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Last update: 15-03-2007
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Applicable law - Germany

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TABLE OF CONTENTS

I. Sources of the rules in force I.
I.1. National rules I.1.
I.2. Multilateral international conventions I.2.
I.3. Bilateral conventions I.3.
II. Implement of conflict-of-laws rules II.
II.1. Obligation of the judge to apply conflict-of-laws rules on his/her own initiative? II.1.
II.2. Renvoi II.2.
II.3. Change of connecting factor II.3.
II.4. Exceptions to the normal application of the conflict rules II.4.
II.5. Proof of foreign law II.5.
III. Conflict-of-laws rules III.
III.1. Contractual obligations III.1.
III.2. Non-contractual obligations III.2.
III.3. Personal status III.3.
III.4. Parentage, relationship between parents and children, including adoption III.4.
III.5. Marriage, partnership, divorce, maintenance III.5.
III.6. Matrimonial property regime III.6.
III.7. Succession, wills III.7.
III.8. Real rights III.8.
III.9. Insolvency III.9.

 

Disclaimer

The accuracy of the following statements is not guaranteed. They cannot and should not replace legal advice in specific cases.

The purpose of the statements is merely to provide some basic information about German private international law. That is the purpose for which approval is given for use in the EJN. Any further use of the statements must first be agreed with the Federal Ministry of Justice of the Federal Republic of Germany.

I. Sources of the rules in force

I.1. National rules

The principal source of German private international law is the Einführungsgesetz zum Bürgerlichen Gesetzbuche (EGBGB - Civil Code (Introduction) Act), in particular Sections 3 to 46. However, according to section 3(2) of the EGBGB, rules laid down in legislative acts of the European Communities and international conventions that are directly applicable in national law take precedence over the terms of this Act in their fields of application.

German law also contains scattered conflict-of-laws provisions elsewhere than in the EGBGB, for example in the Insolvenzordnung (InsO - Insolvency regulation) and the Einführungsgesetz zum Versicherungsvertragsgesetz (EGVVG - Insurance Contracts (Introduction) Act).

In those fields which are not determined by law, e.g. matters of international company law, the law to be applied is determined by the courts. 

I.2. Multilateral international conventions

There is an enumeration of all multilateral agreements signed and ratified by Germany in Directory B of the Bundesgesetzblatt (on-line orders via www.bundesgesetzblatt.de Deutsch). This list of multilateral state treaties also includes those containing unified conflict-of-laws provisions.

Multilateral conventions of this type are often initiated by international organisations. In this connection, particular note should be taken of the Hague Conference on Private International Law (www.hcch.net). Similarly UNCITRAL (uncitral@uncitral.org) and UNIDROIT (info@unidroit.org), both of which are organisations dealing with the standardisation of international law and the legal framing of world trade, contribute to the development of conflict-of-laws provisions. Germany is active in all three organisations.

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I.3. Bilateral conventions

Provisions on the conflict of laws are also to be found in bilateral state treaties. Germany's agreements with other states are likewise to be found in Directory B of the Bundesgesetzblatt.

II. Implement of conflict-of-laws rules

II.1. Obligation of the judge to apply conflict-of-laws rules on his/her own initiative?

German private international law is of importance not only in judicial disputes. Business partners in different states need to know what law will govern their contract irrespective of any future legal dispute. Their rights and obligations are determined on that basis. Car drivers travelling on holiday to another state have to be aware of the law under which they are liable if they cause an accident there. This determines the nature and magnitude of the compensation.

A German court called on to settle a dispute in circumstances which indicate a connection to the law of another state has to determine the law to be applied, by reference to its own conflict-of-laws provisions. The German judge has to be familiar with the rules of German private international law and must apply them ex officio. There is no choice available.

II.2. Renvoi

Renvoi is basically governed by section 4 EGBGB. If the foreign law refers back to German law, the German substantive provisions have to be applied.

Where the German conflict-of-laws provisions permit a choice as to the law to be applied, that choice relates only to the substantive provisions.

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II.3. Change of connecting factor

A change in the applicable law (for "unresolved" situations) is a phenomenon familiar to German law. For example, rights in rem are basically assessed according to the law of the location of the property, so that an item can come to be governed by a different legal order when its location changes.

However, a change of connecting factor is also accepted in other areas of law, one example being a change of nationality.

No change in the applicable law can take place if the conflict-of-laws provision stipulates a specific time of connection. For example reference is made to the nationality of the testator at the time of death in order to determine the inheritance law to be applied (see point 3.7).

II.4. Exceptions to the normal application of the conflict rules

A German court must apply mandators provisions of German law even where German conflict-of-laws rules themselves require the law of another State to be applied. Neither the case-law nor the literature provides definitive guidance as to whether, how and to what extent mandatory provisions of foreign law have to be obeyed in Germany in instances where German law has to be applied to the facts of the case.

Section 6 EGBGB enshrines the German reservation relating to public order. Foreign legal provisions must be disapplied where their application would be patently incompatible with fundamental principles of German law. "Fundamental principles" is taken to mean that fundamental principles of justice have to be at stake. Generally, this means serious violations of fundamental rights guaranteed in the German constitution. A further consideration important for the applicability of the ordre public reservation is whether the facts of the case reveal a domestic connection; only then will German law usually be actively relevant.

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II.5. Proof of foreign law

Not only do the German courts have to apply their own conflict-of-laws provisions ex officio but according to § 293 of the Zivilprozessordnung (ZPO - Code of Civil Procedure) they are also obliged to establish the content of the foreign law to be applied by means of a judicial procedure based on the discretion and decision-making powers at their disposal. Courts may avail themselves of the cooperation of the parties but are not bound by their pleadings.

III. Conflict-of-laws rules

III.1. Contractual obligations

The terms of the 1980 Rome Convention on the law applicable to contractual obligations have been incorporated into German law as Sections 27 et seq. of the EGBGB. Sections 7 to 14 of the EGVVG contain special conflict rules for specific insurance contracts.

Contractual compensation claims are governed primarily by the law chosen by the parties (section 27 EGBGB).

However, the right to choose the applicable law is limited for example where the facts are purely domestic, i.e. where the cross-border element is lacking. In this case, apart from the choice of law, the mandatory provisions of the law connected to the facts remain applicable. In the case of consumer contracts, the choice of law must not result in more favourable mandatory protection provisions of the consumer's country of residence being superseded.

In principle, where a choice of law is made, the entire contract is subject to the law chosen. The parties may, however, make a choice of law in respect of only a part of the contract terms, while the law otherwise to be applied is determined objectively.

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If no choice of law is made, the law to be applied is determined by reference to objective connecting factors. Section 28 EGBGB requires the law with which the contract is most closely connected to be applied. Normally this will be the law of the state in which the party who is to effect the performance which is characteristic of the contract has his habitual or principal residence. Nonetheless an overall examination of all the circumstances may reveal that the contract exceptionally displays even closer connections to another legal system, in which case it is the latter that has to be applied.

Special rules apply to real estate, transport, employment and consumer contracts.

III.2. Non-contractual obligations

Section 38 EGBGB lays down differentiated  rules on the law to be applied in respect of claims based on unjust enrichment. Claims for compensation for services rendered are subject to the law applicable to performance-based legal relationships. Claims for compensation on grounds of unjustified intrusion in a protected interest are governed by the law of the state in which the intrusion occurred. In other cases the law of the place where the benefit was obtained applies.

Under section 39 EGBGB, legal claims arising from  the performance of third-party transactions are governed by the law of the state in which the transaction was conducted. Special rules exist for the settlement of a third-party debt.

Under section 40 EGBGB claims to damages arising from an awful act are basically governed by the law of the place where that act occurred. The injured party may, however, require the law of that state in which the violation of legal interests occurred to be applied. If, at the time when the event giving rise to liability occurred, the person liable and the injured party had their habitual place of residence in the same state, the law of that state will be applicable by way of special connecting factor.

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Section 42 EGBGB provides that the parties may  choose the law to be applied after the fact in all cases.

Under section 41 EGBGB the applicable law can also be supplanted by a law which, in the light of particular circumstances, is substantially more closely connected to the facts of the case.

Finally, as a special public order regulation, section 40(3) restricts the scope of the enforcement of claims arising from unlawful acts.

III.3. Personal status

Under German private international law, legal questions raised by the personal legal status of a natural person are governed by the law of the state to which the nationality of the person refers.

Where a person has more than one nationality, section 5(1), first subparagraph EGBGB stipulates that reference must be made to what is known as the effective nationality, i.e. the nationality of the state with which the multiple national is most closely connected. If, by contrast, a person with multiple nationality also has German nationality, section 5(1) second subparagraph provides that this nationality alone shall apply.

The nationality criterion is applicable as regards the right to bear a name (for details see section 10 EGBGB) and the legal capacity of natural persons.

III.4. Parentage, relationship between parents and children, including adoption

Under section 19 EGBGB, the parentage of a child is subject primarily to the law of the state in which the child is habitually resident. No distinction is made between children born in and out of wedlock. In the relationship to each parent the parentage can be determined also under the parent's national law. If the mother is married, the family law by which she was governed at the time of the birth may ultimately also acquire significance in the matter of determining parentage. Different rules apply to children born before 1.7.1998.

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Under section 20 EGBGB, challenges to parentage are governed generally by the law under which the circumstances of the parentage arose and, where a challenge is brought by the child, by the law applying in the place where the child is habitually resident.

Under section 21 EGBGB, parental responsibility is determined according to the law applying in the place where the child is habitually resident, insofar as the 1961 Convention on the protection of minors does not come into play. According to that convention, it is the national law of the child that applies to certain aspects.

Under section 22 EGBGB, the effectiveness of an adoption is determined fundamentally by the national law of the adopting party at the time of the adoption. Adoption by (one or both) spouses is subject to the law governing the general effects of marriage. Spouses of different nationalities may therefore also adopt a child under the law of the state in which they are both habitually resident. Under section 23 EGBGB it is basically the national law of the child that applies as regards the consent of the child and its natural parents to the adoption.

Recognition of foreign adoptions and establishment of the effectiveness of foreign adoptions are governed by the Act on the effects of adoptions under foreign law.

III.5. Marriage, partnership, divorce, maintenance

Under section 13 EGBGB, the  requirements for the conclusion of a marriage contract are those laid down in the law of the state of which the person engaged to be married is a national. But in special circumstances, German law may be applied instead.

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In Germany a contract of marriage may be concluded only in the presence of the registrar or exceptionally of a person specifically so empowered by a foreign state (section 13(3) EGBGB).

Under section 14 EGBGB, the general effects of marriage are governed primarily by the law of the state of which both spouses are nationals, i.e. their shared national law.

If the spouses are not covered by the same national law, the law applicable in their shared habitual place of residence is applied.

A limited choice of law is available under section 14(3) EGBGB.

Under section 17 EGBGB, divorce is generally governed by the law which, at the time of filing for divorce, was decisive for the general effects of marriage, in other words the legal status of the family while legal proceedings are pending. In Germany a marriage can be dissolved only by the courts.

German law governs the usufruct of a marital home and household effects located in Germany.

Under section 17(3) EGBGB, the law applicable to sharing pension entitlements is determined by the divorce law. In certain circumstances where pension sharing law is not recognised by the foreign law, it will alternatively be implemented in accordance with German law if the parties so request.

Under section 18 EGBGB, which incorporates the rules of the 1973 Hague Convention on the law applicable to maintenance obligations, maintenance claims between relatives or between spouses are governed by the law of the State in which the person entitled to maintenance is habitually resident.

If exceptionally no entitlement to maintenance is conferred by the law of the place where the person entitled to maintenance is habitually resident, the shared national law of the parties may be applied. Should this law similarly be of no avail, the law of the state before whose court the claim for maintenance was made is to be applied instead.

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Registered partnerships are governed by section 17b EGBGB.

III.6. Matrimonial property regime

Under section 15 EGBGB, the matrimonial property regime is governed by the law applicable to the general effects of marriage at the time when the marriage was contracted. Spouses who are both nationals of the same state at that time are subject to the property regime of the shared state of nationality. Where the spouses are of different nationalities, the law of the state in which both spouses have their habitual place of residence at the time when the marriage contract is concluded applies.

Under section 15(2) EGBGB persons entering into a marriage contract have a limited choice of property regime.

III.7. Succession, wills

Under section 25 EGBGB, inheritance matters are governed by the law of the country of which the testator was a national upon his decease. German law may be chosen for land situated in Germany.

Under section 26 EGBGB, which incorporates the main conflict-of-laws provisions of the 1961 Hague Convention on the law applicable to the form of testamentary dispositions, a will is valid in form if its form satisfies the requirements of a legal system a connection to which exists by virtue of nationality, the habitual residence of the testator or the place where the will was made.

III.8. Real rights

Under section 43 EGBGB rights in rem are fundamentally governed by the law of the state in which the property is situated. The local law, for example, governs the content of property and the way in which the property can be transferred or burdened with a lien.

As regards vehicles, section 45 EGBGB provides for a special connection.

The removal of an item from one state to another is also subject to special provisions laid down in section 43(2) EGBGB.

Lastly land emissions are also dealt with separately by section 44 EGBGB.

A choice of law as regards rights in rem is basically excluded. However, under section 46 EGBGB, the law determined by reference to the aforesaid connecting factors may be derogated from if the facts show a substantially closer connection to the law of another state.

III.9. Insolvency

Section 335 of the Insolvency Act provides that the insolvency procedure and its consequences are basically governed by the law of the state in which the procedure was begun. Sections 336 et seq. of the Insolvency Act define special connecting factors concerning specific aspects of international insolvency law (e.g. working conditions, offsetting, challenges), which may deviate from this principle.

Further information

The Federal Ministry of Justice brochure on the subject of private international law can be found at http://www.bmj.bund.de/.

« Applicable law - General information | Germany - General information »

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Last update: 15-03-2007

 
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