Choice of address forms, a socially crucial feature in German communication, is context-dependent on situations (a) where the unmarked form of address is "du" (T), (b) where it is "Sie" (V), and (c) where the two systems (a and b) coexist. The first two situations are, apart from their fuzzy edges, rather clearcut. The third situation, however, appears anarchic and has a high embarrassment potential. In an empirical study based on 72 interviews conducted in three regions of the German speaking area, the three prototypical situations are explored. A number of potentially conflicting rules and preferences for ambiguity are isolated. These include individual preferences, network preferences and perceptions of social distance, based on factors such as relative age, emotional closeness of interlocutors, and perceived commonalities between them. In spite of the complex interplay of competing rules and preferences and the consequent embarrassment potential, German speakers appear to reject any imposition from outside of a particular address form. This study is part of a larger, Australian-based project comparing the address systems of French, German and Swedish. (Contains 13 tables and 4 endnotes.)