Usually the answer to this is formulated in the rules of the institution. In Germany we call this the "Bachelor-/Masterprüfungsordnung" (for BSc and Msc) or "Promotionsordnung" (for a PhD).

The one from my institution contains something like
> Die Promotion dient dem Nachweis der Befähigung zu vertiefter selbständiger wissenschaftlicher Arbeit.
which translates roughly to 
> The PhD degree certifies the ability for deepened and independent scientific work. 

It also says that one needs a written work (called dissertation) and an oral exam. For the dissertation there is
> Die Dissertation muss die Befähigung der Verfasserin oder des Verfassers zu vertiefter und selbständiger
wissenschaftlicher Arbeit nachweisen und einen Beitrag zum Fortschritt der Wissenschaft auf [insert some field] darstellen.

which is roughly
>The dissertation has to certify the ability of the writer to do deepened and independent scientific work and contribute to the advancement of science in [insert some field].

There are also some regulations for the oral exam but actually there is not a specific term what constitutes a passed or failed oral exam.