A company sells a consignment of industrial valves to a Brazilian buyer: the order is placed on the buyer’s purchase order form, the confirmation carries the seller’s general terms, the words FOB Le Havre appear, French law is stipulated and the Nantes Commercial Court is designated. Five months later the buyer alleges abnormal corrosion and claims replacement of the consignment and its lost profit. The director believes himself protected. Not one of his certainties survives examination. Six points determine the contract that actually binds him.
1. The Vienna Convention applies although nobody chose it
The United Nations Convention of 11 April 1980 on Contracts for the International Sale of Goods binds ninety-seven States, including France since 1 January 1988, China, the United States, Japan and Brazil. It applies to sales between parties established in different Contracting States, regardless of nationality or of whether the parties are traders (Article 1). It is not an optional supplement to French law: it displaces it for everything it governs. The First Civil Chamber holds that where the parties have not excluded its application, the questions it settles are governed exclusively by its provisions, and quashed a judgment which had decided the case on the footing of liability for defective products (Cass. 1st Civ., 17 May 2023, No 22-16.290).
The practical consequence is that the clause stating that the contract is governed by French law does not exclude the Convention; it confirms it, since the Convention forms part of French law. Excluding it requires an express clause naming the Convention and its date, stating that it is set aside in its entirety including for the formation of the contract, and designating the replacement law. Anything less leaves the parties litigating under a regime they did not realise they had chosen.
2. Failing a clause, a French court does not apply Rome I
Since the Vienna Convention governs neither the validity of the contract, nor the transfer of property, nor limitation, nor the rate of interest (Article 4), the applicable law still has to be determined. Failing a choice, instinct leads to the Rome I Regulation. Before a French court that is a mistake. France is party to the Hague Convention of 15 June 1955 on the law applicable to international sales of goods, which it has never denounced, and the Regulation expressly preserves international conventions to which a Member State was party when it was adopted (Regulation (EC) No 593/2008, Article 25(1)). The Commercial Chamber quashes decisions that dispense with that conflict rule (Cass. Com., 21 June 2016, No 14-25.359).
The difference is not theoretical. The 1955 Convention designates the law of the seller, but switches to the law of the buyer where the order was received in the buyer’s country by the seller, his representative, agent or commercial traveller. A sales representative visiting a customer abroad and taking the order there can therefore, without knowing it, shift the governing law to the buyer’s country, with everything that implies for limitation, retention of title and the rate of interest.
3. The battle of the forms is won at the drafting stage
The seller sends his offer with his general conditions of sale, the buyer replies with a purchase order carrying his conditions of purchase, and the goods are delivered without anyone noticing the contradiction. The Convention treats a reply containing additions or modifications as a rejection of the offer and a counter-offer (Article 19(1)), unless those elements do not materially alter the offer (Article 19(2)). But Article 19(3) deems material any terms relating to the price, payment, quality and quantity of the goods, place and time of delivery, extent of liability and settlement of disputes. Everything that matters is therefore material, and the logic of the text leads to the last shot rule: the terms of the last document sent before performance prevail.
Several foreign courts adopt the opposite knock-out solution, which cancels the conflicting clauses and substitutes the default law. The uncertainty is therefore not only about which set of terms applies but about which method the forum will use to decide. The only reliable answer is procedural: require a signed order confirmation referring expressly to one set of terms, refuse to perform on a document carrying the other party’s conditions, and keep the exchange in an order that can be reconstructed. Companies lose this argument in their order desk, not in court.
4. Examination and notice: the formalities that decide the case
The buyer must examine the goods within as short a period as is practicable in the circumstances (Article 38), then give notice of the lack of conformity to the seller, specifying its nature, within a reasonable time after he discovered it or ought to have discovered it, and in any event within two years of actual handing over (Article 39). Failing that he loses the right to rely on it, save for the reasonable excuse of Article 44, which preserves only the reduction of the price and damages other than loss of profit.
The most frequent confusion concerns the nature of the two-year period. The Commercial Chamber holds that it is a period for giving notice of the defect and not a period for bringing an action, the Convention laying down no limitation period at all (Cass. Com., 26 October 2022, No 20-22.528). A buyer who gave notice in time therefore has the limitation period of the applicable law, which is five years in French law. Conversely a buyer who says nothing for eight months while negotiating amicably may find the notice unreasonable, and lose a claim that was sound on the merits.
5. The Incoterm does not make the contract, but it chooses the court
The version in force remains Incoterms 2020, and a contract concluded in 2026 must refer to it expressly. The rule chosen determines four things: the point of delivery, the transfer of risk, the allocation of costs and the burden of customs formalities. It does not transfer property, designates neither the law nor the court, and says nothing about the price or payment. Using FOB, CFR or CIF for a containerised shipment is a widespread error, those rules being reserved for conventional maritime carriage: the goods are handed over at the terminal several days before loading, so the stipulated transfer point corresponds to no real operation.
The Incoterm nevertheless produces an effect drafters underestimate. In matters relating to the sale of goods the claimant may sue in the courts for the place where, under the contract, the goods were delivered or should have been delivered (Regulation (EU) No 1215/2012, Article 7(1)(b)), and the Court of Justice held that the court must examine all the terms of the contract capable of identifying that place, Incoterms included (Electrosteel Europe, C-87/10). Three letters chosen by the logistics department therefore decide, two years later, in which country and in which language the dispute will be heard.
6. The contract has become an instrument of regulatory compliance
No international sale can now ignore the regulatory layer. Union exporters must contractually prohibit their counterparties in third countries from re-exporting certain sensitive goods to Russia, on pain of incurring their own liability (Regulation (EU) No 833/2014, Article 12g). Dual-use goods fall under an authorisation regime that is regularly updated (Regulation (EU) 2021/821). The carbon border adjustment mechanism has been in its definitive regime since 1 January 2026, with a single threshold of fifty tonnes per importer per year (Regulations (EU) 2023/956 and (EU) 2025/2083), and the deforestation regulation will apply to large and medium-sized companies from 30 December 2026 (Regulation (EU) 2023/1115).
Customs duty, finally, has become a contractual variable again. Under DDP the seller alone absorbs a tariff shock; under DAP or FCA it falls on the buyer; but no rule says what happens when a duty is created or increased between signature and delivery. That is a matter for an express clause allocating the risk of a change in duties, alongside the sanctions clause and the compliance representations. A sale contract drafted five years ago almost certainly says nothing about any of this.
Do your export contracts still reflect the law that actually governs them? The firm reviews the sale documents, the terms, the Incoterm and the compliance clauses together.
Further reading: the Vienna Convention and how to exclude it, Incoterms 2020 and the transfer of risk, documentary credit discrepancies, governing law and jurisdiction clauses.
Written by Hervé Guyader, avocat at the Paris Bar, doctor of law. This content is general information and is no substitute for advice on your own matter.