Doing business with Germany? View this checklist of delivery and payment terms.

Cross-border contracts bring additional legal complexity. Not only because you’re collaborating with a foreign party, but also because you may have to deal with other legal rules, such as German law or the Vienna Sales Convention (CISG). If you don’t take this into account, gaps in the contract can quickly arise. Think of a missing delivery agreement, an unclear complaint period, or the absence of a liability clause valid in Germany.

It’s a misconception that these agreements are self-evident or obvious from the context. That’s rarely the case. What’s customary in the Netherlands doesn’t necessarily apply in Germany. And vice versa.

Delivery seems like a practical matter at first glance, but it has direct legal implications. When is delivery considered? At what point does the risk pass? Who arranges transport and insurance? Many disputes arise because these matters are not clearly arranged.

Incoterms are often used in international contracts to document delivery arrangements. However, experience shows that terms like “Ex Works” are not always well understood and, without further explanation, do not provide sufficient clarity.

Especially in the event of damage or delay, a clear delivery clause provides clarity. This prevents the discussion from shifting to the question of who was responsible for what.

A 30-day payment term in Germany is truly 30 days. Not 30 days after invoice approval or delivery, unless otherwise agreed. And anyone who doesn’t make agreements about due dates, interest, or late payment fees must rely on (unknown) legal regulations.

Therefore, make sure you agree in advance:

• within what period payment will be made
• in which currency
• at what time the invoice will be sent
• what happens in case of late payment

A clause regarding offsetting or suspension is also advisable: in Germany, it is not unusual to meet payment obligations in certain industries, even if there is a dispute about delivery.

In Germany, strict regulations apply to the buyer’s duty to inspect (Section 377 of the German Commercial Code). If a defect is reported too late, the right to repair or compensation is forfeited. At the same time, the CISG imposes a duty to file a complaint, which operates slightly differently.

It is therefore wise to include the following in the contract:

• within what period the buyer must report defects
• how this should be done
• what the consequences are if this does not happen

A well-formulated complaints procedure prevents you, as a supplier, from being confronted with complaints that arise months after delivery, without it yet being clear what exactly is wrong.

Many contracts include a limitation of liability clause. For example: “Liability is limited to the invoice amount” or “consequential damages are excluded.” This sounds logical, but in Germany, such clauses are subject to strict regulations and are often not permitted. Purchasing conditions there are assessed for transparency, reasonableness, and specific case law. A general exclusion of liability will therefore often be invalid.

Therefore, make sure that:

• your clauses are clear and understandable
• you know whether you are contracting under Dutch or German law
• you include realistic restrictions (for example with a maximum)

And: limit liability only to matters for which it is legally permissible.

The CISG (Vienna Sales Convention) often automatically applies to international B2B contracts, unless explicitly excluded. Many companies don’t realize this. As a result, the contract is unintentionally governed by rules you’re unfamiliar with, or that you wanted to avoid.

You can read more about this in this article – CISG: opportunities and pitfalls for Dutch exporters

If you do business with Germany, it pays to critically review your contracts and terms and conditions . A clear list of legal considerations helps prevent disputes, especially when working with new clients or if your production lines are internationally aligned.

Want to be sure your agreements will hold up in Germany? Have your terms and conditions reviewed by specialists familiar with both Dutch and German law.

Contact Heisterborg International for a free, no-obligation quick scan of your contract practice.