6 tips on using standard terms in international contracts

Different rules apply to general terms & conditions in international contracting, take this into account. You should pay attention to 6 points in general terms & conditions: the handing over, language, conflicting standard terms, priority and interpretation of clauses, and the option of excluded clauses or standard terms.

The Dutch regulation regarding general terms & conditions does not apply to international business contracts. Not even when you have agreed that Dutch law shall apply. Therefore, it is wise to arrange a number of matters differently from what you would do with a Dutch trading partner. The Vienna Sales Convention (United Nations Convention on Contracts for the International Sale of Goods, CISG) applies to international sales agreements, unless this is expressly excluded.

Here are 6 tips to keep in mind regarding the international regulations:

1. Have the other party sign for receipt of the general terms & conditions.
2. Negotiate in a language where your general terms & conditions are already available.
3. Seek the advice of a lawyer regarding the applicable law and general terms & conditions.
4. Include important topics, such as applicable law and jurisdiction, in the contract. This way you also prevent problems if it turns out your standard terms do not apply.
5. Inform the other party about unusual clauses in general terms & conditions. Use capital letters for these clauses or refer to them.
6. Make sure that the general terms & conditions are unambiguous. Have them checked for use abroad too.

1. When do I have to hand over the general terms & conditions?

The other party needs to have a reasonable chance to take note of the general terms & conditions. This is the case if:

1. The general terms & conditions are attached to or printed on the back of documents that were exchanged during the negotiations.
2. The general terms & conditions are available to the parties at the time of physical negotiations.
3. In the case of electronic communication, it is sufficient that the general terms & conditions are electronically available at the time of the negotiations.
4. Previous agreements made by the parties were subject to the same general terms & conditions.

2. In what language must the general terms & conditions be?

Both the reference to and the content of the general terms & conditions must be comprehensible to the other party. So they must be drawn up in a language the other party understands. Languages that can be used are:

• The language in which the negotiations were concluded
• The language of the part of the agreement that was negotiated
• The language usually spoken by the other party.

There is no reason to assume that certain languages, such as English, will be understood if you have not used it in the negotiations.

3. What is the rule if both parties refer to their respective general terms & conditions?

Under the Vienna Convention – just like the UNIDROIT Principles – only corresponding terms apply to the agreement. The exception to this is if a party has clearly and timely indicated that it does not agree with this. This is different from the Dutch rule. In Dutch law, the main rule is that only the general terms & conditions will apply to the agreement that were referred to first, unless the other party explicitly dismisses them. In contrast, the main rule in the UK is that the general terms & conditions will apply that were referred to last. The United States apply that same rule as the Vienna Convention: only the corresponding terms do apply to the agreement.

4. What if the general terms & conditions state something else than the contract?

What is stated in the contract outweighs clauses in the general terms & conditions. So you cannot avoid clauses from your contract by invoking your general terms & conditions.

5. What if there are unusual provisions?

On grounds of the Vienna Convention, clauses of the general terms & conditions that are surprising or unusual to the other party are not part of the agreement. These clauses are only valid, if pointed out to other party. This is different in Dutch law, where such provisions between companies are permitted.

6. How are unclear provisions interpreted?

General terms & conditions must be as unambiguous as possible. Provisions that are not clear will be interpreted to the benefit of the other party. In determining the scope of a clause, the other party’s reasonable interpretation of the provision must be taken into account. What is clear to a Dutchman, may be unclear to a Briton, for instance.

More information

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