Bürgerliches Gesetzbuch: Germany’s Civil Code, Structure, and Principles

The Bürgerliches Gesetzbuch, usually shortened to BGB, is Germany’s civil code and the main body of private law governing relationships between individuals: apartment leases, employment contracts, sales, marriage, divorce, inheritance, and everyday liability. It took effect on January 1, 1900, and has been amended many times since, most significantly in a 2002 overhaul that modernized its contract rules and pulled consumer protection directly into the code. It is written as a single interlocking system: general principles at the front feed into specialized rules deeper in the text, so no section stands entirely on its own.

How the Code Is Organized

The BGB uses the Pandectist structure, which places shared rules at the beginning and progressively narrows into specific topics. Book One, the General Part, covers sections 1 through 240 and sets out foundational concepts such as legal capacity, the formation of contracts, and time limits.¹ Front-loading these rules means the code does not have to restate them every time a specialized topic comes up.

The remaining four books each cover a distinct area of private law:

Book Two, Law of Obligations (sections 241–853): contracts, breach remedies, and tort liability.
Book Three, Property Law (sections 854–1296): ownership, possession, mortgages, and pledges.
Book Four, Family Law (sections 1297–1921): marriage, divorce, parental responsibility, and guardianship.
Book Five, Succession Law (sections 1922–2385): inheritance, wills, and compulsory shares for close relatives.

A dispute over a defective product, for example, pulls in both the general contract rules and the specific sales warranty rules. German lawyers call this the “bracket technique” because the general rules bracket around and inform every specialized provision. The practical effect for anyone reading the BGB is that a single section rarely gives the full answer; the general principles above it always shape its meaning.

Who Can Hold Rights and Enter Contracts

The General Part opens by defining who counts as a legal actor. Section 1 provides that every natural person gains legal capacity at birth.¹ That capacity, meaning the ability to own property, enter contracts, and sue, lasts until death and cannot be taken away.

The ability to actually enter into binding transactions (Geschäftsfähigkeit) is treated separately, based on age. Sections 104 through 113 draw the lines. Children under seven cannot enter any legal transaction at all, and any declaration they make is void.¹ Minors from seven through seventeen have limited capacity, and most of their transactions need parental consent to take effect. Full capacity begins at eighteen.

Organizations can also hold rights. Sections 21 through 79 govern juridical persons such as registered associations (Vereine) and foundations, giving them the ability to own property, enter contracts, and be sued in their own name.¹

Contracts, Breach, and Civil Wrongs

Book Two, the Law of Obligations (Schuldrecht), is the largest part of the code. Section 241 states the basic idea: an obligation gives one party (the creditor) the right to demand performance from the other (the debtor), whether that means a payment, a delivery, or refraining from a certain action.¹

The code then standardizes the most common contracts. A sales contract under section 433 obliges the seller to deliver the goods and transfer ownership, while the buyer pays the agreed price and accepts delivery. Section 434 requires that the goods be free from material defects, meaning the item must match what the parties agreed and be suitable for its customary use. Lease agreements under section 535 require the landlord to keep the property usable throughout the term and the tenant to pay the agreed rent.¹

When something goes wrong, the BGB’s default remedy is restoration rather than a check. Section 249 makes the person liable put the injured party back into the position they would have been in without the breach.¹ Monetary compensation becomes available when restoration is impossible or would cost a disproportionate amount. For injuries to a person or damage to a physical object, the injured party can demand the necessary repair costs in money rather than wait for the liable party to arrange the fix. The 2002 Schuldrechtsmodernisierung unified the previously scattered rules on breach and brought consumer protection directly into the BGB.

Civil wrongs outside of contracts sit in section 823: anyone who intentionally or negligently injures another person’s life, health, freedom, property, or other protected rights must compensate the victim.¹ The same restoration-first principle applies. German law does not recognize punitive damages the way common-law countries do.

Property and the Abstraction Principle

Book Three governs the relationship between people and physical objects. The code draws a sharp line between possession (Besitz), which is actual control of a thing, and ownership (Eigentum), which is the legal right to use and dispose of it. A tenant possesses an apartment; the landlord owns it. Both are protected, but through different rules.

Transferring ownership of a movable item requires two elements: an agreement between the parties that ownership should pass, and physical delivery. Section 929 states this directly.¹ If the buyer already holds the item, the agreement alone suffices. Land and buildings are more formal: ownership passes only when both parties agree and the transfer is entered in the land register (Grundbuch), a public record of every change in title.

The distinctive feature here is the abstraction principle (Abstraktionsprinzip). Most legal systems treat the sales contract and the transfer of ownership as a single package, so that if the contract fails the transfer fails with it. German law separates them into two independent legal acts. The sales contract under section 433 creates an obligation to transfer; the transfer itself under section 929 is a separate “real agreement” that stands on its own. If the underlying sales contract turns out to be invalid, the buyer may still have legally acquired ownership. The seller’s remedy in that case is a claim for unjust enrichment to get the item back, not an automatic reversal of title. The trade-off is greater certainty in chain transactions where goods pass through multiple hands.

Family Law and Inheritance

Book Four covers marriage, divorce, parental responsibility, and guardianship. It sets the requirements for a valid marriage, the financial obligations spouses owe each other during and after the relationship, and rules on parental care that consistently prioritize the child’s welfare. Guardianship provisions apply when a minor has no parent able to exercise parental responsibility.

Book Five works on a principle that surprises many people from common-law backgrounds. When someone dies, the entire legal position (assets and liabilities) passes automatically and immediately to the heir or heirs. There is no probate process that first gathers assets into an estate. The heir steps into the deceased’s shoes at the moment of death, inheriting debts along with property. If there is no will, the code sets out a hierarchy based on kinship.

German law also does not allow full disinheritance of close family. If a will cuts out a descendant, parent, or spouse, that person can claim a compulsory share (Pflichtteil) equal to half the value of what they would have received under the default intestacy rules.² It is a monetary claim against the heirs, not a right to specific items from the estate. A parent’s claim is excluded when a descendant of the deceased already qualifies.

Consumer Protection Inside the Code

Since 2002, the BGB itself has held the main rules protecting consumers in their dealings with businesses. Under section 13, a consumer is any natural person entering a transaction for purposes mainly outside their trade or profession, and under section 14, a trader is anyone acting in the course of a trade or business.¹

Standard Business Terms

The BGB is skeptical of pre-printed terms. Section 305 defines standard business terms as any contract terms pre-drafted for use in more than two contracts and presented on a take-it-or-leave-it basis. Individually negotiated terms do not count.¹ To become part of the contract at all, the business must clearly point them out before the contract is concluded and give the other party a reasonable opportunity to read them. Fine print that no one could realistically review does not bind the customer.

Even when properly incorporated, standard terms are invalid if they unreasonably disadvantage the other party. Sections 308 and 309 list specific clause types that are automatically void, including unreasonably long deadlines for the business to perform and clauses that shift the burden of proof to the consumer’s disadvantage. The regime applies with full force to consumer contracts and with somewhat relaxed standards between businesses.

The 14-Day Withdrawal Right

For consumer contracts concluded at a distance (online purchases) or outside the trader’s business premises, section 355 gives the consumer a fourteen-day withdrawal period. The consumer can cancel without giving a reason; sending the notice before the deadline is enough.¹ For physical goods, the clock typically starts when the consumer receives the item, not when the order is placed. Once withdrawn, both sides return what they received without unnecessary delay, and the trader bears the risk of the return shipment.

How Long Claims Last

Claims under the BGB do not last forever. The standard limitation period is three years under section 195. What makes the German rule distinctive is when the clock starts. Under section 199, the three-year period begins at the end of the calendar year in which two conditions are both met: the claim has arisen, and the claimant either learned of the relevant facts and the identity of the person responsible or would have learned of them without gross negligence.¹ If you never discover who caused your loss, the three-year clock never starts, though backstop periods stop claims from lingering indefinitely:

Personal injury claims (life, health, bodily integrity, liberty): barred 30 years after the act that caused the harm, whether or not the victim knew.
Other damage claims: barred 10 years after the claim arose, or 30 years after the harmful act, whichever comes first.
All other claims: barred 10 years after they arise.

When the BGB Applies Across Borders

The BGB does not automatically govern every dispute that involves a German party. When a legal relationship crosses national borders, the Introductory Act to the Civil Code (EGBGB) and EU regulations decide which country’s law applies. For contracts, the EU’s Rome I Regulation generally lets the parties choose the applicable law and, absent a choice, points to the country most closely connected to the contract. For non-contractual claims such as tort, the Rome II Regulation typically applies the law of the country where the damage occurred. The EGBGB fills gaps where no EU regulation or treaty governs.³

Questions of personal status (legal capacity, names, marriage requirements) are generally tied to nationality. A person’s legal capacity follows the law of their home country, and once acquired, that capacity is not lost simply by moving to Germany or gaining German citizenship. For someone holding dual nationality that includes German, German law prevails on these personal-status questions.³ A safety valve runs through the whole system: foreign law will not be applied if the result would be manifestly incompatible with fundamental principles of German law, including basic civil rights.

Two Principles Behind Everything

Private autonomy is the BGB’s default. Individuals are free to enter, shape, and end legal relationships as they see fit. The code supplies extensive default rules (what happens when a lease is silent on repairs, for instance), but parties can agree on different terms. That freedom has limits. Section 138 declares void any transaction that violates good morals, with a specific rule targeting exploitative bargains in which one party takes advantage of another’s desperation, inexperience, or impaired judgment to extract grossly disproportionate benefits. The consumer protection rules impose further boundaries when the parties are not on equal footing.

Section 242 then requires every debtor to perform their obligations in accordance with good faith, taking customary practice into account.¹ What reads like a narrow instruction has been treated by German courts as one of the broadest principles in all of private law. Courts use it to fill gaps in contracts, block the abusive exercise of rights, and adjust obligations when circumstances change so dramatically that holding a party to the original terms would be unconscionable. More than a century of case law has built section 242 into a flexible tool that lets the BGB reach situations its drafters never anticipated.

1
Gesetze im Internet. German Civil Code – Bürgerliches Gesetzbuch
2
Gesetze im Internet. German Civil Code – Bürgerliches Gesetzbuch
3
Gesetze im Internet. Introductory Act to the Civil Code – EGBGB