Exporter disputes come down to six situations: the unpaid invoice, the refusal of the goods, the late conformity claim, the refusal of the documentary credit, abrupt termination by the partner and the distributor who stops paying. Each has its answer, its deadlines and its traps, and each is prepared in the contract. This page presents them and points to the steps to take in each.
The firm’s pages on international sales, Incoterms, documentary credits, governing law, exequatur, sanctions and customs set out the rules. The pages gathered here start from the other end: from a situation, as the exporter lives it on a Tuesday morning opening an email. The customer does not pay. The customer refuses the container. The customer discovers a defect eight months later. The bank refuses the documents. The partner of ten years stops ordering. The distributor withholds the price and invokes the agreement. Each of these pages says, in order, what to do in the first days, what the law allows you to obtain, before which court, within what time, and what should have been in the contract. They can be read alone. They read better together, because the six situations share three questions: which law governs the transaction, which court may hear it, and where the other party’s assets are.
What the six situations have in common
The first question is that of the applicable law, and it has an answer many exporters ignore: the Vienna Convention of 11 April 1980 governs as of right sales of goods between a French seller and a buyer established in another Contracting State, unless expressly excluded, and a clause designating French law designates the Convention, not the Civil Code (Cass. com., 13 September 2011, no. 09-70.305). Its rules on notice periods, avoidance by simple declaration, preservation and resale of the goods, damages calculated on the resale price or the current price, are those that govern four of the six situations. An exporter who pleads the Civil Code against a German or Chinese buyer pleads beside the point.
The second question is that of the court. Within the European Union, the contract clause prevails (Regulation (EU) No 1215/2012, art. 25), and, failing that, the court of the place of delivery of the goods or provision of the services (art. 7(1)), a place fixed by the Incoterm without anyone having thought about it at the order stage. An EXW or FCA sale from France gives the French court; a DAP sale at the customer’s premises gives the customer’s court. Outside the Union, the French court’s jurisdiction is only worth having if its judgment can be enforced where the debtor has assets, which often argues for arbitration.
The third question is that of assets. A title against a debtor who has nothing, or whose assets cannot be located, is worth nothing. Protective measures, freezing of accounts within the Union by the European order under Regulation (EU) No 655/2014, conservatory attachment in France, reclaiming stock under retention of title, holding on to the bills of lading, are decided before the writ, and often produce the effect the writ would not have had.
My foreign customer does not pay
This is the most frequent situation and the worst handled, because the exporter chases for months before asking where he can act. The page on the foreign customer who does not pay gives the method: read the contract and the general terms to find the jurisdiction clause, identify the court of the place of delivery failing that, use the European order for payment for undisputed claims, freeze the accounts before suing, and quantify what is owed, penalties and recovery indemnity included. The time limit is five years before the French courts, often less abroad.
My foreign buyer refuses the goods
The container has arrived and the buyer writes that he will not take it, because the market has fallen or because his own customer has withdrawn. The page my foreign buyer refuses the goods explains that the first emergency is the goods, not the dispute: put them in safety at the buyer’s expense, have their condition recorded, resell them after notice, then claim the price difference and the costs. It also shows that the Incoterm decides whether the refusal is legitimate, and that the documentary credit, where there is one, is not blocked by a mere refusal from the buyer.
My foreign buyer disputes conformity eight months after delivery
Payment of the last batch is suspended, a counter-invoice for rework costs arrives, and no claim had been made since delivery. The page my foreign buyer disputes conformity eight months later shows that this file is won on time: the buyer had to examine the goods promptly and give notice of the defect, specifying its nature, within a reasonable time, failing which he loses his rights. It sets out the two breaches, the seller’s knowledge of the defect and the reasonable excuse, and the first letter to send, which does not discuss the merits.
The bank refuses my documentary credit
The SWIFT refusal message lists five discrepancies, the goods are at sea, and the buyer offers to waive them against a discount. The page the bank refuses my documentary credit fixes the first task, which is not to examine the discrepancies but to check the refusal itself: five banking days, a single notice, reasons discrepancy by discrepancy, disposal of the documents. An irregular refusal obliges the bank to pay. It then indicates how to dispute unfounded discrepancies, correct and re-present the others, and why control of the bills of lading remains the last lever.
My foreign partner terminates the contract without notice
Eleven years of orders, three and a half months’ notice, a two-line email. The page my foreign partner terminates the contract without notice takes the three questions in order: the court, which depends on the clause or the place of delivery; the law, which decides whether article L. 442-1, II of the French Commercial Code can be invoked against a partner subject to a foreign law, a question the Cour de cassation has referred to the Court of Justice; the loss, measured by the gross margin over the missing notice. It also says, plainly, what a German or Italian judge will make of a French rule of economic public policy.
My foreign distributor stops paying
The exclusive distributor piles up arrears and invokes the distribution agreement to set off. The page my foreign distributor stops paying: where to sue describes the trap of double characterisation: the invoices belong to the sales, hence to the place of delivery, often France; the distribution agreement belongs to services, hence to the distributor’s court. It explains how to sue before being sued, reclaim the stock under retention of title, freeze the accounts, and what the jurisdiction clause should have provided.
The subjects that run through all six
Three subjects recur from page to page. The Vienna Convention, whose application and exclusion govern time limits and remedies. The Incoterms 2020, which fix the transfer of risk and, through the place of delivery, the competent court. And the enforcement of judgments, which decides what a judgment is worth once the border is crossed. To which are added, depending on the country, international sanctions, which can block a payment or a delivery regardless of any fault by the parties, and customs, where a reassessment on origin or value sometimes comes on top of the commercial dispute.
What is prepared in the contract
The six pages end with the same observation: the dispute is won at the order stage. A jurisdiction or arbitration clause suited to the customer’s country, a choice-of-law clause that keeps the Vienna Convention instead of discarding it by reflex, an Incoterm locating delivery in France when jurisdiction is not otherwise settled, a retention of title clause valid in the customer’s country, a claims clause fixing the time and form of notice, a documentary credit reviewed before shipment and confirmed for risk countries, a notice clause in distribution agreements. None of those clauses costs what the absence of one of them costs. The firm’s page on international contracts describes that drafting work, and the page on commercial debt recovery the cases in which the firm intervenes once the dispute has arisen.
You are in one of these six situations, or in one that resembles them? The first decisions are taken within the week. A first conversation settles the applicable law, the competent court and the measure to take before any proceedings.
Frequently asked questions
Which law applies to a sale between a French exporter and a foreign customer [[Q]]
Most often the Vienna Convention of 11 April 1980, applicable as of right between parties established in different Contracting States unless expressly excluded; a clause designating French law designates it (Cass. com., 13 September 2011, no. 09-70.305). The Civil Code applies only if the Convention is excluded or outside its scope.
Before which court should a customer established in the European Union be sued [[Q]]
Before the one designated by the contract clause (Brussels I bis Regulation, art. 25), and failing that before the court of the place of delivery of the goods or provision of the services (art. 7(1)), which the Incoterm often locates in France for an EXW or FCA sale.
Where to start when a foreign customer does not pay or refuses the goods [[Q]]
With locating the assets and securing the goods, before the writ: freezing accounts within the Union through the European Account Preservation Order, reclaiming stock under retention of title, holding the bills of lading, a written notice reserving rights.
Is a French judgment enforceable abroad [[Q]]
Within the Union, without exequatur, on production of a certificate (Brussels I bis Regulation, art. 39). Outside the Union, under bilateral conventions or local law, sometimes not at all; for those countries an arbitral award, enforceable under the 1958 New York Convention, is often a better title.
Which clauses reduce exporter disputes [[Q]]
A jurisdiction or arbitration clause, a choice-of-law clause that keeps the Vienna Convention, an Incoterm locating delivery in France, retention of title valid at the customer’s place, a claims clause fixing the time and form of notice, a confirmed documentary credit for risk countries and a notice clause in distribution agreements.
Written by Hervé Guyader, avocat at the Paris Bar, doctor of law. This content is general information and does not replace legal advice.