Assistance with foreign business transactions, contract drafting, general terms and conditions
Cross-border business transactions have their own rules. Before taking the step across the border, it is advisable to check one's own usual business procedures for their compatibility with the international context and to get a clear picture of the opportunities and risks of the specific foreign transaction: often a minimal adjustment can make the difference for entrepreneurial success.
Important differences to purely domestic situations can arise, for example, in connection with the following topics:
- Admissibility of certain contractual clauses
- Validity of general terms and conditions in relation to the foreign contractual partner
- Content and form of an order or order confirmation
- Law on warranties and liability for material defects
- Prerequisites for cancellation of a contract
- Termination of continuing obligations
- Limitation of claims for performance and payment
- Enforcement of contractual claims
- Insolvency of the business partner
Based on our profound knowledge of international sales and contract law, coupled with many years of experience in German-Italian business transactions, we offer our clients legal advice from a binational perspective which, in addition to optimal legal contract drafting, also takes into account the specific differences of a legal, commercial and cultural nature in business dealings with each other. In this way, we enable our clients to better understand the expectations and needs of their commercial counterparts and thus achieve a more effective, conflict-preventing enforcement of our clients' interests vis-à-vis their contractual partners.
Taking into account the international orientation of their commercial transactions, we advise our clients comprehensively on the drafting of their contracts or terms and conditions, accompany them in the execution of the contract and enforce their interests out of court and in (arbitration) court.
Specialised in international contract law
The firm's lawyers have completed their training in Italy and Germany and are admitted to the bar in both countries. Thanks to our knowledge of both legal systems and many years of experience in cross-border and international practice, we are able to examine the various concerns of our clients from the outset from an international perspective, taking into account both the legal differences between Italy and Germany and specific regulations for cross-border situations. This enables us to identify the most appropriate strategy for safeguarding the client's interests in each case and to propose targeted solutions that best meet the client's individual needs.
Our contract law services in detail
The drafting of contracts, especially in cross-border transactions, often sets the course for a successful commercial relationship with the foreign business partner.
In international contracts, special attention must be paid to the advantages and disadvantages of the various legal systems in question, but also to the application of certain regulations such as the UN Convention on Contracts for the International Sale of Goods (CISG) or the Convention on the Law of Transport (CMR).
In addition, the drafting of dispute resolution clauses is of great importance, be it in the determination of alternative dispute resolution methods (ADR, mediation LINK) or in the drafting of arbitration or jurisdiction clauses.
We advise on the drafting or review of international commercial contracts, in particular:
- sales contracts
- service contracts
- IT contracts
- Plant construction contracts
- Commercial lease agreements
- Online trade
- Sales contracts of all kinds
- Real estate purchase contracts
- Supply and freight contracts
For your serial transactions (orders, order confirmations, online contracts, etc.), the use of general terms and conditions is also recommended for foreign business.
In this context, the special features of cross-border trade must be taken into account to a particular extent. For example, the control of the content of general terms and conditions is handled differently in the national legal systems. The prerequisites for the effective inclusion of GTCs also differ depending on whether German, Italian or UN sales law is applicable to the contractual relationship.
Therefore, it cannot be ruled out that the use of domestic GTCs loses its effect in certain - also European - target countries because possibly relevant clauses cannot be effectively included for certain international trading partners; on the other hand, it is also conceivable that a GTC clause that does not satisfy the content control in Germany, for example, can be effectively agreed between entrepreneurs under Italian law. In such cases, it may be worth considering the application of Italian law.
We draft general terms and conditions tailored to cross-border situations for our clients, which can operate within the legal framework of the target country or countries without their user having to worry about their effectiveness. In doing so, we also take into account sector-specific peculiarities (such as online trading, IT contracts, logistics and transport contracts, etc.).
In addition, we undertake the review of the trading partner's GTC for our clients, advise on any liability or default risks and draft appropriate defence clauses for use in the client's own GTC or in the individual contract.
Even in the course of a well-functioning supply relationship, moments of crisis can occur, the successful overcoming of which requires not only commercial skill but also knowledge of the legal background and consequential risks.
Depending on the circumstances of the case, we support our clients both as advisors in the background and as negotiators with the trading partner to help them out of the crisis. The object of our advice is always a crisis management oriented towards the needs of our clients, including alternative, creative proposals for solutions, and always with the aim of maintaining or even strengthening the business relationship.
In particular, we advise our clients by providing them with the necessary background knowledge of the applicable law (namely, in the case of the applicability of the UN Convention on Contracts for the International Sale of Goods in the Italian or German legal context). We advise our clients
- on the various possible courses of action,
- on the possible legal consequences of certain declarations,
- on liability and default risks,
- on the prerequisites and legal consequences of termination and/or rescission,
- on the legal consequences of breaches of contract
- on further (arbitration) court proceedings or alternative dispute resolution methods.
In addition, we work out legally secure, conflict-ending settlements and other agreements for our clients, with the help of which the crisis in the supply relationship is overcome and future disputes are avoided.
In the case of cross-border sales contracts within the scope of application of the UN Convention on Contracts for the International Sale of Goods, special rules must be observed, if not excluded by contract, which may in some cases differ considerably from national sales laws, e.g:
- Modalities and time limits for obligations to examine and to give notice of lacks of conformity
- Conditions for cancellation of the contract
- Liability irrespective of fault
- Limitation of the amount of damages to the foreseeable damage
Comprehensive and careful advice on contractual rights and obligations, both in the position as buyer and as seller, enables our clients to prevent mistakes and thereby avoid - sometimes considerable - disadvantages.
We also actively support our clients in the handling of warranty cases, be it in the defence against material defect claims or in the enforcement of warranty rights. In doing so, we always take a pragmatic approach, aiming for a quick and economically sensible result.
If an out-of-court solution is out of the question, we represent our clients before both Italian and German courts, in arbitration proceedings and in the context of alternative dispute resolution (mediation, ADR).
Contractual peculiarities in Italy
Inclusion of GTC
If Italian law is applicable, the inclusion of certain clauses that are particularly onerous for the contractual partner (so-called clausole vessatorie) requires that the contractual partner separately agrees to these clauses by means of an additional signature (so-called doppia firma). The individual onerous clauses must be expressly named, which is usually done by a separate text module at the end of the GTC, under which the (second) signature is placed.
Product liability
According to Italian law, the manufacturer of a defective product is liable without liability and without limitation for death or injury to persons or damage to private property caused by the defect. An exclusion or limitation of the manufacturer's liability for such damages is not permissible - even for serial damages. Product liability thus goes further than under the German Product Liability Act, so for export transactions a German entrepreneur should enquire with his insurance company whether corresponding insurance cover is granted.
Limitation periods
Whereas in Germany warranty rights are subject to a limitation period of two years (for buildings: five years), Italian law provides for a limitation period of only one year for warranty claims.
Purchase price claims, on the other hand, become time-barred within the standard limitation period, which in Italy is ten years, more than three times the German three-year standard limitation period.
For exports to Italy, it may therefore be worthwhile to agree on Italian law.
It should also be noted that in Italy the statute of limitations can already be interrupted by putting the debtor in default (e.g. by means of a lawyer's reminder), whereas in Germany in principle only the initiation of judicial measures can prevent the statute of limitations of a claim.
Retention of title
The agreement of a retention of title in the sale of movable goods is much less common in Italy than in Germany. Moreover, Italian case law considers the agreement of an extended or expanded retention of title to be inadmissible, which goes so far that the entire retention of title agreement can be considered null and void. Against this background, only the agreement of a simple retention of title is recommended vis-à-vis Italian customers.
It should be noted that under Italian law the effectiveness of the simple retention of title vis-à-vis third parties (e.g. vis-à-vis the insolvency administrator in case of insolvency of the debtor) is furthermore made dependent on the fact that the date of the agreement on the retention of title can be proven "with certainty" (so-called data certa). This can be done, for example, by notarial certification or by sending a certified e-mail (so-called PEC).
Frequently asked questions from our clients
The answer to this question depends first of all on whether Italian or German law and whether the UN Sales Convention are applicable.
- If Italian law alone is applicable to the contractual relationship, then for general terms and conditions to be validly included, the contractual partner must have separately signed the clauses that are disadvantageous to him.
- According to German law, the user must have pointed out the general terms and conditions to the contractual partner and enabled him to take note of them.
- Under the UN Convention on Contracts for the International Sale of Goods, the GTC must have been made available to the contracting party at the time of conclusion of the contract.
- In all cases, the GTC must be written in the language of the contract or in any case in a language understandable to the contractual partner.
In the absence of a separate contractual agreement, the UN Convention on Contracts for the International Sale of Goods is applicable as part of the German legal system. Although this provides for liability for material defects regardless of fault, your Italian customer can in principle only demand cancellation of the contract if he has properly inspected the goods and given notice of defects, if the defect constitutes a fundamental breach of contract and if a reasonable period of time for rectification has expired to no avail. Furthermore, according to the UN Sales Convention, the amount of damages to be claimed is limited to the damage that was also foreseeable at the time of the conclusion of the contract: this excludes unforeseeably high compensation obligations.
With regard to the duration of the warranty obligation, the limitation periods of German law apply, in this case two years.
If the goods are collected at the supplier's place of business in Milan, this place is to be regarded as the place of performance. The German court at the buyer's place of business and the Italian court at the place of performance are therefore both competent for actions for payment by the seller. The only way to avoid legal action abroad in such a case is to agree on the place of jurisdiction.
