Definition and Meaning of “subject to change”
The term “subject to change” is a common term in German legal and commercial transactions, particularly used when making declarations of intent during contract negotiations. It denotes a legal reservation clause indicating that the declaration made – such as an offer or quotation – is non-binding and thus does not trigger any legally binding obligation.
Definition
“Subject to change” means that the party making the declaration expressly reserves the right to alter, withdraw, or reject their declaration, without a binding contract being established. If an offer is designated as subject to change, it lacks the necessary intention to be legally bound for a contract conclusion. Therefore, acceptance of the offer by the recipient does not immediately lead to a valid contract, but instead constitutes a new offer which must first be confirmed by the original party who made the offer.
Legal Classification and Importance in Civil Law
The non-binding offer in the context of contract law
According to §§ 145 ff. BGB (German Civil Code), a distinction must be made between a binding offer and a mere invitatio ad offerendum (invitation to make an offer). A non-binding offer is legally generally understood as an invitatio ad offerendum. By adding the term “subject to change”, the provider indicates that they do not intend to enter into a legally binding commitment by their declaration.
An acceptance by the recipient is therefore considered their own offer, which in turn must be accepted by the original offeror in order to form a contract. The reservation of the non-binding declaration thus prevents an automatic contract formation according to § 151 BGB.
Non-binding Nature and Exceptional Cases
The non-binding clause usually deprives the declaration of intent requiring receipt of the intention to be legally bound. In exceptional cases, based on good faith (§ 242 BGB) and taking into account commercial customs (§ 157 BGB), a binding offer can still be assumed through an objective interpretation, if the recipient could legitimately trust in the conclusion of a contract. However, this requires special circumstances and is subject to strict requirements.
Industries and Areas of Application
Sales and Commercial Law
In commercial business (commercial law), the reference “subject to change” is particularly found in price lists, catalogs, as well as offers related to goods, services, or real estate. It protects the provider from interim price fluctuations, prior sales, or other unforeseen developments that may necessitate subsequent changes to offer conditions.
Real Estate Law
In real estate law, “subject to change” has a special significance. Brochures from brokers, advertisements, and other listings are regularly non-binding, so that concrete contractual claims only arise with a separate offer and acceptance. The wording serves here to protect against unwanted obligations in a dynamic market environment.
Delivery and Service Commitments
“Subject to change” can also be used in the context of delivery times and other performance commitments, to clearly indicate limitations on obligations, for example regarding availability, quantities, or quality.
Distinction from Other Legal Terms
Invitatio ad offerendum
The invitatio ad offerendum (invitation to make an offer) is legally significant, as not every declaration to the outside world constitutes a binding offer. A non-binding offer is always to be understood as such an invitation to make an offer. Typical examples are store displays, internet offers, or product catalogs.
The Binding Offer
In contrast, a binding offer, upon receipt by the recipient according to § 145 BGB, cannot be unilaterally revoked unless it includes a time limit or an explicit reservation of revocation. An indication that it is “subject to change” negates the intention to be legally bound and renders the offer non-binding.
The Offer with a Reservation of Revocation
In contrast to the non-binding clause, an offer may also contain a separate reservation of revocation (cf. § 145 BGB in conjunction with § 130 para. 1 BGB), which, however, must be treated differently in legal doctrine. With a non-binding offer, there is no intention to be bound from the outset, whereas with an offer with reservation of revocation, a binding commitment exists until the revocation occurs.
Legal Consequences and Legal Uncertainties
Acceptance of a Non-binding Offer
If a non-binding offer is accepted, there is initially no immediate contractual commitment. The acceptance is to be considered a counter-offer, which only leads to contractual commitment through confirmation by the original provider (now the recipient). The risk of disappointment in the contract is therefore borne by the recipient of the non-binding offer.
Legal Disputes
In practice, disputes may arise as to whether an offer described as non-binding is indeed non-binding or, in individual cases, should be considered binding. The crucial point is the objective interpretation of the declaration in the particular case. If, for example, the non-binding clause is misleading or incorporated inconsistently, a binding effect may still arise.
Warnings and Competition Law
In competition law, it must be considered that the use of the term “subject to change” in advertisements or price labeling for consumers must be transparent and clear (§ 5 UWG – Act Against Unfair Competition). Misleading information can be a ground for warning (cease-and-desist letter).
Statutory Provisions and Relevant Case Law
Legal Foundations
- BGB §§ 145-150: Regulation of offer and acceptance.
- HGB: Practical effects in commercial transactions (e.g., among merchants).
- UWG §§ 5 f.: Transparency and prohibition of deception in competition.
Important Judgments
- BGH, Judgment of 10.10.2001 – VIII ZR 13/01: On the understanding and interpretation of non-binding offers in commercial transactions.
- BGH, Judgment of 30.10.1995 – II ZR 58/94: On the effectiveness and interpretation of the “subject to change” addendum in contract negotiations.
Practical Notes on the Use of the Term
Clarification and Transparency
The use of the term “subject to change” should be clear and unambiguous. It is advisable to clearly indicate the lack of binding force already in the offer or quotation, and not to use the non-binding clause in contradiction with other clauses.
Documentation
For evidentiary purposes, it is advisable to expressly and clearly include the wording “subject to change” in the offer to prevent subsequent disputes. In international transactions, attention should be paid to linguistic and legal differences.
Conclusion
The term “subject to change” is an essential element in German civil and commercial law, ensuring legal flexibility in the initiation of contracts. Its use protects against unwanted commitments and allows adaptation to market changes and unforeseen circumstances. At the same time, correct application requires comprehensive knowledge of relevant legal principles and clear communication to avoid misunderstandings and disputes. In case of uncertainty, it is advisable to seek individual advice to ensure the legal consequences and effectiveness of the non-binding clause.
Frequently Asked Questions
How does the non-binding clause legally affect contract negotiations?
A non-binding clause in an offer, from a legal perspective, means that the offeror is not bound by their offer. Under German law, an offer is generally a declaration of intent that requires receipt and becomes binding upon receipt (§ 145 BGB). However, if an offer is marked as “subject to change” or “non-binding”, it constitutes merely an invitation to submit an offer (invitatio ad offerendum), not a legally binding offer within the meaning of the German Civil Code. As a result, the recipient cannot form a contract by accepting the offer. The offeror thus reserves the right to confirm or reject the final offer. This clause prevents hasty legally binding contracts, especially in transactions with frequently changing prices or inventories.
May the terms in a non-binding offer be changed after successful negotiation?
Legally, it is permissible for the conditions mentioned in non-binding offers – such as prices, delivery times, or quantities – to be subsequently changed, as these indications are precisely not binding. The offeror expressly reserves the right to modify the stated conditions until the final order confirmation is given. Once, however, an order confirmation for the previously non-binding offer is issued, the conditions become binding for both contracting parties. In practice, a final order confirmation reflecting the definitive contract terms is often sent after the customer’s acceptance declaration has been received.
Does a non-binding clause have to be explicitly mentioned in the offer?
From a legal standpoint, the effectiveness of the non-binding clause is not tied to any specific form, but it must be clearly and unambiguously evident from the offer text. If an offer is made without such an explicit clause, it is deemed binding according to statutory regulations. It is therefore in the interest of the offeror to include the non-binding clause in writing and unambiguously in the offer to avoid misunderstandings and later disputes. Case law generally requires that the limitation of the binding effect is clear to the recipient.
What legal risks exist with unclear non-binding declarations?
If the non-binding clause is imprecisely formulated or it is not clear to the recipient whether and to what extent any binding force exists, this may entail legal risks. In such constellations, a court may in case of dispute find that a legally binding offer nevertheless exists and a contract has been concluded upon acceptance. Furthermore, contradictory or unclear information in the offer must be interpreted to the detriment of the party using them (§ 305c para. 2 BGB regarding general terms and conditions). Companies are therefore advised to formulate the clause in legally unambiguous terms and verifiably embed it in communication.
Is the non-binding clause also legally effective in international trade?
In international trade, for example under the provisions of UN Sales Law (CISG), a clear distinction between binding and non-binding offers is also required. While the CISG does not expressly provide for a “non-binding” or “subject to change” clause, the principles are similar to German law: an offer described as “non-binding” or “subject to change” is likewise non-binding in the international context—unless the declaring party expressly waives non-binding status. Nevertheless, deviations may arise due to national special regulations or the interpretation of internationally common terms, so especially careful and, if necessary, multilingual drafting is recommended in cross-border transactions.
Can auctions or tenders also be provided with non-binding clauses?
Yes, especially in tenders or auctions, a non-binding clause is often used to allow the offeror to continue negotiating with several interested parties until final acceptance is granted. Here too, from a legal point of view, a contract is not formed merely by submission of an offer; rather, it remains non-binding for the bidder until acceptance (or award). The legal situation is therefore similar to conventional purchase offers: only with the award or express acceptance is a binding contractual effect created.
What role does the non-binding clause play in oral offers?
A non-binding clause may also be legally effective in oral offers, provided it is clearly communicated and understood by the contracting party. Legally, however, proving statements in case of dispute is problematic; therefore, for all non-binding actions—especially in larger transactions—a written record is recommended. If the oral reference to the non-binding clause is lacking, there is a risk that a commitment may arise in accordance with the general rules on declarations of intent.
