Why individual contract clauses cannot be overuled by general terms and conditions
International supply chains are regularly managed through group-wide framework agreements. The terms are negotiated centrally, while operational procurement is carried out by individual group companies. In practice, this often leads to legal disputes: orders are placed via standardized purchase orders, which frequently refer to own general terms and conditions of purchase. What applies in the event of a dispute: the individually negotiated framework agreement or the general terms and conditions used later?
In its decision of November 20, 2025 (I ZB 9/25), the Federal Court of Justice (BGH) provided a clarification relevant to legal practice in this regard. Individually negotiated contractual provisions may take precedence over conflicting general terms and conditions even with respect to third-party beneficiaries within the same corporate group. For companies with international procurement structures, this significantly increases legal certainty.
The dispute behind the decision
Many internationally active companies are familiar with this situation: A group company negotiates a global framework agreement, sets prices, liability provisions, and dispute resolution mechanisms, thereby establishing uniform conditions for the entire group. Operational procurement is then carried out by the individual affiliated subsidiaries – often automated via ERP systems and using their own purchasing terms. This quickly raises the question, at the latest in the event of a warranty claim or damage event, which contractual terms apply?
This was also the case in this ruling: While the group companies referred to the arbitration clause contained in the framework agreement, the supplier argued that the purchasing terms of the respective ordering companies were decisive. After all, the orders had been placed directly by these companies and, in some cases, processed with reference to the ordering companies’ own general terms and conditions.
The core statement of the Federal Court of Justice
The BGH did not follow the arguments of the supplier. In the view of the senate, individually negotiated contract clauses may retain their character as individual agreements even vis-à-vis the beneficiary subsidiaries. The prerequisite is that the interests of the subsidiaries were sufficiently safeguarded by the negotiating party during the contract negotiations: If there is no imbalance in bargaining power warranting protection, the protective purpose of the law governing general terms and conditions does not apply to the subsidiary.
The focus of the decision thus lies in the law of contracts for the benefit of third parties (Section 328 of the German Civil Code (BGB)).
Precedence of individual agreements – but not in every case
The effect of priority is not unlimited. The BGH places decisive emphasis on whether the interests of the beneficiary companies were sufficiently represented during contract negotiations. If this balance of interests is lacking, the reasoning cannot automatically apply.
Particularly in international corporate structures, the interests of individual subsidiaries often do not align with those of the parent company. Local regulatory requirements, differing liability risks, national market conditions, or specific procurement interests can lead to significant discrepancies.
Another aspect is particularly important here: The decision applies exclusively to individually negotiated contractual provisions. However, many framework agreements consist entirely or predominantly of pre-formulated contractual terms and thus constitute general terms and conditions in and of themselves. In such cases, the argument of the BGH regarding priority does not automatically apply. The question of the incorporation and validity of the respective clauses must then be assessed in accordance with the general rules of general terms and conditions law.
In practice, this means that anyone wishing to invoke the primacy of a contractual provision should not only document its individual negotiation but also ensure that the interests of the beneficiary group companies were actually taken into account in the negotiation process.
Special Attention to ERP Systems and Procurement Processes
The decision also highlights a problem that is commonly encountered in practice:
Purchases are automatically generated via ERP systems and often refer to standardized purchasing terms. At the same time, there are group-wide framework agreements with provisions that sometimes differ. If a dispute arises later, conflicts over the applicable contractual terms are often inevitable.
Companies should therefore review which contract documents their ERP systems use and whether purchasing terms conflict with existing framework agreements. Clear rules regarding the hierarchy of contractual documents can prevent future disputes over jurisdiction and liability.
Conclusion
The Federal Court of Justice (BGH) strengthens the reliability of global procurement structures and the primacy of individually negotiated framework agreement clauses.
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