International Contracts — German and CISG Advisory

What Distinguishes International Contracts

A domestic B2B contract raises two core questions: what are the obligations, and what happens if they are breached? An international contract raises four additional ones: which law governs the contract? Which court or tribunal has jurisdiction? Which language version is authoritative? And does the UN Convention on Contracts for the International Sale of Goods (CISG) apply — intentionally or not?

These questions are practical, not merely academic. They determine which court has jurisdiction, which limitation periods run, and which party has the better starting position in a dispute. Contracts that are not explicit on these points leave them to statutory defaults that may not align with what the parties expected.

The CISG — When It Applies and When to Exclude It

The UN Convention on Contracts for the International Sale of Goods (CISG) applies to international sales of goods where the parties have their places of business in different Contracting States, or where conflict-of-law rules lead to the law of a Contracting State — unless the parties exclude or modify it. Germany is a Contracting State. The CISG applies to sales of goods; it does not generally apply to service contracts, licence agreements, corporate transactions or consumer sales. The CISG applies automatically where its conditions are met and does not need to be named in the contract.

Key practical differences between the CISG and German domestic sales law (BGB/HGB): the CISG has no requirement of formal writing for contract formation; the CISG’s notice rules for non-conformity differ from § 377 HGB; the CISG does not contain the German statutory AGB control under §§ 305 ff. BGB — however, incorporation, validity and standard-term control may still have to be assessed under the applicable domestic law. The CISG does not comprehensively govern limitation periods; limitation must usually be assessed under the applicable domestic law or any applicable limitation convention.

Whether to exclude the CISG depends on the specific transaction, the counterparty’s jurisdiction, and which set of rules produces a more predictable outcome. Reflexive exclusion is not always advisable. Where exclusion is wanted, the clause should be express and carefully drafted — for example: “The United Nations Convention on Contracts for the International Sale of Goods (CISG) is excluded” — if this is the intended result.

Choice of Law — Rome I Regulation

Choice of law and jurisdiction are separate questions. Rome I applies before courts in EU Member States and determines the law applicable to contractual obligations in civil and commercial matters. It can point to the law of an EU or non-EU state. An express choice-of-law clause in the contract is the most reliable method. Where no effective choice of law is made, Rome I provides default rules — most importantly, the law of the habitual residence of the characteristic performer (Art. 4 Rome I), subject to exceptions and mandatory rules.

German law can be a suitable governing law for many international commercial contracts, particularly where performance, counterparty or enforcement links exist in Germany. Parties should be aware that choosing German law does not automatically exclude the CISG — a separate exclusion clause is required if the CISG is not wanted.

If proceedings take place before a court outside the EU, that court will apply its own private international law. A German-law clause remains relevant, but its treatment depends on the foreign forum.

Choice of Jurisdiction — Brussels Ia

Within the EU, jurisdiction and recognition/enforcement of judgments are primarily governed by Brussels Ia. A jurisdiction clause should be drafted separately from the governing-law clause. A jurisdiction clause in favour of German courts may create exclusive jurisdiction under Art. 25 Brussels Ia if the formal and substantive requirements are met, unless the parties agree otherwise or an exception applies.

A jurisdiction clause in favour of German courts can be appropriate where German law is chosen, witnesses and evidence are in Germany, or enforcement within the EU is expected. Where the counterparty is outside the EU, enforcement of German court judgments depends on bilateral treaties, national rules or reciprocity — which vary by jurisdiction.

Arbitration vs Court

Arbitration may be more suitable where confidentiality, neutral forum or enforceability outside the EU are important. Arbitral awards may benefit from the New York Convention enforcement framework in many jurisdictions. For many German-law disputes, state courts may also be suitable.

Depending on the contract, German or international arbitration rules such as DIS, ICC or sector-specific rules may be considered. Arbitration clauses require careful drafting: institution, rules, seat, language, number of arbitrators, and governing law must all be addressed. A defective arbitration clause can result in a jurisdictional dispute before the merits are even reached. We advise on dispute-resolution clauses and coordinate specialist arbitration counsel where appropriate.

Cross-Border Supply, Distribution and Agency

For international supply and distribution agreements, the choice of law and jurisdiction intersect with the commercial structure: INCOTERMS risk transfer rules, retention of title provisions (which may not be recognised in all jurisdictions), and international contracts can raise sanctions, export-control or dual-use interfaces — we identify these issues at contract level and coordinate specialist compliance advice where the exposure is significant.

Where German law applies to a commercial agency agreement, the mandatory compensation rules under § 89b HGB may become relevant if the statutory requirements are met. For distributors or authorised resellers, analogous application of commercial-agent principles may be considered only in specific constellations, especially where the distributor is integrated into the supplier’s sales organisation and obliged to transfer customer data. These issues should be addressed at the drafting stage. Further detail is on our commercial contract law page.

Multilingual Contracts and Governing Language

International contracts are frequently drafted in English or in two languages. The governing language clause determines which version prevails in case of inconsistency. Where no governing language is specified and both versions are deemed equally authoritative, inconsistencies between versions can become a focal point of dispute.

A contract drafted in English but governed by German law requires careful alignment of English-language terms with their German legal equivalents. German legal concepts — Werkvertrag, Eigentumsvorbehalt, Anfechtung — do not always map directly onto common law concepts and should be reflected accurately, not just translated.

We draft and review international contracts in German and English, and advise on governing language, applicable law, and interpretation risk.

Hamburg as Forum

For contracts with a Hamburg or Northern Germany connection, Hamburg may be a practical forum to consider. Since 2025, Hamburg also has a Commercial Court for suitable high-value commercial disputes and Commercial Chambers for certain commercial disputes, with English-language proceedings available in qualifying cases where the statutory and procedural requirements are met. The specific jurisdiction and language option should be checked before choosing the forum. Further detail is on our commercial and civil disputes page.

How We Advise

We advise on cross-border contract drafting, choice of law, jurisdiction clauses, CISG applicability, and multilingual contract structuring. For related areas, see our contract disputes page and our corporate law page. Our firm advises in German and English.

Advice by Alexander Kagan, Attorney at Law, admitted to the Hanseatic Bar Association Hamburg. As of: June 2026.

The contents of this page are for general information only and do not constitute legal advice. A mandate is established only upon express acceptance.