A party which accepts the other party’s standard terms is in

principle bound by them irrespective of whether or not it actually

knows their content in detail or fully understands their implications.

An important exception to this rule is, however, laid down in this

article which states that, notwithstanding its acceptance of the standard

terms as a whole, the adhering party is not bound by those terms which

by virtue of their content, language or presentation are of such a

character that it could not reasonably have expected them. The reason

for this exception is the desire to avoid a party which uses standard

terms taking undue advantage of its position by surreptitiously

attempting to impose terms on the other party which that party would

scarcely have accepted had it been aware of them. For other articles

intended to protect the economically weaker or less experienced party,

see Arts. 3.10 and 4.6.

A particular term contained in standard terms may come as a surprise

to the adhering party first by reason of its content. This is the case

whenever the content of the term in question is such that a reasonable

person of the same kind as the adhering party would not have expected it

in the type of standard terms involved. In determining whether or not a

term is unusual, regard must be had on the one hand to the terms which

are commonly to be found in standard terms generally used in the trade

sector concerned, and on the other to the individual negotiations between

the parties. Thus, for example, a term excluding or limiting the

contractual liability of the proponent may or may not be considered to be

“surprising”, and in consequence ineffective in a particular case, its

effectiveness depending on whether or not terms of that kind are

common in the trade sector concerned, and are consistent with the way

in which the parties conducted their negotiations.

69

I l l u s t r a t i o n

1. A, a travel agency, offers package tours for business trips.

The terms of the advertisement give the impression that A is acting

as a tour operator who undertakes full responsibility for the various

services comprising the package. B books a tour on the basis of A’s

standard terms. Notwithstanding B’s acceptance of the terms as a

whole, A may not rely on a term stating that, with respect to the

hotel accommodation, it is acting merely as an agent for the

hotelkeeper, and therefore declines any liability.

Other reasons for a particular term contained in standard terms

being surprising to the adhering party may be the language in which it

is couched, which may be obscure, or the way in which it is presented

typographically, for instance in minute print. In order to determine

whether or not this is the case, regard is to be had not so much to the

formulation and presentation commonly used in the type of standard

terms involved, but more to the professional skill and experience of

persons of the same kind as the adhering party. Thus, a particular

wording may be both obscure and clear at the same time, depending on

whether or not the adhering party belongs to the same professional

category as the party using the standard terms.

The language factor may also play an important role in the context

of international transactions. If the standard terms are drafted in a

foreign language it cannot be excluded that some of its terms, although

fairly clear in themselves, will turn out to be surprising for the

adhering party who could not reasonably have been expected fully to

appreciate all their implications.

I l l u s t r a t i o n s

2. A, an insurance company operating in country X, is an

affiliate of B, a company incorporated in country Y. A’s standard

terms comprise some 50 terms printed in small type. One of the

terms designates the law of country Y as the applicable law. Unless

this term is presented in bold letters or in any other way apt to

attract the attention of the adhering party, it will be without effect

since customers in country X would not reasonably expect to find a

choice-of-law clause designating a foreign law as the law governing

their contracts in the standard terms of a company operating in their

own country.

3. A, a commodity dealer operating in Hamburg, uses in its

contracts with its customers standard terms containing, among others,

a provision stating “Hamburg - Freundschaftliche Arbitrage”. In

local business circles this clause is normally understood as meaning

that possible disputes are to be submitted to a special arbitration

governed by particular rules of procedure of local origin. In contracts

with foreign customers this clause may be held to be ineffective,

notwithstanding the acceptance of the standard terms as a whole,

since a foreign customer cannot reasonably be expected to understand

its exact implications, and this irrespective of whether or not the

clause has been translated into its own language.

The risk of the adhering party being taken by surprise by the kind

of terms so far discussed clearly no longer exists if in a given case the

other party draws the adhering party’s attention to them and the

adhering party accepts them. The present article therefore provides that

a party may no longer rely on the “surprising” nature of a term in

order to challenge its effectiveness, once it has expressly accepted the

term.