Usual remuneration

Definition and legal basis

The customary remuneration is a central legal institution in German contract law, which is anchored in Section 612 and Section 632 of the German Civil Code (BGB). It describes the remuneration that is generally accepted by the parties involved for a comparable service at the time the contract is concluded at the place where the service is provided. In legal terms, the customary remuneration serves as a catch-all provision if no explicit remuneration agreement has been made. It ensures that services do not have to be provided free of charge if remuneration is to be expected under the circumstances. It is determined by taking into account industry-specific, regional and time-related factors.

Determination and determination criteria

The usual remuneration is determined according to several criteria. Industry standards, regional characteristics and comparable services at the time the contract is concluded are essential. Collective agreements, industry guidelines and market practices serve as a frame of reference. Factors such as qualifications, scope of services and economic conditions are taken into account in the assessment. Case law examines on a case-by-case basis whether remuneration complies with the principles of good faith. If there is no tax-based remuneration, the usual remuneration is deemed to have been agreed.

Legal effects and areas of application

Customary remuneration is used in various types of contracts, in particular in the law on contracts for work and services, service contracts and employment contracts. In the law on contracts for work and services in accordance with Section 632 BGB, it applies as a catch-all provision in the absence of a remuneration agreement. In service contract law in accordance with Section 612 BGB, it ensures appropriate remuneration for services. The customary remuneration is of particular importance in the case of acts of courtesy and unclear contractual relationships. It prevents services from having to be provided free of charge. Case law is continuously developing criteria for determining what is customary.

Digital transformation and remuneration models

Digital technologies are changing traditional remuneration models. Blockchain and smart contracts enable new forms of performance evaluation. Artificial intelligence can develop objective evaluation criteria. International business relationships require flexible remuneration concepts. Jurisprudence must continuously adapt to technological innovations. New forms of work such as crowdworking are calling traditional remuneration models into question.

Future prospects

The development of standard remuneration is characterized by technological and social changes. Interdisciplinary approaches are required in order to develop fair remuneration models. The legal profession faces the challenge of adapting traditional concepts to new forms of work and business.