Value guarantee clauses in commercial leases under scrutiny – review of general terms and conditions with retroactive effect

Higher Regional Court of Düsseldorf, judgment of June 5, 2025 – I-10 U 146/24

In its judgment of June 5, 2025, the Higher Regional Court of Düsseldorf made a decision of significance for real estate practice regarding the validity of value guarantee clauses in commercial lease agreements. The focus is on the question of whether and under what conditions a value guarantee clause is subject not only to the Price Clause Act (PrKG) but also to the review of general terms and conditions under Section 307 of the German Civil Code (BGB) – with the consequence of retroactive invalidity.

Value guarantee clauses in commercial leases have become increasingly important to landlords in recent years because graduated rents – which served well during the low-interest phase until 2022 compared to index clauses – will often not be able to fully compensate for inflation rates from 2022 onwards.

However, experience has shown that value guarantee clauses carry a higher risk of invalidity, particularly due to their lack of transparency in some cases. The Federal Court of Justice has so far taken a rather liberal approach (see, for example, BGH, judgment of May 26, 2021 – VIII ZR 42/20). However, index clauses have been under critical scrutiny in legal literature for some time. The ruling of the Higher Regional Court of Düsseldorf is a prime example of the vulnerability of index clauses, which entails a corresponding need for advice.

Facts

The Higher Regional Court of Düsseldorf had to rule on the validity of a value guarantee clause in a long-term commercial lease agreement that referred to an index level that was more than two years prior to the start of the lease. The agreement was concluded on August 28, 2019, and the lease commenced on September 1, 2019. Section 6 of the agreement stipulated that the rent would initially remain fixed until August 31, 2021, and would then be adjusted "automatically" in line with the consumer price index (CPI). However, the starting point for indexation was the CPI level in May 2017 – i. e., more than two years before the actual start of the lease.

On the basis of this provision, the landlord had demanded rent increases on several occasions. The tenant contested the clause, paid the increases under reservation and demanded their repayment. The regional court of first instance upheld the claim, ruling that the clause was unreasonably disadvantageous and non-transparent within the meaning of Section 307 of the German Civil Code (BGB) and declared it invalid from the outset. The Higher Regional Court of Düsseldorf confirmed the decision and emphasized that violations of the law on general terms and conditions – unlike violations of the Price Clause Act (PrKG) – lead to invalidity ex tunc. An appeal was allowed because there has been no clarification by the highest court to date.

Reasons for the decision

The ruling has considerable practical relevance.

1. Ineffectiveness from the outset

Unlike the Higher Regional Court of Schleswig (reference decision of February 5, 2024 – 12 U 69/23), which considers Section 8 PrKG to be a special provision that assumes invalidity only upon a final decision ("ex nunc") in the event of violations of the transparency requirement, the Higher Regional Court of Düsseldorf makes a strict distinction: Only in the event of a violation of the PrKG does subsequent invalidity apply from the date of legal validity (Section 8 PrKG), whereas in the event of a violation of Section 307 BGB, immediate invalidity applies ex tunc, i. e., from the conclusion of the contract (Sections 306, 307 BGB).

The starting point of this conflict is that both the PrKG and the BGB require that a value guarantee clause be transparent and not lead to any unreasonable disadvantage for either party in order to be valid.

The central issue therefore concerns the qualitative distinction between the test criteria of the Price Clause Act (PrKG) on the one hand and §§ 307 et seq. BGB on the other hand with regard to the review of general terms and conditions. The Senate expressly rejects granting the PrKG – in particular Section 8 – general priority in the sense of a "lex specialis" over the law on general terms and conditions. This has significant consequences for the temporal effect of the invalidity of the clauses concerned.

In its preliminary ruling of February 5, 2024, the Higher Regional Court of Schleswig had held that, in any case, where the standards in Section 2 (1) No. 2 PrKG and Section 307 (1) sentence 2 BGB are identical, a violation of the PrKG also excludes a violation of Section 307 BGB. Consequence: A clause only becomes invalid upon final determination – ex nunc – as provided for in Section 8 PrKG.

The Higher Regional Court of Düsseldorf clearly disagrees with this. It refers to the different regulatory objectives of the two sets of rules:

• The PrKG primarily pursues economic objectives and protects against price manipulation and inflation spirals, which can be caused in particular by automatic value guarantees in contracts. Therefore, a violation of the PrKG is subject to a cautious legal consequence (ineffectiveness ex nunc) in order to avoid legal uncertainty in the case of contracts that have already been performed. Ultimately, this is a consequence of the fact that the PrKG is primarily concerned with protecting collective interests and not individual interests from discrimination.
• The review of general terms and conditions pursuant to Section 307 BGB, on the other hand, serves to balance the civil law interests of the contracting parties (individual interests) and protects against unreasonable disadvantages arising from unilateral contract terms. This assessment requires – systematically and consistently – that the clause in question be invalid from the outset (ex tunc), Section 306 BGB.

The Higher Regional Court of Düsseldorf clarifies this as follows:

"As shown, there is no apparent valid reason for not subjecting a price clause to all provisions of the BGB."

The legislative materials relating to the PrKG also contained no indication that the law was intended to be exhaustive or to supersede the BGB in this respect. Rather, there is no relationship of precedence between the two sets of rules, but rather a coexistence with independent standards of review and legal consequences.

The Senate's methodological approach is particularly noteworthy: it carefully distinguishes between a violation of the PrKG and a violation of Section 307 BGB. The latter is examined independently and, in the specific case, justifies the invalidity of the value guarantee clause from the moment the contract is concluded.

In addition, the OLG relies on the highest court rulings of the BGH, for example on tension clauses in energy supply law (BGH, judgment of March 24, 2010 – VIII ZR 304/08), and applies the principles developed there to commercial tenancy law. Here, too, there is no reason to exclude the review of general terms and conditions.

2. Unreasonable disadvantage due to relocation of the reference point for indexation before the start of the lease

The provision in Section 6 of the lease agreement stipulated that the rent would change "automatically in the same proportion" if the CPI changed relative to this reference date. A key argument for the invalidity of the value guarantee clause at issue was, in the view of the OLG Düsseldorf, that it was based on an index level that was more than two years prior to the start of the lease – specifically, the CPI level of May 2017. However, the start of the lease was not agreed until September 1, 2019.

The tenant was therefore required to pay an inflation-related rent increase from the start of the lease – for a period during which she had received no consideration in return. In the court's view, this violated the principle of equivalence and constituted an unreasonable disadvantage (Section 307(1) of the German Civil Code (BGB)).

The Higher Regional Court of Düsseldorf stated the following in this regard:

"There is an unreasonable disadvantage to the plaintiff in that [...] May 2017 was agreed as the starting point for the relevant index development. This date is well before the start of the lease [...], and this means that any inflation that has occurred since May 2017 is borne by the plaintiff, even though it did not receive any consideration from the defendant during this period."

In addition, the Senate criticizes the lack of transparency of the clause pursuant to Section 307 (1) sentence 2 BGB, as the adjustment mechanism was contradictory: On the one hand, the rent was to increase "automatically" with index changes, but on the other hand, its effectiveness was made dependent on "a written request from the landlord." Furthermore, it remained unclear whether subsequent adjustments were to be based on the index level of May 2017 or on the respective last adjustment dates. These ambiguities led to the lack of transparency and invalidity of the clause as a whole.

Since the clause was invalid from the outset, it could not justify any rent adjustment. The tenant was therefore entitled to reclaim all increases paid on the basis of the clause (Section 812 (1) sentence 1 alternative 2 BGB).

A severability clause did not help the landlord – a reduction to preserve validity is not possible for general terms and conditions clauses (Section 306(2) BGB).

Practical tips

The decision makes it clear that value guarantee clauses are not only subject to the PrKG, but also to full review of general terms and conditions. Violations of Section 307 BGB lead to invalidity ex tunc, i. e., from the conclusion of the contract – with considerable economic risks of recovery.

Landlords and project developers should carefully review existing and planned value guarantee clauses in commercial lease agreements. The use of a reference index date that is earlier than the contractually agreed start of the lease is particularly critical – a situation that is often encountered in "off-the-shelf" leases. Such clauses carry a considerable risk of invalidity.

In addition, it must be ensured that the clause is transparent, for example by clearly specifying the adjustment period, the calculation formula, and a clear and consistent provision on the formal conditions for the adjustment. The inclusion of a severability clause does not protect against the consequences of an invalid value guarantee clause – there is no reduction to maintain validity.

In view of the permitted revision, it remains to be seen how the Federal Court of Justice will rule. Until then, contracts should be drafted conservatively and in a risk-minimizing manner.