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International Sales Contract | German Attorneys

Which particularities should be considered for an international sales contract?

In the wake of globalization, not least in the case of the export-oriented German economy, international sales contracts are part of the everyday life of many small and medium-sized companies. When concluding such an international sales agreement, it must be taken into account that some aspects are subject to regulation that, in purely domestic circumstances, plays no or only a secondary role.

General terms and conditions

German courts frequently impose different or special requirements on the drafting of general terms and conditions (GTC) when foreign contracting parties are involved. When drafting international sales contracts under foreign law, it should also be noted in this context that, unlike German law, many foreign legal systems do not recognize the inclusion of general terms and conditions by mere reference. Therefore, there are two options for a contract with a foreign contractual partner:

  1. the contract and the general terms and conditions are regulated separately or else
  2. the contract simultaneously fulfills the requirements of the regulations on general terms and conditions

In the case of the latter, GTC do not have to be written out separately.

The UN Convention on contracts for the international sale of goods

The UN Convention on contracts for the international sale of goods may apply to the international sales contract between a German and a foreign company. This shall apply not only if the foreign contracting party also belongs to a country which is a party to the UN Convention on contracts for the international sale of goods, but also if the contract is governed by German law in accordance with the rules of private international law or by virtue of a choice of law.

Applicable law on international sales agreements

The law of which country applies to a contract is determined by the circumstances of the individual case. It is therefore recommended to always make an explicit choice of law. If necessary, the law of a third, "neutral" state can also be chosen.

Place of jurisdiction

The effectiveness of an agreement on the jurisdiction of a court, for example a German court, is not assessed according to the Code of Civil Procedure, even in the case of an international contract between a German company and a company that has its registered office outside the EU, but in principle according to Council Regulation (EC) No. 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (EuGVVO). It should be noted that the EuGVVO imposes different conditions on the effectiveness of the agreement than the Code of Civil Procedure, in particular if the agreement on jurisdiction is contained in general terms and conditions.

Arbitration agreement

Instead of agreeing in an international contract on the jurisdiction of ordinary courts, an arbitration agreement can also be made. There are several reasons why a dispute should be decided by an arbitration court instead of an ordinary court. For example, the costs of arbitration proceedings are generally lower than those of a trial involving several instances, which is also reflected in the duration of the proceedings. Furthermore, the contracting parties can generally influence the selection of the arbitrators and thus take into account their industry knowledge.

Particularly in non-European areas, enforcement of arbitration court decisions is easier than in the case of judgments of ordinary German courts. Recognition and enforceability are governed by the Convention of June 10, 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, to which most countries are party.

Important elements of an international contract

Because these points often play a rather subordinate role in "domestic" contracts, special attention should be paid in the case of an agreement for the international commercial sale of goods to the following points:

  • the way in which the inclusion of general terms and conditions (GTC) is regulated,
  • the question of the law applicable to the contract and, if applicable, the exclusion of the application of UN sales law,
  • the manner of a jurisdiction agreement or, if applicable, an arbitration agreement.

Your attorney for international sales contracts

Your contact persons for designing, reviewing and possible enforcing of your claims under international purchase contracts are 

Please contact us by e-mail (info@winheller.com) or by phone (+4969 76 75 77 80).

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