BASIC CLAUSES “General conditions of sale without double signature”

Luca Davini
Lawyer in Milan and Turin


Before an international sale is completed, the seller and the buyer normally negotiate and exchange various documents with each other which may consist, for example, of an offer from the seller, an order from the buyer and a final order confirmation sent by the seller to the buyer.

These documents are very often not signed, nor are they expressly accepted by the party that received them but are instead always followed by conclusive conduct, for example: a) the buyer sends a purchase order and the seller sends the goods, or b) the seller sends the order confirmation and the buyer pays a deposit on the price.

This method of conclusion of the contract is very frequent and is legally defined as acceptance for conclusive facts and in commercial practice it also happens that the documents exchanged between the parties have clauses in contrast with each other.

In these situations, economic operators have doubts about the rules applicable to the sale and about which court is competent to resolve any possible disputes.

Three possible options

To prevent such kind of economic conflicts with the partner, the ideal solution is to regulate the conclusion of an international sale – using the typical tools used by medium-large companies in all commercial sectors, such as general conditions of sale, accepted order confirmation or an ad hoc contract.

The general terms and conditions of sale are useful when seller and buyer finalize different sales with each other over time, negotiating from time to time only the special “conditions” of the contract, such as, for example, quantities, prices and delivery terms; it is a working tool that allows you to operate within a certain legal framework and to minimize company bureaucracy.

For all other conditions, for example, those relating to the mode of return of the goods, the passage of risk, payment, conformity of the goods, warranty, applicable law and dispute resolution, the parties may refer to the general conditions of contract of one or the other party.

To avoid doubts or disputes on their applicability, the general conditions of sale must, however, be signed or at least expressly accepted by both parties.

Just formal requirement

A typical problem concerning the validity of the general conditions consists, then, in the burden of verifying whether it is necessary to supplement the requirement of specific approval, the so-called double signature, provided for in Article 1341 of the Civil Code, especially for those vexatious clauses which, despite the good faith of the person who prepared them, determine a significant imbalance of the rights and obligations deriving from the contract.

According to our case law this is a requirement of form and, on the basis of Article 11 (2) of Regulation EC/593/2008 it is considered sufficient that the law of the country of the counterparty does not provide for the requirement of double signature or other strict requirement to avoid the application of Article 1341 and therefore the double signature of acceptance.

On this point, it is specified that where international sales are regulated by the Vienna Convention of 1980, which provides for freedom of form, the application of the double signature should be excluded.

Order confirmation

The order confirmation is another typical working tool of commercial practice used to conclude international sales contracts.

In practice it is often used and defined as a final “proforma invoice”, as a document that closes negotiations and that provides within it only the typical elements of a formal invoice (references of the parties, unit and total price of products, payment, deadlines, return of goods, etc.), with the aim of facilitating communication between the parties.

This, however, in a legal context and the protection of its business must be used only after the signing of the general conditions, as seen above, to regulate the essential points of the single sale (price, delivery date) in the context of an ongoing relationship (for example, supply) or, alternatively, if the general conditions of sale have not been signed, it can be used to protect the economic operation by adding specific protection clauses.

The protection clauses concern in particular: the return of the goods (risk of travel and loss/ deterioration), the parameters of conformity of the goods, the guarantee in case of defects, payment and guarantees on the risk of non-payment, the retention of title, the applicable law and dispute resolving methods.

The order confirmation must be expressly accepted by the contractual partner, taking into account what is written in the form of the previous paragraph.

The practical advantage of this tool is the greater ease of acceptance by the contractual partner for its simplicity and clarity; on the other hand, it requires an internal company procedure to be applied to each sale (sending confirmation and request for acceptance to proceed with the fulfilment of the order).

“Ad hoc” contract

A further working tool is the so-called “ad hoc” contract for the single economic operation.

In this case, to operate the correct legal framework of the operation, it will be necessary to contact a legal expert in international contracts in order to propose to the commercial partner an appropriate contract, taking into account their commercial and marketing objectives.

The ad hoc contract may be said to be validly concluded by signing at the bottom of the contract by the seller and the buyer, which may take place simultaneously or at different times, but paying attention to the ability to stipulate the contract of the subjects who sign, so-called “ability to contract”.

This capacity shall be verified in accordance with the applicable national law on a case-by-case basis together with the Vienna Convention (i.e. according to the law applicable to the contract chosen by the parties or according to the law applicable to the contract in the absence of choice).

The decision on which instrument to use, among those examined, for the purpose of concluding an international sales contract depends on the specific case to be regulated, the internal company organization, the type of customers and the level of protection that one wants to obtain for his/her business.

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Marcello

Dear Aurelia, the information you have provided are not sufficient for an answer which is subject to a professional engagement. In any case, we should study the provisions of the contract and identify governing law of the contract.If it does not provide anything on governing law then conflict law shall apply (in the most part of the countries likely the governing law will be the law of the country where the agent is domiciled). best regards Marcello Mantelli

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Aurelia

I signed a contract with a fashion agency but there were no termination clauses in the contract and decided to withdraw it before one week after signature so sent them an email but after 14 days they sent me an email and asserted that because i didnt withdraw in legal deadlines i have to perform the contract and pay whole money.Noboday told me about any deadlines and nothing was in the contract!! Why did they claim such a thing?

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