Contract Design and Negotiation

We draft, review, and negotiate national and international contracts. In doing so, we combine legal precision with economic feasibility — a contract that cannot be applied in day-to-day business is of no use to anyone.

The Four Questions at the Beginning

In every cross-border contract, four key decisions precede all substantive regulations: Which law applies? Who decides in case of a dispute? In which language is the contract authoritative? And which version prevails if two language versions differ?

These questions may seem formal but often determine the outcome. A choice of law in favor of German law is of little help if a Turkish court is to have jurisdiction and must first ascertain foreign law through experts. Therefore, we coordinate the choice of law, jurisdiction, and language instead of negotiating them separately.

When UN Sales Law Applies — Even Unasked

Germany and Turkey are both contracting states of the UN Sales Law. Therefore, in a sale of goods between companies from both countries, it automatically applies unless the parties expressly exclude it. This is no small matter: The UN Sales Law has its own rules regarding defect complaints, contract termination, and damages, which differ significantly from German sales law.

We consciously decide this question — for or against its application — instead of leaving it to chance. In many supply relationships, the UN Sales Law provides a better foundation because it does not favor either party.

General Terms and Conditions

German law strictly controls pre-formulated contractual terms, even between businesses. Limitations of liability, contractual penalties, prohibitions on set-off, and automatic extensions often do not withstand this scrutiny — with the result that the law takes their place, which is often less favorable than a moderate clause would have been.

A second point, often underestimated in practice: If both parties refer to their own terms, according to German law, usually neither is fully applicable. Those who rely on their terms being agreed upon because they were on the back of the order confirmation are often mistaken.

Typical Scenarios

The Framework Supply Agreement. Price adjustment, minimum purchase, quality assurance, liability for production downtime at the client — here, the wording determines millions. Particularly, the price adjustment clause requires care: It must describe the adjustment criteria in such a way that they are verifiable.

The Commercial Agency Agreement. Under German law, a commercial agent is entitled to a compensation claim at the end of the contract, which can hardly be excluded contractually. Those who do not account for this item may face an expensive surprise at the end of the collaboration.

The Letter of Intent. A Letter of Intent is supposed to be non-binding — but it is not automatically so. Confidentiality, exclusivity, and cost-bearing obligations are regularly binding, and those who terminate negotiations without good reason may be liable for the other party's wasted expenses.

Securities and Payment Processing

In German-Turkish trade, it is often not the liability clause that determines the risk, but the payment processing. Advance payment, documentary credit, bank guarantee on first demand — each instrument distributes the risk of default differently and costs varying amounts. With letters of credit, it is added that banks only check the documents: A formally incorrect submission can halt payment, even though the goods were delivered without issue.

We align the payment terms with the delivery clauses. Those who agree on Incoterms without checking when risk and costs transfer have two clauses that do not match in the event of damage.

In Negotiation

We accompany negotiations ourselves instead of just providing drafts. Before the meeting, we clarify which points are negotiable and which are not, and in what order they should be addressed. Concessions on secondary points can be made early; liability, termination, and dispute resolution should be left to the end when both sides are invested.

In bilingual negotiations, we also ensure that both versions convey the same message. Translation errors in contractual documents are more common than one might think — and they only become apparent in case of a dispute.

Related to This Consultation

Contract design is a form of preemptive dispute resolution. We draft clauses with an eye toward how they can be enforced later, coordinate the dispute resolution clause with the chosen legal system, and involve the relevant specialized advice in distribution, construction, and investment contracts.