As you are an entrepreneur and want to open your own business in Germany, you will have to conclude a lot of contracts. The legal regulations regulate the interaction between you and your customers, your employees and your competitors. For example, if you are self-employed in trade, you will conclude contracts with customers and suppliers on a daily basis. In order to facilitate business transactions, pre-formulated contractual terms, so-called general terms and conditions [Allgemeine Geschäftsbedingungen (AGB)], are common. Dealing with customer complaints also plays an important role. There are big differences between warranty, guarantee and product liability. Right at the start of your self-employment, remember to grant powers of attorney for both emergencies and the smooth running of day-to-day business.

Template contracts are available on the websites e.g. of the Chamber of Industry and Commerce. You will see on the next slide the main points which you should take into consideration by concluding contracts.

• Terms and conditions [Allgemeine Geschäftsbedingungen (AGB)]

General terms and conditions (GTC) are pre-formulated contractual terms that you specify for your contractual partner. You can find all the details by following the link:  

https://www.existenzgruender.de/DE/Unternehmen-fuehren/Recht-Vertraege/Allgemeine-Geschaeftsbedingungen/inhalt.html

• Laws and regulations [Gesetze und Verordnungen]

Find out about the legislation that is relevant to your company and industry. As an employer, you must also make employee protection laws publicly available in the company. More details on: https://www.existenzgruender.de/DE/Unternehmen-fuehren/Recht-Vertraege/Gesetze-Verordnungen/inhalt.html

• Warranty, guarantee, product liability [Gewährleistung, Garantie, Produkthaftung]

In the event of defects, your customer can make claims against you. They result from the warranty, e.g. the legal liability of the seller as well as the guarantee services that you voluntarily offer and product liability, the legal liability of the manufacturer, the importer or, if applicable, the seller/supplier. More details on: https://www.existenzgruender.de/DE/Unternehmen-fuehren/Recht-Vertraege/Gewaehrleistung-Garantie-Produkthaftung/inhalt.html

• Validity [Gültigkeit] 

Contracts can be concluded orally or written. Some daily things, for example purchasing goods or office stuffs can be concluded in oral form. Such contracts between consumers and entrepreneur like loan agreements and many else should be fixed in a written form. Land transfers and property encumbrances [Grundstückslasten] additionally have to be notarised.

• Termination [Kündigung]
  

The longer a contract runs, the longer the notice period is. Before starting a contract, every founder should also think about the advantages and disadvantages of these notice periods. Long notice periods offer more security, short notice periods provide more flexibility.

• Term [Laufzeit] 

Contracts can be concluded for a fixed term or for an indefinite period. The advantage of fixed conditions is that there is a certain guarantee for both parties. On the other hand, short notice periods provide greater flexibility.

• Power of attorney [Prokura]
  

The power of attorney is the most comprehensive procuration. The authorized representative can - almost - carry out all legal transactions. Outwardly, he steers the company's fortunes almost independently. More details on: 

https://www.existenzgruender.de/DE/Unternehmen-fuehren/Recht-Vertraege/Prokura/inhalt.html

• Keep documents [Unterlagen aufbewahren]

Entrepreneurs are required by tax or commercial law to keep books and records must keep their business records. This also applies to all traders when certain sales or profit limits are exceeded. The sales limit is currently (2020) EUR 500,000, the profit limit is EUR 50,000. Link: 

https://www.existenzgruender.de/DE/Unternehmen-fuehren/Recht-Vertraege/Unterlagen-aufbewahren/inhalt.html

• Binding effect [Verbindlichkeit]

Each side of the contract is responsible for fulfilling their obligations. Negotiation process is very important.

Emails are recognized only if they have  a digital signature in accordance with the Digital Signature Act. 

• Contract law [Vertragsrecht]

The contract law regulates certain questions, for example, when the concluded contract does not reflect what you wanted to agree on. Or you made mistakes which caused some problems for you. “Bad” contracts can lead to major financial losses and in individual cases even cost the young company a livelihood. Link: 

https://www.existenzgruender.de/DE/Unternehmen-fuehren/Recht-Vertraege/Vertragsrecht/inhalt.html

• Further powers of attorney [Weitere Vollmachten]

You can delegate certain tasks to one of your employee (see also procuration) if you have a business trip, illness or vacation. It will help to avoid that your company is without management. It is called power of attorney. In addition to the attorney there are other agency relationships. You can read these points by clicking on the link:

https://www.existenzgruender.de/DE/Unternehmen-fuehren/Recht-Vertraege/Weitere-Vollmachten/inhalt.html