The Bavarian Supreme Court (BayObLG) has dealt with the validity of the following jurisdiction clause contained in general terms and conditions in a contract between two entrepreneurs(BayObLG, decision of 26.10.2021 - 101 AR 148/21):

"The exclusive place of jurisdiction for all disputes arising from this contract is Stuttgart, to the extent permitted by law."

The BayObLG considers this clause to be invalid. Unlike the two courts of the lower instance, however, it did not deal with the relevant ZPO provisions (in particular Section 38 ZPO), but found the clause to be invalid due to a breach of the requirement of transparency under general terms and conditions law (Section 307 (1) sentence 2 BGB).

First of all, the court points out that the contractual text in which the jurisdiction clause is embedded already has the character of a form used by the plaintiff according to its external appearance, but also according to its content, and thus constitutes general terms and conditions.

The court considers the jurisdiction clause - also in commercial legal transactions - to be non-transparent due to the addition "to the extent permitted by law", which leads to the invalidity of this clause.

It has not yet been decided by the highest court whether a severability clause in general terms and conditions can exceptionally be considered effective if the legal situation is doubtful or if the user should be spared the need to formulate exceptions for exceptional circumstances in the interest of clarity of the clause. If, on the other hand, the legal situation for which a provision is to be made in general terms and conditions is clear and the question of clarity is not relevant to this provision, severability clauses in general terms and conditions - even in business transactions - cannot be effectively agreed. In this situation, the user should rather be required to provide a clear version of his general terms and conditions. He cannot leave it to the courts to limit a clause that has been drafted in a general and careless manner to the extent permitted by law and thus give it a specific content in the first place; however, this is what the use of a severability clause amounts to.

The court's opinion is correct and not surprising. The BGH had already ruled in 1995 (BGH, judgment of 12.10.1995 - I ZR 172/93) and in 2012(BGH, decision of 20.11.2012 - VIII ZR 137/12) that severability clauses of the type "to the extent permitted by law" cannot be effectively agreed in general terms and conditions if the legal situation is not seriously in doubt. In this context, the prohibition of reduction in order to preserve validity must also be observed, according to which it is the risk of the GTC user if the clause is not clear and comprehensible. It is not the task of the courts to limit the clause to what is legally permissible.

Practical advice from the user's perspective

Avoid the addition "to the extent permitted by law" in your pre-formulated contract clauses, especially in the jurisdiction clause. This addition does not provide any certainty but, on the contrary, renders the clause ineffective. Of course, this also applies to similar additions such as "insofar as there are no mandatory provisions to the contrary", "unless the law prescribes otherwise", etc.

Practical advice from the perspective of the contractual partner

You have a convincing argument for the invalidity of the clause and can use this knowledge tactically in the event of a dispute.

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