What does the legal principle falsa demonstratio non nocet describe ?

In principle, contracts are interpreted according to how an objective third party may understand them. However, a contract is not necessarily invalid if the true intention can be determined beyond doubt.

The legal term falsa demonstratio non nocet comes from Latin and means "a wrong designation does not harm". This means that it is harmless for the conclusion and effectiveness of a contract if the contracting parties want the same thing but designate or name it incorrectly in the contract.

In the case of falsa demonstratio non nocet, this is a special case of the interpretation of declarations of intent requiring receipt in accordance with Sections 133, 157 BGB, in which both parties are mistaken about the same thing. Consequently, a contract is concluded with the content that the contracting parties unanimously intended.

In employment law, the principle of falsa demonstratio non nocet applies, for example, if the termination agreement is referred to as a termination agreement. The contract does not lose its validity if both parties are aware that the termination agreement is meant.

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