
Burden and Presentation of Proof
In civil proceedings, the proven conduct often determines the outcome of the case. In particular, the substantiation and proof of contractual conduct, breaches of duty, or violations of regulations are decisive for the success or failure of legal enforcement.
Documentation Duties
For legally secure proof, careful documentation of conduct is required in the form of behavior logs, emails, witness and video statements, or other objective evidence.
Summary
The term ‘Conduct’ is of central importance in law and extends to all relevant areas of life in which behavior is legally assessed. The evaluation of conduct is decisive for the emergence, existence, and enforcement of claims, sanctions, as well as rights and obligations. In all areas of law, analysis of an individual’s specific behavior is the main starting point for liability, sanctions, and legal protection. The implementation and supervision of lawful conduct is thus a core task for individuals, organizations, and state institutions.
Frequently Asked Questions
What legal consequences can a breach of internal company conduct guidelines (Conduct Guidelines) have?
Violations of internal company conduct guidelines (Conduct Guidelines) can have far-reaching legal consequences. First, it must be determined whether the rules are explicitly anchored in employment contracts, works agreements or collective agreements, as this gives them binding effect. A violation may result in employment law measures such as warnings or dismissals, provided that the behavior constitutes a significant breach of duty. In addition, violations can also lead to claims for damages against the company, for example if the behavior causes harm to a third party and the company is accused of selection or supervisory fault. Furthermore, it should be considered that particularly serious breaches of duty, such as discrimination, bullying, or corruption, can lead to not only employment law but also criminal consequences and fines. Finally, a violation can also have liability law consequences for the executive bodies of a company, especially if they have not sufficiently complied with their supervisory and control duties.
To what extent are Conduct Guidelines legally binding and how are they enforced?
The legal binding nature of Conduct Guidelines largely depends on how they have been incorporated into the individual employment relationship. If the guidelines are part of the employment contract or have been introduced via a works agreement, they have an immediate legal effect. Their enforceability is governed by labor law; this means violations can be sanctioned with measures such as warnings, transfers or, in extreme cases, dismissals. In companies without a works council, guidelines can also be implemented unilaterally by employer instructions, albeit always within the scope of managerial authority and in compliance with legal regulations, particularly when affecting fundamental rights. For managers and bodies, failure to observe Conduct Guidelines can also result in civil or criminal liability risks, such as in the case of omitted supervision or failure to address compliance violations. In practice, enforcement often takes place via internal control systems (e.g., whistleblowing hotlines, compliance officers), whose introduction and design must be checked to ensure they are compatible with data protection and co-determination rights.
How does a breach of Conduct Guidelines affect civil liability?
A breach of Conduct Guidelines can lead to civil liability depending on the circumstances. This is particularly the case if the breach of duty causes harm to a third party—for example, a customer, business partner, or another employee. The company may be liable for the actions of its organs or employees under § 278 BGB (vicarious agent) or § 831 BGB (person employed in the performance of an obligation). In addition, individual claims for damages can also arise against the acting person themselves, provided there is intentional or grossly negligent misconduct. Furthermore, organs of a legal entity can be held personally liable under governing body liability rules pursuant to §§ 93, 116 AktG or § 43 GmbHG if they are accused of breaching management or supervisory duties. Compliance with Conduct Guidelines serves as a benchmark for the legality and appropriateness of corporate decisions. In the event of damage, non-compliance may substantiate allegations of breach of duty of care.
What criminal risks are associated with violations of internal Conduct Guidelines?
Offenses that may be associated with violations of Conduct Guidelines include, in particular, corruption (§§ 299 et seq. StGB), breach of trust (§ 266 StGB), fraud (§ 263 StGB), data protection offenses (§ 42 BDSG), discrimination (§ 130 AGG), sexual harassment (§ 184i StGB), and breach of secrets (§ 203 StGB). Conduct that violates both internal behavioral rules and statutory criminal provisions can trigger criminal investigations—both against the acting individual and in the sense of corporate responsibility (§ 30 OWiG), which can result in substantial fines. Managers are additionally subject to a criminal duty of guarantee (§ 13 StGB) in the event of failure to prevent criminal offenses. In particular, compliance officers and members of management are obliged to implement appropriate measures to prevent criminal actions and to respond promptly if there is suspicion.
What role do works councils and employee representatives play from a legal perspective when introducing and monitoring Conduct Guidelines?
From a labor law perspective, the introduction and design of Conduct Guidelines is generally subject to the co-determination rights of the works council under § 87 Para. 1 Nos. 1, 6, and 7 BetrVG, if they regulate employee behavior in the workplace or involve technical monitoring devices. The works council must also be involved in any changes or expansions. If co-determination rights are violated, the works council may have a claim for cessation. Substantive participation ensures a balance of interests and protects employees from unreasonable or disproportionate requirements. In addition, the works council acts as a contact point for employee complaints regarding the application and interpretation of Conduct Guidelines and can act as a mediator in conflicts.
How are international companies legally required to harmonize various local Conduct Guidelines?
International companies face the challenge of adapting company-wide Conduct Guidelines to various local legal requirements and harmonizing them in a legally compliant manner. The principle of localization applies: internal company standards may never contradict mandatory national law. The requirements must be structured such that they comply with local labor law, data protection, anti-discrimination, and, if applicable, criminal law provisions. If global guidelines violate national regulations, this may result in substantial legal consequences, including fines, invalidity, and claims for damages. Companies are advised to conduct regular legal reviews and adjustments with lawyers knowledgeable in the relevant national law, as well as to closely cooperate with the local works council or employee representatives to ensure compliance with all regulations.
To what extent can compliance with Conduct Guidelines have a liability-reducing effect in the event of a legal dispute?
Compliance with and active implementation of Conduct Guidelines can have a mitigating effect on liability in a legal dispute, especially regarding the attribution of organizational fault or leadership duties within the company. According to the principle of compliance defense, a demonstrably effective compliance system—including the implementation and supervision of Conduct Guidelines—favors the assessment of degree of fault. In the event of damage or investigation, the company can show that all necessary and reasonable measures to prevent illegal acts were taken, which can mitigate criminal and civil liability. Courts are increasingly recognizing companies’ efforts in prevention and compliance, provided these are demonstrably effective and continually adapted and monitored. Compliance that is verifiably practiced also reduces personal liability risks for managers and governing bodies.
