The difference between a pleasant contact and a delivery contract.
The first contact with your German customer often has a technical background. You are able to realise the requested specs. The delivery time is also within the margin for new suppliers. Last but not least, you have an interesting tiered pricing system to be competitive on the German market as well. But what did we forget?
Indeed: the legal conditions, partly formulated in the terms of delivery and payment (= AGBs - Allgemeine Geschäftsbedingungen). And then not only mentioning the applicable Incoterms. Also consider elaborate articles for e.g. extended retention of title. And also make sure your scope is tightly defined: what falls outside this contract?
Because with German customers, there is 'nothing more to do' later. You then quickly find yourself in a stalemate, often followed by a legal confrontation. And when lawyers start negotiating, it is primarily about filing. The German lawyer pays close attention:
- How exactly is the transaction described in terms of offer (quotation) and acceptance (order confirmation)?
- What damages and consequential losses have occurred on the customer side?
- Not forgetting: how can we suspend payment?
In summary: absolutely prioritise detailed contract formation in Germany.
PS - In the most extreme situation, you will receive a verbal commitment to deliver. It is better to reject such an agreement (do it in writing), as ........the likelihood of meeting at court is high.
This blog has been written by Jan Temmink. View his profile here.
