Term and general definition of disposability
The term disposability refers in the legal context to the state or ability to effectively and legally, without restriction, dispose of an object, a right, or an asset. This includes both the actual and legal possibility to make a disposition—that is, to bring about a legal transaction changing the corresponding legal situation. Disposability is of central importance in property law, obligation law, insolvency law, as well as tax law.
Disposability in property law
Significance for disposals
In property law, especially regarding the acquisition of ownership or the transfer of other real rights, disposability plays a crucial role. An effective disposal, such as the transfer of ownership of a movable object pursuant to § 929 German Civil Code (BGB), requires that the transferor is both willing and entitled to dispose. While the power of disposal describes the legal authority, disposability regularly refers to the actual and legal ability to execute the disposition.
Connection to possession
For disposability, it is essential that the person entitled to dispose has direct or indirect possession of the object or at least is able, with the possessor’s consent, to obtain such possession. If this is not the case, a disposition may simply fail because no actual act is possible, such as handing over the object or granting a real right to it.
Disposability in transport and warehousing relationships
In situations where objects are in the possession of freight forwarders, warehouse operators, or trustees, disposability is measured by the extent to which the beneficiary is actually and legally able to exercise access to and control over the item. Particularly in the context of a constitutum possessorium (§ 930 BGB) or a possession mediation relationship, disposability is often a collective assessment criterion.
Disposability in the law of obligations
Obligation and disposition transaction
In obligation law, disposability particularly refers to situations where a debtor is able to provide the owed performance without further legal obstacles (§ 275 BGB). In the context of security rights, such as transfer by way of security or security assignment, it is further required that the assignor can dispose of the object directly before or at the time of establishing the right.
Significance for performance (§ 362 BGB)
For the performance of an obligation, the party rendering performance must be disposable regarding the item to be rendered. If this condition is lacking, performance is impossible or at least entails legal risks for both parties.
Disposability in insolvency law
Access possibilities for the insolvency estate
In insolvency law, disposability is decisive when determining whether an asset falls into the insolvency estate and whether the insolvency administrator is authorized to dispose of it. It must be assessed whether, at the time insolvency is opened, actual and legal disposability existed regarding the object, or if it was blocked by third parties, reservations, or security rights.
Distinction from power of disposal and protection against creditor disadvantage
The distinction between disposability and power of disposal is of considerable importance in insolvency proceedings, for example in the law of avoidance and so-called estate liabilities. Only those assets that are disposable in this way are subject to creditor protection and equal satisfaction.
Disposability in tax law
Tax inflow and access
In tax law, in questions of receipt of income (§ 11 Income Tax Act – EStG), disposability is a decisive criterion. Income is considered received as soon as the taxpayer can economically dispose of it. The key point is from when the taxpayer is in a position to handle the economic benefit at their discretion, for example, by payment, assignment, or pledging.
Structuring of tax burdens
Presumed or actual disposability may affect the allocation of tax duties and rights, especially in trust relationships, security assignments, or conditional arrangements.
Distinction: Disposability, power of disposal, and possession
Disposability must be differentiated from the power of disposal, which refers to the legal entitlement to dispose, regardless of actual feasibility. Possession, in turn, describes actual control over the object outwardly, without necessarily establishing disposability.
Importance in case law
Case law regularly defines disposability as being present when a person has the objective ability to dispose of an asset as is typically the case for an owner or someone with economic control. Within causal and dispositive transactions, the precise moment of disposability is relevant, for instance in cases of conditions, terms, or security clauses.
Practical relevance and areas of application
Knowing the requirements and legal consequences of disposability is of central importance in all areas where objects, rights, or claims are transferred, assigned, or encumbered. It is a prerequisite for secure legal transactions, effective collateralization, and tax planning.
Summary
Disposability is a fundamental prerequisite and a central criterion for the effectiveness of legal transactions concerning assets, rights, and other objects. It operates in various areas of law as a hinge between law and reality and is essential for the legally effective transfer, encumbrance, collateralization, and valuation of claims and property. Accurate legal classification and distinction are of considerable importance for the application and structuring of legal transactions.
Frequently asked questions
Is the agreement regarding disposability subject to any specific legal form requirements?
As a rule, an agreement regarding disposability, for example in labor law, can be informal unless a collective agreement, works agreement, or other collective norms prescribe a particular form. Thus, the employer and employee can generally agree orally or in writing about the arrangements and extent of disposability. However, for reasons of legal certainty, it is urgently recommended to document such agreements in writing so that clear evidence exists for possible disputes, such as concerning working time or compensation. In certain sectors, there may be mandatory requirements regarding the form, documentation, and prerequisites for disposability on the basis of collective agreements or works agreements, such as notice periods or permitted scope.
What legal requirements exist for the remuneration of disposability?
German labor law distinguishes between active working time, on-call duty, and on-call/disposability. Disposability is legally relevant insofar as, during this time, the employee does not necessarily have to remain at the workplace but must be prepared to commence work at any time. By law, there is generally no entitlement for disposability to be remunerated as full working time, provided there is no individual or collective agreement stipulating otherwise. Often, a lower remuneration is agreed for times of disposability, whose appropriateness must be reviewed in each individual case. According to § 611a BGB, the principle of freedom of contract applies, but undercutting minimum wages or collectively agreed standards is always inadmissible. In cases of doubt, the labor court will decide on a case-by-case basis.
How does disposability relate to rest periods under the Working Hours Act?
The Working Hours Act (ArbZG) regulates in §§ 5 and 7 the minimum rest periods and exceptions to them. Disposability that occurs outside the company and without actual commencement of work is usually not regarded as working time within the meaning of the ArbZG, but often falls within the rest period. However, as soon as work is actually carried out during the phase of disposability, this interrupts the statutory rest period and starts a new one. Employers are obliged to take this into account when planning operational working times. In case of dispute, the competent labor court will decide whether, in a particular case, the nature of disposability qualifies as working time or rest period—with particular reference to the case law of the European Court of Justice (ECJ).
Must the works council be involved in the introduction of disposability?
According to § 87 para. 1 nos. 2 and 3 Works Constitution Act (BetrVG), the works council has a mandatory co-determination right regarding the introduction and structuring of disposability, especially when it concerns the organization and distribution of working time or issues of company order. Thus, the employer is obliged to reach agreement with the works council before introducing disposability or, if agreement cannot be reached, to refer the matter to the conciliation committee. If co-determination is disregarded, the order for disposability is regularly invalid. Works councils should ensure that rules on notice periods, remuneration, and health protection are included.
What employment law consequences does the employer face for violations of legal regulations regarding disposability?
If the employer violates mandatory statutory provisions or collective regulations in connection with the ordering or remuneration of disposability, employment law sanctions may result. These range from obligations to make back payments—such as in case of insufficient remuneration or failure to grant rest periods—to fines under § 22 ArbZG. Furthermore, in serious cases, the employee may invoke the right to refuse performance, seek damages, or have the unilateral order of disposability reviewed by a court. If the employer acts in disregard of the co-determination rights of the works council, the works agreement or individual order may be invalid.
Which party bears the burden of proof in a dispute over disposability?
In disputes about the classification, remuneration, or lawful ordering of disposability, the employer generally bears the burden of presentation and proof that statutory and contractual requirements have been met. In particular, the employer must demonstrate that statutory maximum working hours have not been exceeded and that rest periods have been observed. In case of ambiguity regarding the content and scope of agreed disposability, the general rules on the distribution of the burden of proof under the Code of Civil Procedure (ZPO) and civil law apply. Employees are well advised to keep their own working time records to substantiate their claims.
