Who Is at Fault — the School or the Student?

"One must study a great deal to realise how little one knows."

Michel de Montaigne

Our law firm is often approached both by private individuals and by authorised representatives of legal entities. One of the important areas where professional legal support is needed concerns the conclusion and performance of contracts. In Germany, parties frequently resort to drafting contracts based on General Terms and Conditions for Business Transactions (German: Allgemeine Geschäftsbedingungen, AGB), especially where the deals in question are concluded over the internet.

AGB are terms formulated for use across numerous contracts, which one contracting party (the initiator of the contract, which may be the seller, the contractor performing an order, or the landlord) sets out for the other party (the counterparty, typically the buyer, the client, the customer, or the tenant) when the contract is concluded (§ 305 para. 1 Bürgerliches Gesetzbuch, BGB). The purpose of AGB is not only to standardise the content of the most common types of contract (sale and purchase, orders for the performance of works, letting and leasing of flats, and others), but also to fix the terms of contracts not otherwise regulated by legislation, such as finance-lease and factoring agreements. The main advantage of General Terms for the party that applies them (the initiator of the contract) is that they make that party's legal position more favourable than would otherwise be the case under the applicable law. That is precisely why General Terms and Conditions for commercial transactions are so widespread in civil-law dealings, particularly among companies and entrepreneurs operating in trade or the provision of services. As a rule, General Terms are used to regulate matters such as how the contract is concluded, the manner and place of its performance, the settlement procedure under the contract, retention as a means of securing performance of an obligation, the consumer's duties, the parties' liability, and the procedure for resolving disputes. The initiator's practical freedom to draft AGB is nevertheless subject to certain restrictions under §§ 307–309 BGB, designed to ensure that the contract remains sufficiently lawful while taking the client's interests into account. If provisions contained in a contract breach even one of the mandatory conditions listed in the above-mentioned sections of the BGB, such a contract may be declared invalid. Given the particular nature of companies that provide services on a regular basis, it is important to understand that the success of future dealings between the parties depends heavily on how carefully the standard-form contract put before that company's clients for signature has been drafted. Companies that sometimes attach little importance to the form of the contract used with their clients may run into unforeseen difficulties. For example, unpleasant surprises can arise regarding matters such as the place for resolving disputes under the contract, the procedure for amending and terminating it, and the particularities of interpreting the text where the contract has been drawn up in two different languages. It must be admitted that not every entrepreneur, let alone an ordinary layperson, stops to think about these nuances at the moment of drafting and signing a contract and actually taking on the corresponding contractual obligations. It is therefore advisable, when concluding any contract — and especially a long-term one — to study carefully the General Terms included in it, and to seek professional advice should any doubts arise as to their content. In this article, we would like to share one case from our varied legal practice and describe how we were able to help an entrepreneur protect his rights and legitimate interests.

The client who came to our firm was Leonid (name changed), who for many years had been the director of a company providing foreign-language tuition to clients at various levels. The company's office was located in one of central Berlin's districts, every single teacher was a "native speaker" with many years of professional experience, there was never any shortage of clients wishing to learn, and, it seemed, nothing pointed to any trouble ahead. However, one "fine day," a complaint requiring a carefully considered response landed on Leonid's desk. A client of the language school — let's call her Svetlana — complained about the quality of the tuition services she had received. She claimed that, although she had been studying for about six months, she had made no noticeable progress in her command of the language. Svetlana was particularly unhappy that the "native speaker" teacher was unable to explain the material clearly to a Russian-speaking student. In addition, the client was dissatisfied with the small number of tests administered during the course of study, as well as with the length of the lessons in the intensive course. According to her, after the third hour of lessons, even with breaks, she could no longer take in or retain the material. This student's main goal had been to pass the examination for a B1-level language certificate. She was convinced that, after completing this course, she would most likely fail that examination. Svetlana therefore demanded that the contract be terminated immediately and that the full amount she had paid under it be refunded. Leonid was, in principle, willing to meet the client halfway and refund her money. He was concerned, however, that this case might set a "precedent" — that is, that other students might, in theory, follow Svetlana's example. Refunding money to every student who wished it was certainly not part of his plans. Leonid remembered that General Terms had been included when the contract was drafted, but no one had paid particular attention to the specifics of that contract at the time. The business had been developing successfully, and any problems that arose with clients had almost always been resolved amicably. Unfortunately, in Svetlana's case, Leonid was unable to settle the matter on his own, and so he came to our law firm for professional legal assistance. An attorney specialising in resolving civil-law disputes immediately set about reviewing the terms of the contract that had been drawn up and preparing a response to the dissatisfied client's complaint.

So, we prepared a response to Svetlana's claim, putting forward the following arguments in defence of the language school. A fixed-term contract for the provision of services (covering the duration of the course in question) had been concluded between Svetlana and the language school headed by Leonid. Under the applicable AGB, Svetlana could only terminate such a fixed-term contract before the end of its term for good cause. In this case, tuition had been provided by a native-speaker teacher in accordance with the curriculum. Judging by the academic performance and successful test results of other students at the same school who studied with the same teacher, the quality of the services provided was at an appropriate level. The language school's obligation was precisely to provide quality group tuition to its students — by no means to guarantee that they would achieve any particular results or pass their examinations. Naturally, a student's aptitude for learning, ability to absorb material quickly, examination results, job-search outcomes, and other personal expectations did not fall within the school's competence or responsibility. Accordingly, the arguments put forward by Svetlana did not fall among the grounds on which a services contract could be terminated early.

Of course, we are fully aware that, notwithstanding our detailed and well-reasoned response, Svetlana is entitled to file a claim with the court. We informed our firm's client of this possible development. Should that happen, we will defend his rights and legitimate interests in court. Given that we hold a strong legal position in this case and have solid arguments to present to the court, we believe we have every chance of a successful outcome for our client should proceedings follow.

Pleased with the work we had carried out, and wishing to avoid similar mishaps in the future, the client also instructed us to review and improve the standard-form tuition-services contract offered to students. We went through every clause of that contract and helped to supplement the template so that our client's interests would be reliably protected going forward, while in no way breaching the principles of equality between the parties and fairness. In particular, in agreement with Leonid, we added a provision to the draft standard contract stating that a fixed-term tuition contract could be terminated at various points in time, even in the absence of good cause on the client's part. However, depending on exactly when such termination takes place, the amount to be refunded to the client is calculated accordingly. For example, if the contract is terminated one month after the start of a six-month course, the client is refunded 80% of the total amount. In this way, the contract, on the one hand, provides guarantees for students while, on the other hand, offering protection against abuse by clients.

On this positive note, all that remained was to say goodbye to Leonid and wish him success in all his business and personal endeavours. Our team of highly qualified professionals always stands ready to provide legal assistance, both in drafting significant contracts and during their performance, as well as in defending the infringed rights and legitimate interests of the parties involved.

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THE LAW FIRM REPRESENTS CLIENTS' INTERESTS THROUGHOUT GERMANY

Civil Law

All rights reserved. Copying or republishing this article requires a link to the original source.