No individual agreement

In B2B contracts you often find pre-formulated clauses meant to establish an individually negotiated agreement.

Example

Individually negotiated agreement Even though the terms and conditions of this framework agreement are set for all future orders, by signing this framework agreement the parties expressly declare that, with the shared goal of efficient future cooperation, those terms and conditions have been freely and openly discussed, negotiated, and jointly agreed in detail as individually negotiated terms.

Example 2

The parties have negotiated all clauses of this confidentiality agreement after thorough discussion within the meaning of Section 305(1) sentence 3 BGB, so that an individually negotiated agreement is in place.

Legal assessment

The user of such clauses tries to establish an individually negotiated agreement so that the contractual terms escape the strict content review under the German rules on standard terms.

Under Section 305(1) sentence 3 BGB, terms do not qualify as standard terms to the extent they have been individually negotiated between the parties. Under the BGH’s settled case law, “individually negotiated” means that the user puts the core content of the clause that deviates from statutory default rules seriously up for discussion and grants the other party the freedom to shape it in line with its own interests. The other party must have a real opportunity to influence the substance of the clause. That is rarely actually the case.

The burden of pleading and proof that a clause has in fact been individually negotiated rests with the user. The standard for proving “individual negotiation” is high, and proof works clause by clause: where individual terms were amended, it does not follow that an unrelated clause was also seriously put up for discussion.¹

Offering a choice is not enough either. Giving the other party the pick between two pre-formulated variants is not yet individual negotiation; the other party must have the opportunity to put forward its own drafting proposals with an effective chance of prevailing.²

In the BGH’s view, a declaration drafted by the user and signed by the other party stating that all contractual terms have been individually negotiated has no probative value. It is neither proof of an individually negotiated agreement nor does it reverse the burden of proof.³

A template confirmation that the parties have supposedly negotiated each clause is also invalid under Section 309 No. 12 b) BGB.⁴ That holds in any event for such confirmations of individual negotiation also in B2B, because the concept of “individual negotiation” calls for a closer legal interpretation that few business operators are familiar with.

Finally, it is also incompatible with the protective purpose of Sections 305 et seq. BGB for parties to contract out of the rules on standard terms independently of the requirements of Section 305(1) sentence 3 BGB.

Summary

(Invalid) contract clauses have something in common with fashion: they keep coming back, sometimes only in new colors. The clauses discussed here, suggesting that the parties have individually negotiated each term, are not capable of establishing an individually negotiated agreement.

The route to an individually negotiated agreement is still open, but it takes a better strategy: negotiate for real and document it, instead of asserting it. A recent decision on a framework supply agreement shows that the effort pays. Where the terms were genuinely negotiated individually, they take priority over standard terms under Section 305b BGB – and they do so even vis-à-vis affiliated companies to which the framework agreement grants rights, provided those companies’ interests were safeguarded in the negotiations and they are not the weaker negotiating side.⁵ For group framework supply agreements this is the lever that matters: what carries is the negotiation actually conducted, not the confirmation clause.

Notes

1. BGH, order of 19 March 2019 – XI ZR 9/18. ↩

2. BGH, judgment of 13 March 2018 – XI ZR 291/16, decided on two loan variants offered to a consumer; the standard for individual negotiation under Section 305(1) sentence 3 BGB is the same between businesses. ↩

3. already BGH, judgment of 15 December 1976 – IV ZR 197/75; see also BGH, judgment of 20 March 2014 – VII ZR 248/13 in a more recent B2B case. ↩

4. BGH, judgment of 28 January 1987 – IVa ZR 173/85, on the former Section 11 No. 15 AGB-Gesetz. ↩

5. BGH, order of 20 November 2025 – I ZB 9/25. ↩

Reference: Poleacov, P. (2026). No individual agreement. INN.LAW. https://inn.law/en/perspectives/no-individual-agreement/

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