📄 Contract law and dunning
In brief
If a customer does not pay an invoice that is due, under certain conditions they fall into default automatically or through a reminder (§ 286 BGB) – from that point you can demand default interest and a flat fee. If the customer also does not react to an out-of-court reminder letter, the court dunning procedure (gerichtliches Mahnverfahren) is open to you (§§ 688 ff. ZPO), a simplified, usually electronic procedure without an oral hearing. Important: claims normally become time-barred after three years (§ 195 BGB) – the period only starts at the end of the year in which you became aware of the claim and the debtor (§ 199 para. 1 BGB).
Step by step
- Set payment termsSet clear payment terms in the contract or the general terms and conditions (due date, payment term, possibly cash discount).
- Issue the invoiceIssue the invoice with a clear due date.
- Send an out-of-court reminderIf payment is not made, send a reminder letter – there is no statutorily prescribed number of reminders, default can also occur without a reminder.
- Apply for a payment orderIf payment is still not made, apply for a payment order (Mahnbescheid) from the responsible, usually central dunning court (§ 689 ZPO), as a rule online via the automated dunning procedure.
- Apply for an enforcement orderIf the debtor does not object within the objection period (§ 692 ZPO), apply for the enforcement order (Vollstreckungsbescheid, § 699 ZPO).
- Initiate enforcementWith a legally effective enforcement order you initiate enforcement, for example via a bailiff or attachment of a bank account.
Deadlines
- The misconception that “three reminders” are legally required before legal steps are possible is widespread – there is no such legal requirement; depending on the contract design, default can also occur entirely without a reminder.
- An enforcement order must not be applied for before the objection period has expired – that is inadmissible.
- Limitation is often overlooked: claims from transactions further in the past lose their court enforceability without a timely measure suspending limitation (e.g. a payment order).
- An unclear cash discount clause in the general terms and conditions can lead to disputes about the actual due date.
- Due date and payment term are confused: “payable within 14 days” is not an automatic requirement for default – without an additional reminder or a date fixed by the calendar, default may only occur after the 30-day rule.
- The responsible dunning court is often addressed wrongly: in principle the local court (Amtsgericht) at the applicant's general place of jurisdiction is responsible – many federal states have designated central dunning courts for several local court districts.
In depth · legal basis, figures and practice – for advisers and professionals
Contract design and general terms and conditions
Important components of a contract are the description of services, prices, payment terms (due date, payment term, cash discount), retention of title, warranty and termination rules. General terms and conditions are subject to content control under §§ 305 ff. BGB; surprising or unreasonably disadvantageous clauses are ineffective.
Default (§ 286 BGB)
Default in principle requires a due claim, non-performance and a reminder. A reminder is unnecessary where the time of performance is fixed by the calendar, where there is a period calculable by the calendar after an event, where there is a serious or final refusal to perform or for special reasons. For monetary claims, default occurs automatically at the latest 30 days after the due date and receipt of the invoice – the central provision for B2B dunning.
Court dunning procedure (§§ 688 ff. ZPO)
The purpose is a quick, low-cost way to obtain an enforceable title without an oral hearing for monetary claims presumed to be undisputed. The sequence: payment order, if no objection is made within two weeks an enforcement order, then enforcement. If the debtor objects, the procedure moves on application into the contested lawsuit procedure. A central, automated dunning court in each federal state is responsible.
Out-of-court dunning
There is no legal obligation to send a particular number of reminder letters or follow a particular sequence. Commercial dunning serves primarily for documentation and customer relationship care, not to establish legal default, which often already occurs earlier.
Limitation (§§ 195, 199 BGB)
The standard limitation period is three years from the end of the year in which the claim arose and knowledge was gained. Maximum periods of 10 or 30 years independent of knowledge apply only to separately named special cases such as personal injury, not to ordinary payment claims from contracts.
A question about your situation that this page does not answer? Write to us or use the contact form – we will tell you which office is responsible and what to bring. Free of charge, without individual legal advice.