The reference to the general terms and conditions in the order confirmation did not mean that the place of jurisdiction in Germany was agreed

Lawyer Anders Stig Vestergaard is a legal expert in international trade and transport, and is also the author of numerous articles.

The quarrel

The dispute is over whether the trial should be conducted in the court in Hilleroed, Denmark, or in the court in Stuttgart, Germany.

The process

A Danish company agreed to buy various motors for awnings with a German company. The engines were produced by the German company and delivered by them to the Danish company’s headquarters. Defects were found in the engines, which caused the Danish company to incur large additional costs by having to replace the defective engines. The Danish company then complained to the German company at the court in Hilleroed, asking for compensation for their loss.

The allegations of the plaintiff and the defendant

The plaintiff claimed that the case should be filed with the court in Hilleroed, cf. Retsplejelovens § 242, stk. 1, according to which the matter concerning the contractual relationship can be brought before the court where the obligation of the contract has been or is to be fulfilled. The defendant, the seller Gerhard Geiger GmbH & Co. KG, rejected the claim of the plaintiff, pointing out that the place of jurisdiction was the court in Stuttgart, cf. the general terms and conditions of the defendant. The defendant had referred to its terms and conditions in its order confirmation, and the terms contained a jurisdiction clause, according to which Stuttgart should be the place of jurisdiction.

The decision of Oestre Landsret

Denmark Oestre Landsret found that the reference from the seller to his general terms and conditions via a link in the order confirmation did not lead to a written agreement on jurisdiction in Germany. The regional court informed that it follows from the practice of the EU court that a choice of court agreement in terms and conditions meets the requirements if there is a signed contract that expressly refers to the terms and conditions. A jurisdiction clause in general terms and conditions, which is only referred to in the order confirmation or invoice issued by one party, cannot be considered to satisfy the claims for a written jurisdiction agreement, cf. practice of the EU court. The district court also found it not documented that there was a valid choice of court agreement based on the practice of the parties or international trade usage. On the basis of this, the district court determined that the place of jurisdiction was in Hilleroed.

The remarks

I note that it can therefore be assumed that it is not sufficient to refer to its general terms and conditions in the order confirmation or the invoice. It is important to note that if the choice of court agreement is to be legally valid, the choice of court agreement must be introduced in the signed contract, or the contract must expressly refer to the terms and conditions. In addition, it should be understood that a choice of court agreement may be valid if the parties have had a long-standing working relationship or if it follows international custom.