Definition and legal significance of the term “Generally”
The term “Generally” originates from English and means commonly, usually, or fundamentally. In legal texts, contracts, and statutes, “generally” is used to describe statements, provisions, or principles that apply as a rule unless otherwise specified or exceptions exist. The precise interpretation of this term is of central importance, as it affects the application of law, contract interpretation, and the determination of specific legal consequences.
Use of the term “Generally” in law
Classification and general significance
In a legal context, “generally” serves as a restrictive or broadening term that clarifies that a statement does not apply absolutely, but under ordinary circumstances or according to established understanding. This leads to the possibility of exceptions or divergent rules, for example by adding clauses or through statutory reservations.
Example usage
- Statutory texts: “Generally, this provision applies unless otherwise agreed by the parties.”
- Contracts: “The tenant is generally permitted to use the premises for residential purposes.”
In both cases, “generally” signals that exceptions to the general rule may arise, whether through individual contractual agreement or through specific legal norms.
Interpretation and application of “Generally” in legal sources
Contract law
In contract law, the use of “generally” plays a significant role in interpreting declarations of intent and contractual provisions. It indicates that the relevant provision applies in principle but leaves room for individual deviations. Thus, a clause describing an obligation, right, or limitation as “generally” can, in the event of a dispute, lead to a teleological or systematic interpretation to clarify the meaning and purpose of the exception.
Statutory interpretation
In legal texts, “generally” indicates that a certain legal principle or norm does not apply without exception. This is often combined with so-called rule-exception relationships in order to give the application of the law flexibility. The specific context is crucial as to whether a “general rule” exists from which explicit or implicit exceptions may deviate.
International law and common law
In common law as well as in international contract and commercial law, “generally” is a key terminological element, for example in international conventions, standard documents, or in the interpretation of UN sales law (CISG). Here, the term denotes customary practices (“general principles”) and underlines the significance of recognized business usages (“generally accepted trade usages”).
Case law and practice
Significance in judicial decisions
Courts use the formulation “generally” to describe typical scenarios and their legal treatment. In practice, there is often a review as to whether sufficient grounds exist in a particular case for deviating from the “general” rule. The court’s instructions specify the need to clarify the scope and conditions for exceptions.
Contractual relationships and exceptions
The use of “generally” allows contracting parties to flexibly respond to divergent circumstances when necessary, without making the legal framework as a whole rigid. In disputes, however, this openness can lead to disagreements about the scope of applicable exceptions. What is crucial here is the careful documentation and justification of any deviating agreements.
Impact on legal interpretation and the rule-exception system
Interpretation rules
Since the term does not claim absolute validity, systematic interpretation is decisive. In the context of contract interpretation, “generally” is often used to clarify that in the absence of other provisions, the referenced principle applies. The rule-exception system helps to appropriately assess individual cases.
Examples from international contracts
International documents such as the UNIDROIT Principles of International Commercial Contracts or the United Nations Convention on Contracts for the International Sale of Goods use “generally” to define globally applicable principles and the exceptions that may apply.
Summary and relevance in modern legal transactions
The term “generally” has a central function in law: it creates room for flexibility, allows for exceptions, and supports dynamic adaptation to different circumstances. The interpretation of “generally” requires careful balancing in light of the circumstances of the individual case, the contractual arrangements made, and the relevant statutory provisions or commercial practices.
Literature references and further sources
- Black’s Law Dictionary (definition and application examples)
- UNIDROIT Principles of International Commercial Contracts (2016)
- United Nations Convention on Contracts for the International Sale of Goods
- Commentaries on international private and contract law
The term “generally” can be regarded as a key concept in law that, when interpreted correctly, helps ensure appropriate and case-specific application of the law.
Frequently Asked Questions
What legal framework conditions must be observed when applying “Generally” in German law?
In German law, “Generally” refers to terms, principles, or provisions that establish generally applicable rules. The legal application of generally accepted principles is, on the one hand, based on customary law, which according to § 1 BGB may apply subsidiarily to written law unless the parties have excluded this. In certain areas of law, such as commercial law (§ 346 HGB), “general public attitudes” or “trade usages” play a significant role, as they determine the parties’ scope of action and provide legal certainty. Furthermore, in contract law, generally valid standards (e.g. trade practices, § 157 BGB) and requirements of good faith are used to interpret unclear contractual provisions. In corporate law and in international contexts, generally accepted principles are particularly applied in connection with “good governance”, compliance rules, or with accounting standards such as Generally Accepted Accounting Principles (GAAP). However, it is always necessary to check whether specific statutory provisions apply to a particular matter, as these usually take precedence over general principles.
In which cases do generally accepted principles play a role in court?
Courts frequently resort to “generally” accepted principles when the law allows interpretative leeway or requires good morals, good faith (§ 242 BGB), or proper conduct. Such principles are particularly relevant when assessing custom, industry-specific practices, and trade usages, and failure to follow them can lead to legal consequences such as the invalidity of contracts or claims for damages. When interpreting indefinite legal concepts (e.g. “reasonable discretion,” “reasonable period,” or “within the usual course”), courts are obliged to adhere to generally accepted standards. The recourse to general principles also occurs when there are gaps in the law, by way of analogy or the development of judge-made law, and is regularly part of judicial reasoning. In international private law, general legal principles are especially important when there are no uniform national rules and the applicable substantive law remains undetermined.
What role does the “Generally principle” play in international contract law?
In international contract law, “generally accepted principles” are particularly significant because they can serve as a neutral basis for contract interpretation across national borders. This is well known from the UN Convention on Contracts for the International Sale of Goods (CISG), where, according to Article 7 CISG, gaps in the contractual framework are to be filled by recourse to generally accepted principles, if any exist. Lex Mercatoria—the international commercial custom—relies largely on generally accepted trade usages, practices, and principles. In arbitration, especially under the rules of international arbitral institutions, such principles are regularly referenced to efficiently decide disputes in line with international business expectations. However, a careful distinction must be made from specifically codified law as well as from party autonomy, since parties can explicitly exclude the application of general principles.
Can generally accepted principles be legally binding?
Generally accepted principles can be legally binding if they are expressly recognized as a source of law (e.g. trade usages in commercial law) or if they are made applicable by contractual agreement between the parties. The BGB and HGB provide for the legal binding nature of such principles especially when it comes to interpretation issues and references to trade customs and usages. Furthermore, legal binding force can also arise from international treaties when, for example, reference is made to the “general principles of law” as the relevant regulatory sources. Such a principle, however, only has immediate legal effect if it is not restricted or excluded by mandatory statutory provisions. Thus, the application of generally accepted principles is always context-dependent and shaped by the respective national, supranational, or international legal order.
How are generally accepted principles considered in corporate law?
In German corporate law, generally accepted principles play an important role, for example in protecting the interests of minority shareholders, within the framework of corporate governance, or in the duty of care of management bodies. They are, for example, specified in indefinite legal concepts such as “proper business management” (§ 43 GmbHG, § 93 AktG): this includes the generally recognized obligations and standards of care according to the state of science, practice, and industry-specific experience. Breaches of this standard can lead to personal liability for company organs. In the course of mergers, transformations, or corporate takeovers, generally accepted valuation principles and transparency obligations provide legal certainty and guidance above and beyond statutory regulations.
What is the significance of generally accepted principles in relation to compliance?
The term “compliance” encompasses adherence to legal requirements, internal policies, and generally accepted standards within a company. Generally accepted principles such as integrity, transparency, and responsible corporate governance have a fixed place within a compliance management system, as these fundamentals serve as a guide for individual and organizational behavior. Non-compliance with accepted industry standards or international benchmarks can lead to liability for companies and their officers (§ 30 OWiG, § 130 OWiG). In business practice, this means that not only mandatory law, but also “generally accepted standards” must be taken into account and continuously adapted to the state of the art or market practices. Numerous guidelines, such as OECD Guidelines, therefore may not have the force of law, but are nevertheless used as a benchmark for proper conduct by courts and supervisory authorities.
