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Contract Preparation Based on Templates

Lawyer Contract: Potential Pitfalls and How to Avoid Them

Law firms regularly use standardized law contracts to facilitate client processing and to provide clarity for the client. However, the case law of recent years shows that rigid wording and general framework agreements with clients, in particular with regard to agreed fees, entail the risk of falling back on statutory fees.

In the following, we explain what lawyers must pay attention to in practice in order to reduce risks associated with the ineffectiveness of agreements.

General mandate conditions must ensure transparency and discrimination

While it has now become standard for other professional professions to attach the General Terms and Conditions to all contract documents without exception, the lawyer is still a new publication as a user of general mandate conditions.

In addition, the special features of the combination of applicable professional law and the use of general mandate conditions regularly mean that agreeing effective terms and conditions in the lawyer contract is no easy task. This is also shown by the Cologne Regional Court of 24.1.2018, which deals intensively with terms and conditions in the mandate agreement and its effectiveness. In particular, content control in accordance with Section 307 of the German Civil Code was the pitfall for some of the ineffective clauses formulated.

The transparency requirement in accordance with Section 307 Paragraph 1 S. 2 BGB, according to which a clause becomes invalid if, from the point of view of a careful observer, it is not formulated clearly and comprehensibly. Effective wording of lawyer contracts must therefore be based in particular on the transparency requirement in accordance with Section 307 Paragraph 1 S. 2 BGB and Section 307 Paragraph 2 BGB Discrimination.

Fee agreement as a separate document

Even with regard to the fee agreement, there is always a connection with uncertainties as to whether one or the other regulation or the contract as a whole would stand up to judicial review.

Fee agreements are particularly necessary if the statutory fees do not represent an appropriate or cost-covering remuneration. Pursuant to Section 3 (1) BRAGO, the lawyer can only claim higher than the statutory remuneration if an express, written agreement with the client has been reached. The written form of Section 126 of the German Civil Code is therefore mandatory.

The written form that may not have been complied with can be cured by submitting an abstract acknowledgment of debt. For this purpose, it must be expressly stated for what reason and for which legal activity the client is prepared to pay the required fee. In practice, this means that every fee agreement should describe in detail for which activities the fee above the statutory remuneration is charged. The reference to the mandate agreement has proved its worth.

It is also known and important that the remuneration agreement is subject to the formal requirements of Section 3a Paragraph 1 Sentence 1 and 2 RVG. According to §3a RVG (1), an agreement on remuneration must be made at least in writing. The law is clear and states that a remuneration agreement must be referred to as a remuneration agreement or in a comparable manner, and must be clearly differentiated from other agreements with the exception of the award of an order.

The regulatory objective of RVG § 3a para. 1 is to clearly draw the client's attention to the remuneration agreement and in this way to protect against concluding a fee agreement unnoticed, which provides the lawyer with fee claims deviating from the statutory fee regulations on a contractual basis.

Case law does not regard a dedication to a separate paragraph, even if this is marked in bold and highlighted as a heading, as a sufficient distinction from the remaining provisions of a mandate agreement.

In practice, this means that, in addition to the mandate agreement, a separate fee agreement must be drawn up, the document title of which shows the character of an agreement regulating remuneration.

In principle, a remuneration agreement between lawyer and client that violates the formal requirements of Section 3a (1) sentences 1 and 2 RVG remains effective; the agreed remuneration can be claimed from it up to the amount of the statutory fee.

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