Commercial Law in Hannover. Contracts, supply chains and distribution.
We draft business contracts and standard terms, secure supply chains, build distribution systems and enforce claims at home and abroad.
Contracts that follow the way the business runs
A contract that does not reflect how the business actually works gets worked around rather than used. We therefore write it along the process, with the deadlines and responsibilities that really exist.
- Framework, supply, works, services and cooperation agreements
- Quality assurance agreements and who is responsible for which inspection
- Caps on liability, contractual penalties and provisions on consequential loss
- Price adjustment, raw material clauses and force majeure
- Change of control clauses and the fate of contracts on a transaction, with our practice area Corporate Law
Terms that still apply when a dispute arises
Where both sides refer to their own terms, the conflicting clauses fall away and the statute takes their place. That is precisely when retention of title, the cap on liability and the agreed forum go missing. The framework agreement solves it.
- Sales and purchasing terms for business-to-business trade
- Effective incorporation, including in ordering processes and electronic workflows
- A priority provision in the framework agreement over conflicting terms
- Retention of title, extended and prolonged, and its limits
- Advertising statements and price indications in the terms are reviewed by our practice area Intellectual Property
Securing sourcing and passing duties down the chain
Anyone who procures carries duties that have to be passed on to the suppliers, or they stay where they are. That applies to quality and deadlines just as much as to the requirements on due diligence in the chain.
- Purchasing terms, periods for examination and notice, and the effect of missing them
- Passing supply chain due diligence duties on to suppliers and subcontractors
- Protection against the failure of a single supplier, including second sources and stockholding
- Product liability as between manufacturer, dealer and supplier
- Where a supplier fails, we secure goods and claims with our practice area Insolvency Law
The CISG, Incoterms and choice of law
The CISG applies of its own accord where both sides are established in contracting states and the contract does not exclude it. A blanket exclusion in the standard terms is therefore not a precaution but a decision.
- International sale contracts, with and without the CISG
- Incoterms and what they do and do not govern, such as the passing of title
- Choice of law, jurisdiction and arbitration clauses, agreed before any dispute
- Securing payment through letters of credit, bank guarantees and advance payment
- Carriage, the passing of risk and carrier liability are handled by our practice area Transport Law
Commission, statement of account and the end of the agency
The claim to compensation cannot be excluded in advance, and it lapses one year after the agency ends. Together those two rules make the end of the agency the real negotiation, not its beginning.
- Agency agreements with provisions on territory, customer protection and commission
- The claim to compensation under section 89b of the Commercial Code, its calculation and negotiation on either side
- Statements of account and rights to information, to quantify the commission
- Post-contractual restraints of trade, for at most two years and only against payment
- The line against an employment relationship is drawn by our practice area Employment Law
Building distribution networks within competition law
Fixed resale prices are unlawful under competition law, and a breach affects not only the price but the validity of the whole distribution agreement. That review therefore belongs in the design of the system.
- Dealer and franchise agreements, including the system manual and the fee model
- Selective and exclusive distribution, territorial protection and cross-supplies
- Recommendations, maximum prices and the line to unlawful resale price maintenance
- The dealer claim to compensation and how it is dealt with in the contract
- Site and sublease agreements for the partners are handled by our practice area Commercial Lease Law
Entering markets without missing protective rules
Within the European Union commercial agents enjoy mandatory minimum rights that a choice of law cannot exclude. Outside it, protective rules can go further still. The structure has to allow for that from the outset.
- Choosing the form of distribution for each market, from agency to a subsidiary of your own
- Mandatory minimum rights within the European Union and beyond it
- Agreements with importers and distributors, including minimum purchase and termination
- Export controls, sanctions and customs questions in distribution
- Data transfers to distribution partners in third countries are reviewed by our practice area Data Protection
Platforms, portals and electronic procurement
In digital selling the contract comes into being through the flow of the interface. When it is concluded, which terms apply and who is responsible for the connection have to be reflected in the process, not only in the contract text.
- Distribution agreements over your own portals and over third-party marketplaces
- Electronic ordering processes, interfaces and the moment the contract is concluded
- Drawing the line between selling on your own account and acting as an intermediary
- Managing prices and conditions through digital channels
- The technical and legal side of the platform is handled by our practice area IT Law
Enforcing claims at home and in other countries
Within the European Union a German judgment can largely be enforced without any special procedure. Outside it that depends on treaties, and there an arbitral award is often the more reliable instrument.
- Pursuing and defending claims under supply and distribution agreements in court
- Arbitration and mediation, confidential and with an expert tribunal
- The European order for payment and cross-border debt recovery
- Recognition and enforcement of judgments and awards abroad
- Letters of credit, guarantees and sureties as payment security are handled by our practice area Banking Law
Answers to the most important questions
Can’t find your question here? Please get in touch! We’ll usually get back to you within two working days.
Do my standard terms apply to business customers as well?
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Yes, where they have been effectively incorporated. Between businesses a clear reference at the time of contracting and the opportunity to read the terms is usually enough. Even between businesses the terms are reviewed for unreasonable disadvantage, though less strictly than towards consumers.
What happens where both sides refer to their own terms?
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The conflicting clauses generally do not apply, and the statutory position takes their place. Provisions that match remain effective. For liability, retention of title or jurisdiction that is often unwelcome, so a provision in the framework agreement that takes priority over the terms is worth having.
How quickly must delivered goods be examined for defects?
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Between merchants, without delay after delivery. Apparent defects must be notified at once, hidden defects without delay after they are discovered. Anyone who fails to give notice loses their remedies. Many purchasing terms therefore set out express periods for examination and notice.
Can liability be excluded in a business contract?
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Largely in an individually negotiated contract, and only to a limited extent in standard terms. An exclusion in standard terms is ineffective for intent and gross negligence and for injury to life, body or health. Caps on liability and the exclusion of consequential loss for slight negligence are generally permissible, provided no cardinal obligations are affected.
Does the CISG apply to my export contracts automatically?
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Yes, where both parties are established in contracting states and the contract does not exclude it. That is the case with most of Germany trading partners. Whether an exclusion makes sense depends on the case; a blanket exclusion in the standard terms is not always the better choice.
What do the Incoterms govern and what do they not?
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The Incoterms govern who arranges carriage, who bears the cost and when risk passes to the buyer. They do not govern the passing of title, payment or liability for defects. Those points have to be in the contract of sale itself.
Which law applies where the contract says nothing?
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Private international law then determines which national law applies, and within the European Union that is usually the law of the seat of the party providing the characteristic performance. In a sale that is normally the seller. An express choice of law and an agreed jurisdiction create clarity before any dispute arises.
How large is a commercial agent claim to compensation?
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At most one average annual commission, calculated over the last five years of the agency. Whether it arises, and at what level, depends on the benefits the principal continues to draw from the customers the agent brought in. The claim cannot be excluded in advance by contract.
By when must the claim to compensation be asserted?
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Within one year of the end of the agency. The period is strict, and afterwards the claim is barred. A statement to the principal is enough to assert it, and the amount need not yet be quantified.
May I set the prices my distribution partners charge?
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Setting fixed resale prices or minimum prices is generally unlawful under competition law. Non-binding recommendations and maximum prices are in principle possible, so long as no pressure is applied. Breaches can lead to fines and to the distribution agreements being void.
How we work at activelaw
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