A comparison of english and german contract law

Contracts are part and parcel of our daily activities; they are basically agreements that people make, a fulfillment of which will benefit the two parties. The most common contracts that people make are either implied or oral. They may not have a legal binding where one party can sue the other for breaching to perform it.

However, there are serious agreements that are made between parties which require a legal binding to protect them just incase a complication arises. The law of contract may have different meanings and implications depending on the country of implementations. However, the process of the contract is the same where two parties agree on doing something and thereafter accompanying their words by the action of performing the task.


A contract can be defined as an agreement between two or more people to perform a certain task. A contract may take different forms depending on the parties that are entering into it. A contract may therefore be written, verbal or implied. The best and common form of contract that takes place in our day to day life is that of buying and selling (Zumbansen, 2005). The buyer will look at the commodity while the seller will persuade him to buy it by explaining about the satisfaction derived from consuming the product.

Once he buyer is convinced about the product he or she agrees to the terms and as an evidence of his liking, he or she gives the seller an amount equal to the commodity. A contract is therefore termed as complete when the seller receives the price and the buyer the commodity. There are some distinctions and similarities on how the German and the English law consider the law of contract.

The German Contract Law

The German contract law was basically formed from the Bürgerliches Gesetzbuch abbreviated as BGB. This is the civil code that was developed in 1881 and became effective in 1900. The German contract act was passed in 1982 but the BGB remained to be the unification law of the entire land. The German law has gone through many amendments since its implementation but the major ones were done in 2002.

The law of obligation which forms part of the BGB’s five main parts was reformed. The law of obligation, which is found from sections 241 to 853, is one of the five major parts of the German law that deals with various forms of contracts (Beale, 2002). There are several principles in the German law that helps to define different contracts.

First, we have the principle of separation which differentiates between obligatory contracts and those that occur on the actual transfer of property. The principle generally means that an individual who has the responsibility of transferring ownership of a certain property does not guarantee him/her ownership of such property; he/she simply has the right to demand that the property be transferred to the right person.

Another important principle is the principle of separation. This principle differentiates between the contract of transfer of property and the actual process of transferring such property. The principle requires that the rules stated by the owner should be strictly followed and treated separately.

The principle of abstraction states that when the ownership of a property is transferred it is legally valid even if the obligatory contract is invalid. It is therefore clear that a mere obligation to transfer a certain property does not guarantee the transfer of such; it is the action of transfer that determines its validity. The two contracts are independent and follow separate rules as per the owner of the property.