A German court has recently ordered WhatsApp to use German language terms and conditions towards users in Germany (see also here, for example). Or, to be more precise, called upon by a German consumer protection agency the Kammergericht, the appellate court for the district of Berlin, has, amongst other things, decided that using English language terms and conditions for user agreements to be concluded between WhatsApp and users in Germany is in violation of a certain provision of the German Civil Code that demands there to be transparency when using pre-worded terms and conditions towards consumers. So, if you allow the pun, what’s up with that?
One of the more peculiar concepts of German contract law is that of our “Law on General Terms and Conditions”. In a nutshell, the idea is this: If, as a company, you work with standard terms and conditions, i.e. a set of contractual terms that you have in your proverbial drawer all drafted to best fit your particular interests and ready to pull out for every new customer you want to do business with, such terms and conditions are subject to the so-called “content control”. “Content control” (for lack of a better translation) means that the vast majority of the terms and conditions, as well thought-out as they may be, are only valid and able to shape the contractual relationship with your customer if they pass a test to the effect that the terms must not be “unreasonably disadvantageous” (i.e. overly unfair) for your client. The “official” translation of the term in section 307 (1) of the German Civil Code says in exemplary fashion:
“Provisions in standard business terms are ineffective if, contrary to the requirement of good faith, they unreasonably disadvantage the other party to the contract with the user. An unreasonable disadvantage may also arise from the provision not being clear and comprehensible.
Big words, obviously. The thinking behind them is that if one of the parties works with pre-drafted standard contract forms, there is a good chance that the other party is at a considerable disadvantage with regard to what the contractual relationship will look like in the end. That is most obviously true in B-to-C scenarios – like in the case before the Kammergericht cited above.
The courts have long understood section 307 (1) to, inter alia, mean that for a clause that forms part of standard terms and conditions to be valid and effective it must be worded in such a way that the contractual partner can clearly recognise and understand the rights and obligations that are to result from the clause, and that possible disadvantageous effects for the contractual partner become clear. In short terms, the courts require what they call “transparency”; the second sentence of the provision says as much, after all.
This as background, the question very obviously arises whether English language terms and conditions used in a contractual relationship with the consumer-user are transparent in that sense. Generally, there has been some consensus to the effect that one can only validly use English language terms and conditions if the recipient actually understands the language, if English is the language of the contract as a whole or if things language has in the past been usually used between the parties. Some, on the other hand, argue that English works if the company submitting the terms and conditions can reasonably expect the recipients/contractual partner to understand language. There has been very little jurisdiction in Germany on the question. Some minor courts had voiced their opinion to the effect that towards consumers English terms and conditions does not work). The district court of Munich on the other hand held in 2004 (brought about by JBB’s Till Jaeger, no less) that, when it comes to open source software licenses, the use of the English language in the license texts is valid and effective as, said the court, English is the lingua franca of the tech world.
The Kammergericht has now added to this, saying, in short, that WhatsApp directs its website at the general public of consumers living in Germany and communicates with them in German across the site (except for the terms and conditions, of course), even naming the link that leads to the English language terms and conditions in German (“Datenschutz und AGB”), and that, because of this, the consumer/user is not bound to expect to be directed to lengthy and complex English language terms and conditions. The court explained that, whereas skills in everyday, colloquial English may be fairly common in Germany, this does not apply to reading and understanding a document written in a commercial, legal/contractual language.
For the proceedings at hand, this lead to the court ordering WhatsApp to, in a nutshell, no longer use their standard English language terms and conditions when it does business with users in Germany. WhatsApp has not yet changed their terms and conditions, and it is not known whether they have filed a further appeal to the German Supreme Court. We will therefore have to see how everything turns out.
Generally , as a result of the “content control” companies are effectively restricted on what clauses they can use in their standard contracts with customers in Germany. Or, rather, if they use clauses that do not pass the test, the clauses are
- invalid and will not be applied to the contractual relationship; and
- are subject to coming under attack from their competitors (less likely, because they will mostly want to use the very same kind of clauses) or, as in the case before the Kammergericht, consumer protection institutions.