An international sales contract is an agreement in which the contracting parties (buyer and seller) are based in different countries, and goods or services are delivered across national borders. These goods may be supplied within the EU or exported to a third country.

Compared to a purely domestic (e.g. intra-German) sales contract, an international sales contract requires more detailed provisions regarding the goods, delivery terms, choice of law, and jurisdiction.

This is due in particular to differing product and quality standards, long transportation routes, customs duties and taxes, and the involvement of different legal systems and courts across countries.

The United Nations Convention on Contracts for the International Sale of Goods (CISG), also known as the UN Sales Law, applies. This is an international treaty that establishes uniform rules for cross-border sales of goods. It applies to contracts between parties whose places of business are located in different contracting states.

The CISG governs key aspects such as contract formation, the obligations of the parties, delivery, payment, warranties, and liability.

Where German law is applicable in addition, the provisions of the German Civil Code (Bürgerliches Gesetzbuch – BGB) may also apply as a supplementary legal framework.

Yes, the application of the UN Sales Law (CISG) can be excluded in an international sales contract.

If excluded and German law applies, only the provisions of the German Civil Code (Bürgerliches Gesetzbuch – BGB) and the German Commercial Code (Handelsgesetzbuch – HGB) will govern the contract.

Yes, it is advisable to put an international sales contract in writing. This offers several important advantages.

A written agreement ensures that all parties share the same understanding and expectations—particularly important when the parties come from different cultural backgrounds and speak different languages.

A written contract also provides clear evidence of the agreed terms and can be relied upon in the event of disputes or uncertainties.

In international contracts, it is especially important to agree in writing on the choice of jurisdiction, in order to establish clarity regarding the applicable law and the competent court in the event of a dispute.

Incoterms (International Commercial Terms) are internationally standardised trade clauses issued by the International Chamber of Commerce (ICC). They define delivery terms in international trade, particularly regarding the allocation of costs, transfer of risk, and the responsibilities of the contracting parties with respect to the delivery of goods.

Incoterms can be freely agreed upon in the contract.

Examples of Incoterms include EXW (Ex Works), FCA (Free Carrier), DDP (Delivered Duty Paid), and FOB (Free On Board).

The Incoterms rules include the following clauses:

• EXW (Ex Works)
• FCA (Free Carrier)
• CPT (Carriage Paid To)
• CIP (Carriage and Insurance Paid To)
• DAP (Delivered at Place)
• DPU (Delivered at Place Unloaded)
• DDP (Delivered Duty Paid)
• FAS (Free Alongside Ship)
• FOB (Free On Board)
• CFR (Cost and Freight)
• CIF (Cost, Insurance and Freight)

In total, there are eleven Incoterms clauses. Four of them—FAS, FOB, CFR, and CIF—are intended exclusively for sea and inland waterway transport.

EXW (Ex Works): Under this clause, the buyer is responsible for collecting the goods at the agreed location. The buyer must handle all formalities related to export and import, as well as arrange and pay for transportation and, if desired, insurance.

The seller, on the other hand, is only required to make the goods available for collection at the agreed place (typically the seller’s premises or warehouse).

DDP (Delivered Duty Paid): Under this clause, the seller must make the goods available for collection at the agreed destination. The seller is responsible for completing all export and import formalities, covering all transport costs to the named place of destination, and paying all applicable import duties and taxes.

The buyer, in turn, is only required to collect the goods at the agreed destination.

The chosen Incoterms clause determines whether—and which—transportation costs must be added to or deducted from the customs value (i.e. the invoice price).

The place of performance can be determined by contractual agreement, for example through the use of Incoterms clauses.

In the absence of such an agreement, the place of performance is governed by the applicable substantive law—such as the UN Convention on Contracts for the International Sale of Goods (CISG) or, if German law applies, the provisions of the German Civil Code (Bürgerliches Gesetzbuch – BGB).

An international sales contract should include a detailed description of the goods, including provisions on packaging and required documentation. Payment terms—such as advance payment, instalments, or bank guarantees—should also be clearly defined, along with a delivery clause (e.g. an Incoterms clause).

Warranty and liability provisions are particularly important. These may include exclusions of warranty or limitations of liability, provided they comply with applicable legal requirements.

In addition, international sales contracts often contain clauses on termination or withdrawal—especially in the case of framework agreements.

Finally, a severability clause should be included to ensure the contract remains valid even if individual provisions are found to be unenforceable.

If individual clauses in an international sales contract violate mandatory provisions of the applicable law—particularly when included in standard terms and conditions—they may be deemed invalid. This can render warranty exclusions, limitations of liability, payment terms, penalty clauses, choice of law provisions, and similar terms unenforceable.

In addition, important legal aspects may be overlooked, where express regulation in the contract would be beneficial to the parties.

Choice of law clauses play a crucial role in international sales contracts, as they determine which legal system will govern the contract. This can have a significant impact on the parties' rights and obligations—and may also influence the overall cost and legal risk of the transaction.

The international jurisdiction of German courts is determined in accordance with the provisions of the German Code of Civil Procedure (Zivilprozessordnung – ZPO), unless overriding international agreements—such as the Brussels Ia Regulation (Regulation (EU) No. 1215/2012)—apply.

In sales contracts, international jurisdiction may also be established by a valid jurisdiction clause or by the agreed place of performance.

The court must examine its international jurisdiction ex officio (on its own initiative) at any stage of the proceedings. Actions brought before a court lacking international jurisdiction will be dismissed as inadmissible.

Jurisdiction clauses in an international sales contract can determine which country’s courts shall have international jurisdiction over disputes arising from the contract.

Such clauses must be expressly agreed and are often included in standard terms and conditions (T&Cs).

The validity of a jurisdiction clause depends on the legal requirements of the applicable law.

Arbitration agreements play an important role in international sales contracts, as they offer an efficient and cost-effective alternative to state courts for resolving disputes.

Arbitral awards are generally easier to enforce internationally, thanks to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

There are various arbitral institutions, each with its own set of arbitration rules. For example, the International Court of Arbitration (ICC), based in Paris, is one of the leading institutions for international commercial arbitration.

In addition, the German Institution of Arbitration (DIS) offers arbitration services for both domestic and international disputes.

Other well-known arbitral bodies include the Swiss Chambers’ Arbitration Institution (SCAI), the American Arbitration Association (AAA), and the International Centre for Dispute Resolution (ICDR), among others.