Term Explanation: Asocial Legal Transactions
The term “asocial legal transactions” is not directly used in the wording of German or Austrian civil law statutes. However, it is employed in legal literature to refer to transactions whose content violates social minimum standards or fundamental societal values. In a broader sense, the term includes contracts and declarations of intent that are incompatible with fundamental principles of law, custom, and morality and are therefore legally restricted in their validity or void.
Legal Basis for Asocial Legal Transactions
Immorality pursuant to § 138 BGB
The central legal instrument for the assessment of asocial legal transactions under German civil law is the provision of § 138 of the German Civil Code (BGB). According to paragraph 1 of this provision, a legal transaction is void if it violates good morals (so-called immorality). This particularly includes transactions that contravene the sense of decency of all fair and just-minded people. Comparable provisions also exist under Austrian law, such as § 879 of the General Civil Code (ABGB).
Definition of “good morals”
The “good morals” is an indeterminate legal term that is shaped by case law and prevailing opinion. Guidance is provided by the ethical sense of the community, social ethos, and the values enshrined in the constitution.
Other Relevant Provisions
- § 134 BGB: Nullity of transactions that violate a statutory prohibition.
- § 826 BGB: Liability for damages in cases of intentional, immoral harm.
- § 879 ABGB (Austria): Nullity for violation of good morals.
Manifestations of Asocial Legal Transactions
Usury (§ 138 para. 2 BGB)
The legislator already considers so-called usury to be a particularly severe form of asocial legal transaction. According to § 138 para. 2 BGB, a transaction is void if someone, by exploiting another’s predicament, inexperience, lack of judgment, or significant weakness of will, promises financial advantages for performance that are grossly disproportionate to the service rendered. The threshold for a usurious transaction is regularly exceeded in the context of loan agreements, lease contracts, or immoral sureties.
Contracts with Immoral Content
Asocial legal transactions are also considered to include those that pursue an immoral or unethical purpose, such as contracts for prohibited acts, the facilitation of criminal or immoral acts, or socio-ethically disapproved agreements (such as oppressive contracts, total subordination clauses, nondisclosure agreements relating to violations of the law).
Discriminatory or Exploitative Contracts
This term also covers legal transactions that disadvantage individuals or groups in a discriminatory, degrading, or exploitative manner—for example, through extreme imbalances in contractual obligations, immoral working conditions, or violations of the General Equal Treatment Act (AGG).
Legal Consequences of Asocial Legal Transactions
Nullity
The central legal consequence of asocial legal transactions is, according to § 138 BGB, generally absolute nullity. This means the transaction has no legal effect from the outset. Any performance already rendered may be reclaimed under the law of unjust enrichment (§§ 812 et seq. BGB), unless statutory exclusion reasons apply (e.g., § 817 sentence 2 BGB).
Consequences for Ancillary Agreements and Partial Invalidity
If the legal transaction is only partially immoral, the so-called “blue-pencil test” allows the otherwise effective part of the contract to be maintained, provided this corresponds to the parties’ presumed intent and the remaining validity is legally permissible.
Claims for Damages
If one party is particularly disadvantaged or harmed by an asocial legal transaction, there may under certain circumstances be a claim for damages pursuant to § 826 BGB for intentional immoral harm.
Distinction from Other Invalid Transactions
Asocial legal transactions must be distinguished from other invalid transactions, such as those void under a statutory prohibition pursuant to § 134 BGB, which do not necessarily have to be immoral. They are also different from transactions that can be contested due to mistake, duress, or deception (see § 119 et seq. BGB, § 870 ABGB) or those that are void due to lack of legal capacity (§ 104 et seq. BGB).
Significance and Societal Context
Asocial legal transactions are of considerable significance in the fields of consumer protection, labor law, tenancy law, and contract drafting in general. The term is subject to continuous substantive development through judicial decisions and evolving societal values. Immorality is not defined timelessly; instead, it must be assessed against the prevailing moral and legal standards of the community.
Case Law on Asocial Legal Transactions
Courts regularly deal with cases requiring the assessment of asocial legal transactions. The following rulings are noted as examples:
- Federal Court of Justice, judgment of January 19, 2001 (V ZR 437/99): Immorality of an extremely excessive broker’s commission
- Federal Court of Justice, judgment of May 13, 2014 (XI ZR 170/13): Invalidity of immoral processing fees in consumer loans
- Supreme Court (Austria), May 22, 2007, 10 Ob 59/07x: Abusive contract clauses and immorality
These decisions highlight the dynamic development and the significance of value judgments in the assessment of each individual case.
Summary
The term “asocial legal transactions” refers to transactions whose content violates social minimum standards, the sense of decency, and fundamental societal values. In practice, immorality (§ 138 BGB, § 879 ABGB) is the decisive criterion. Typical manifestations are usury, exploitative contracts, and agreements with discriminatory content. Legal consequences range from nullity to claims for damages and even partial invalidity. The assessment remains case-specific and evolves with the values of the time.
Frequently Asked Questions
What requirements must be met for the nullity of an asocial legal transaction?
According to § 138 para. 1 BGB (German Civil Code), an asocial legal transaction can be void if it violates good morals. Certain requirements must be met for nullity. First, there must be an objective, serious violation of the sense of decency shared by all fair and just-minded people. This means that the transaction must be so immoral that the law can no longer protect it. Typical examples are transactions that entail a significant disregard of social value concepts, such as by exploiting a predicament, inexperience, or a conspicuous imbalance between performance and consideration (usury, § 138 para. 2 BGB). In certain cases, a subjective element is also required: the actor must usually have acted with knowledge of the reprehensible circumstances and at least with conditional intent. Judicial review is always on a case-by-case basis and takes into account the particular circumstances at the time the contract was concluded.
Can an asocial legal transaction be retroactively approved or subsequently remedied?
A transaction that has been declared void as asocial can, in principle, not become valid through subsequent approval or remedy. Nullity operates ex tunc, i.e., from the time the contract was concluded. This means the transaction is treated as if it never existed. Even a later approval by the parties or a change in the underlying circumstances cannot remove the immorality. Exceptions only exist in rare cases, for example, if after its original immorality the transaction is transformed through substantive changes into a legal situation and then newly concluded.
What is the significance of the subjective element in asocial legal transactions?
In addition to the objective violation of good morals, a subjective element may also be required for immorality. In particular, in circumstances such as usury (§ 138 para. 2 BGB), a conscious exploitation of the contracting partner’s weak position is necessary. The actor must know about the weakness or distress of the other party and deliberately use this to his advantage. In other scenarios, immorality can sometimes already be established if there is a gross imbalance, provided further reprehensible circumstances are present. In case of doubt, the court examines whether both parties knowingly entered into an immoral contract or whether one was unaware.
What legal consequences arise from the nullity of an asocial legal transaction?
The most important legal consequence of the nullity of an asocial legal transaction is that it has no effect between the parties; the transaction is invalid “from the outset.” This also means that any performance already rendered must generally be returned (§ 812 BGB – unjust enrichment). In cases where both parties have acted immorally, § 817 sentence 2 BGB can prohibit restitution: those who have violated a statutory ban or good morals may not be able to recover what has been given. The purpose of this rule is to deter parties from entering into immoral transactions by depriving them of any benefits gained.
Who bears the burden of proof for the immorality of a legal transaction?
The burden of proof for the immorality of a contract generally lies with the party asserting nullity. This means that they must substantiate and prove the objective and, if applicable, subjective elements. The assessment of what constitutes immorality within the meaning of § 138 BGB depends on the individual case and is constantly developed by court rulings. In court proceedings, the presentation and burden of proof regarding the specific circumstances also play a significant role, for example, in determining whether a party was in a predicament or there was a glaring economic imbalance.
Are unilateral legal transactions also covered by the provision on asocial legal transactions?
Yes, § 138 BGB applies not only to contracts but also to unilateral legal transactions, such as the drafting of wills or promises of gifts. Here too, the transaction can be void if it violates good morals. In the case of unilateral transactions, the court also examines whether there is a serious violation of the general values of society and whether there are particular circumstances that justify immorality.
Are there specific limitation periods for asocial legal transactions?
The nullity of an asocial legal transaction is generally permanent; the determination of nullity is not subject to a statute of limitations, as it concerns the invalidity of the transaction itself. However, claims for restitution of performance rendered are subject to the general limitation rules, in particular the regular three-year limitation period under § 195 BGB. The period begins at the end of the year in which the claim arose and the creditor became aware of the circumstances giving rise to the claim or would have become aware without gross negligence.
