Service Contract Law
Under German law a Service Contract (Section 611 of the German Civil Code) is a reciprocal contract which is governed by the law of obligations under which one of the contracting parties (party obliged to perform servi-ces) agrees and obliges itself to render promised services, and the other contracting party (party entitled to performance of services) agrees and obliges itself to pay the agreed-upon remuneration. One of the significant sub-categories of service contracts is the employment contract. Our law offices are not only focussed on providing competent legal counselling on and handling of all aspects and all kinds of problems of labour law, but are also giving support in handling all those legal issues and matters which are part of the broader field of service contract law and which are not originally covered by or subject to the protective provisions of labour law, such as, for instance, the contractual relationships existing between the managing directors („Geschäftsführer“) of „GmbH“ companies, i.e. limited liablity companies under German law, and the “GmbH“ company itself, or between the managing boards of joint stock companies (‚Aktiengesellschaften“) and the joint stock company as such.
In this context it must be kept in mind that employment relationships of a „Geschäftsführer“ of a German limited liability company or of a member of the management board of a joint stock company are always characterized by two differently constituted legal relationships. This means to say that there is not only the interlocking relationship which is established by the appointment of the Managing Director/member of the Management Board, whereby the Managing Director of the „GmbH“ and/or the member of the Management Board of the joint stock company are assigned their specific rights and obligations which they have with regard to the company’s internal and external relationships, but also the contractual employment relationship which is governed by the employment relationship (= service contract) which constitutes the basis for the individual’s position or status within the respective executive body and which governs the parties’ mutual performance obligations , and more particularly the remuneration of the individual member of such body.
We provide counsel for and represent both companies and executive officers (GmbH „Geschäftsführer“, board members of joint stock companies) with respect to all questions, aspects and/or issues and problems of appointment us executive body (act of appointment, dismissal, adoption of resolutions) as well as on all aspects of the establishment, modification and termination of the service contract relationship which is governed by the German law of obligations.