Can your standard terms and conditions work for sales of overseas exports? Robert Bryan, partner at BPE Solicitors LLP explores.
You’ve spent a few pounds with your legal team in order to have a set of absolutely perfect terms and conditions of supply – every clause you could ever want, and a few more besides, sit there in glorious 8pt Times New Roman font, printed on the back of every quotation, order form, contract and invoice. What more could you possibly need?
The answer, if your business is one of the ever-increasing numbers to whom national boundaries are no object to trade, is specialist knowledge of those countries into which your goods are being sold.
Your terms and conditions may well contain a clause stating that English law applies to the contract between you and your supplier, or between you and your customer, but what if the supplier’s or customer’s terms contain a similar clause in relation to their country?
If your terms apply English law, and the supplier’s or customer’s terms apply French law, what is the position?
European law, helpfully, states that in the absence of an agreement position, contracts for the sale of goods will be governed by the law of the country in which the seller is based. Except for distribution agreements, where it will be governed by the law of the country in which the distributor is based.
Oh, and there are different rules for auctions, for service contracts, for franchise agreements and so on. The law has never been simple.
But that doesn’t help when trading outside the European Union, where there are no equivalent.
In some Canadian provinces, for example, what you and I would consider a mere buyer of goods can be classed as a franchisee, and would enjoy statutory rights beyond those enjoyed in the UK.
In some countries, clauses that limit or exclude liability are only enforceable if written in bold text or in capital letters.
A simple lack of awareness of these country-specific rules could end up with your carefully written terms and conditions being little more than worthless.
One size does not fit all when it comes to embracing international exports trade, so when was the last time you reviewed the terms on which you do business with your global trading partners?