On 12 May 2026, a Chinese coil winding manufacturer tells its customer in Lyon, a mid-sized company that makes electric motors for agriculture, that it is suspending production of a 40,000-piece order until the price goes up by 38%. The order was placed in March, FOB Ningbo, for delivery on 30 June. Within three weeks, the purchasing department finds a Vietnamese manufacturer that delivers six weeks late and 22% more expensively; the end customer applies its penalties; and an audit commissioned by another customer reveals that one of the Chinese supplier’s subcontractors appears on a list of companies suspected of using forced labour. Each of these decisions looked like common sense. None of them rested on a legal analysis, and several of them weakened the company’s position.
This page maps the legal risks of an international supply chain from the point of view of a company that buys outside France: the law that actually applies, the remedies against a defaulting supplier, the line between force majeure and a mere rise in costs, how transport and customs risks are allocated, the EU compliance obligations that cannot be passed on to the supplier, ending the relationship, and choosing the court. Each point links to a more detailed analysis where the firm has published one.
1. The applicable law is almost never the one you think
Most French buyers believe they are buying under French law, because their general terms of purchase say so. That is rarely accurate. Between a French company and a supplier established in China, Germany, Italy, Turkey, Vietnam, Japan or the United States, the United Nations Convention on Contracts for the International Sale of Goods of 11 April 1980, known as the Vienna Convention or CISG, applies automatically: it covers sales between parties whose places of business are in different States when those States are Contracting States (CISG, Art. 1(1)(a)). Nobody has to choose it. It has been in force in France since 1 January 1988.
A clause stating that “French law applies” does not exclude it, since the Convention is part of French law. Only an express exclusion, accepted by the supplier, sets it aside (CISG, Art. 6). It also covers contracts for goods to be manufactured, unless the buyer supplies a substantial part of the materials (CISG, Art. 3(1)), which brings most industrial subcontracting within its scope.
For what the Convention does not govern (the validity of clauses, property in the goods, limitation periods), a court in an EU Member State applies the Rome I Regulation, under which, absent a choice, a sale of goods is governed by the law of the country where the seller has its habitual residence (Regulation (EC) No 593/2008, Art. 4(1)(a)). The Lyon buyer, with no valid clause, is therefore subject to Chinese law for everything outside the Convention. Two States remain outside the Vienna system and regularly catch buyers out: the United Kingdom and India, which are not parties to the Convention.
Then comes the battle of the forms. The buyer’s terms of purchase and the supplier’s terms of sale almost always contradict each other, and the Convention treats that conflict as a question of contract formation: an acceptance that materially alters the offer, in particular as to price, delivery, liability or dispute settlement, is a counter-offer (CISG, Art. 19). A buyer that lets invoices carrying conflicting terms pile up without reacting runs the risk that those terms become the law of the relationship. The firm’s analysis of the international sale of goods and the contract that really binds you looks at this mechanism in detail.
The practical consequence is simple and almost never applied: a strategic supplier is onboarded with a framework agreement signed by both parties, which chooses the applicable law knowingly. Excluding the Convention in favour of domestic French law is not always a gain for the buyer, either. The Convention was designed for international sales, judges and arbitrators around the world know it, and its rules on avoidance and substitute purchases are clear. What costs money is not choosing one law over another; it is not choosing at all. A purchasing relationship left without a signed clause always ends up governed by a stack of rules nobody wanted: the Vienna Convention for formation and remedies, the seller’s law for the validity of clauses and limitation, the general terms of whoever sent the last document for everything else, and a court designated by the place of delivery set by an Incoterm chosen out of habit. That stack is discovered piece by piece at the precise moment when the company needed to know within hours whether it could avoid the contract, withhold a down payment or order elsewhere. The cost of that discovery is counted in weeks.
2. When a supplier stops delivering, the order of steps decides everything
When a foreign supplier stops delivering, the commercial reflex is to find another source immediately. The legal reflex has to come a few days earlier, and those few days decide what compensation is available.
Under the Vienna Convention, the buyer can declare the contract avoided in only two cases. Either the failure amounts to a fundamental breach, meaning it substantially deprives the buyer of what it was entitled to expect under the contract (CISG, Art. 25 and 49(1)(a)). Or the supplier has not delivered within the additional period of reasonable length that the buyer fixed for it (CISG, Art. 47 and 49(1)(b)). In both cases, avoidance is effective only if notice is given (CISG, Art. 26). An email that “takes note of the difficulties” avoids nothing.
When the supplier announces in advance that it will not deliver, as the Ningbo supplier did, the buyer may avoid without waiting for the due date (CISG, Art. 72). If it merely doubts the supplier’s ability to deliver, it may suspend its own obligations, for example payment of a down payment, provided it gives notice immediately (CISG, Art. 71). The French Civil Code has similar mechanisms, anticipatory suspension and termination by notice after formal notice (French Civil Code, Art. 1220 and 1226), but they apply only if domestic French law governs the contract.
Only once the contract has been avoided does the substitute purchase have its full effect: a buyer that makes one in a reasonable manner and within a reasonable time recovers the difference between the contract price and the price of the replacement, in addition to other damages (CISG, Art. 75). Made before avoidance, the same purchase is no longer a substitute within the meaning of that provision, and its cost has to be argued on the less certain ground of general damages. The sequence, notice first and purchase second, is not a formality. It is the rule.
Damages themselves have two limits. They cover only what the supplier foresaw or ought to have foreseen when the contract was concluded (CISG, Art. 74), which rules out the end customer’s penalties if the supplier did not know they existed. And they are reduced by the loss the buyer could have avoided through reasonable measures (CISG, Art. 77). The analysis Foreign supplier stops delivering: avoidance, substitute purchase and damages goes through these steps one by one.
3. Force majeure and rising costs: the most expensive confusion
When a foreign supplier pleads force majeure, nine times out of ten it is really talking about a rise in its costs. The law rarely treats that as force majeure.
Under French law, force majeure requires an event beyond the debtor’s control, which could not reasonably have been foreseen when the contract was concluded, whose effects cannot be avoided by appropriate measures, and which prevents performance (French Civil Code, Art. 1218). The Vienna Convention likewise requires an impediment beyond the debtor’s control that it could not reasonably be expected to have taken into account, avoided or overcome (CISG, Art. 79(1)). And where the failure is due to a subcontractor, the supplier is exempt only if the subcontractor would be exempt as well (CISG, Art. 79(2)). A supplier whose copper has gone up by 40% is not prevented from delivering. It is prevented from making money by delivering.
Since 2016, French law has recognised hardship (imprévision): a party facing an unforeseeable change of circumstances that makes performance excessively onerous may ask for renegotiation, must continue to perform while it takes place and may, failing agreement, ask the court to revise or end the contract (French Civil Code, Art. 1195). The Vienna Convention has no equivalent rule, and the prevailing view among the courts of the Contracting States refuses to treat mere onerousness as an impediment under Article 79. Between a French buyer and a foreign supplier subject to the Convention, a rise in costs is therefore a legal issue only if the contract made it one.
The reverse is worth reminding buyers of. A debtor bound to pay a sum of money cannot escape that obligation by pleading force majeure (Cass. com., 16 September 2014, No. 13-20.306), and a creditor prevented from benefiting from the performance cannot obtain termination on that ground (Cass. 1re civ., 25 November 2020, No. 19-21.060). A buyer that can no longer sell the goods on does not get out of paying for them that way.
The answer lies in drafting: a hardship clause with an objective threshold, a renegotiation procedure during which deliveries continue, and a way out if it fails. Better still, an indexation clause tied to a published index, which avoids renegotiation altogether. The UNIDROIT Principles of International Commercial Contracts define hardship (UNIDROIT Principles 2016, Art. 6.2.2 and 6.2.3) and the International Chamber of Commerce publishes model force majeure and hardship clauses, but neither applies unless it has been chosen. The firm’s page on international contracts sets out the support it offers on these clauses.
4. Incoterms, transport and customs: who carries which risk
The ICC’s Incoterms 2020 apply only because the contract refers to them. They fix the point of delivery, the moment risk passes, and how costs and customs formalities are shared. They say nothing about the transfer of ownership, the price or remedies for non-conformity. Without an Incoterm, the Vienna Convention passes risk to the buyer when the goods are handed over to the first carrier, where the sale involves carriage (CISG, Art. 67(1)).
Choosing an Incoterm is a risk decision, not a logistics habit. Under FOB or FCA, the buyer bears the risks of the main carriage and must insure it itself. Under CIF or CIP, the seller pays for freight and insurance, but risk passes at departure, and the buyer has only the insurance taken out on its behalf, whose minimum level differs between the two rules. A ship diverted via the Cape of Good Hope is, in both cases, the buyer’s problem. The firm’s analysis of the Red Sea and maritime deviation shows that such a delay is not necessarily wrongful, or compensable.
DDP deserves a particular warning. It looks comfortable for the importer, since the seller bears all costs up to destination, customs clearance included. But the foreign seller then declares the goods to customs in the EU through a representative the buyer did not choose, and the declared origin, tariff classification and value are entirely outside the control of the company that will place the product on the market. When the customs authorities challenge the declaration, or when the product falls under an anti-dumping duty or a compliance measure, the whole chain seizes up, and the buyer suffers the consequences without controlling a single link.
The page on Incoterms and international sales and the analysis of the 2026 EU customs reform complete this point.
5. EU compliance: the risk that cannot be passed on
This is the deepest change of the last three years, and it alters the very economics of the purchase contract. The EU has adopted regulations that judge a product by the conditions under which it was made upstream, and that place the obligation on the operator who puts it on the EU market or exports it. No clause can shift that obligation onto the supplier.
Regulation (EU) 2024/3015 of 27 November 2024 prohibits economic operators from placing or making available on the EU market, or exporting, products made with forced labour (Regulation (EU) 2024/3015, Art. 3). It applies from 14 December 2027, with no size threshold and no sector restriction. The competent authority first sends questions to operators, who have 30 working days to reply (Art. 17), and may then order the prohibition, withdrawal and disposal of the products (Art. 20).
Regulation (EU) 2023/1115 on deforestation makes the placing on the market of seven commodities (cattle, cocoa, coffee, oil palm, rubber, soya and wood) and their derived products conditional on a due diligence statement establishing that they are deforestation-free and legally produced (Regulation (EU) 2023/1115, Art. 3). After two postponements, it applies from 30 December 2026, and from 30 June 2027 for most micro and small enterprises (Regulation (EU) 2025/2650 of 19 December 2025). In its report of 4 May 2026, the Commission ruled out any further amendment of the basic act (COM(2026) 191 final).
For the largest groups, there is also the duty of vigilance arising from the French law of 27 March 2017, now codified in Article L. 225-102-1 of the French Commercial Code, and, in due course, the EU directive, narrowed by Directive (EU) 2026/470 of 24 February 2026 to companies with more than 5,000 employees and 1.5 billion euros in turnover, applicable in 2029. SMEs and mid-sized companies are exposed indirectly: their large customers pass on questionnaires, audits and compliance clauses. Finally, there are international sanctions, which reach a buyer as soon as a supplier, a shareholder, a raw material or an intermediary bank falls within their scope.
The contract does not transfer these obligations. What it can do is give the buyer the means to meet them and to turn against its supplier: information, cooperation and recourse, whose scope and wording depend on the products, the countries of production and the applicable law. The analysis Forced labour and deforestation: what EU regulations require of importing companies sets out these obligations in detail.
6. Leaving a foreign supplier can cost more than keeping it
French law penalises the abrupt termination of an established commercial relationship, and it targets whoever ends the relationship, buyers included (French Commercial Code, Art. L. 442-1, II). The written notice must take into account, in particular, how long the relationship has lasted; eighteen months’ notice rules out any challenge to its length; termination without notice remains possible in the event of non-performance or force majeure. Since 20 August 2026, the same provision also covers a substantial and unusual reduction in order volumes made in the course of a negotiation (Law No. 2026-796 of 18 August 2026).
Can a foreign supplier rely on this provision against its French customer? The answer depends on whether the claim is contractual or tortious, and it is not settled. The Cour de cassation has referred the question to the Court of Justice of the European Union (Cass. 1re civ., 2 April 2025, No. 23-11.456), after reaffirming that the claim is tortious outside the scope of EU law (Cass. 1re civ., 12 March 2025, No. 23-22.051). The Court of Justice has not yet ruled. Prudence therefore calls for behaving as if the provision could be enforced: written notice, proportionate notice, and volumes maintained throughout.
The analysis Ending a relationship with a foreign supplier: notice, abrupt termination and governing law examines how to exit and the scenarios depending on the answer expected from Luxembourg. The page on termination of commercial relationships describes the firm’s work in these cases.
7. Court or arbitrator: choose where the decision will be enforced
A French judgment against a supplier established in China, Turkey or the United States is worth only as much as the prospect of enforcing it where the supplier’s assets are. Between Member States, the Brussels I bis Regulation organises jurisdiction and the circulation of judgments: absent a clause, the buyer may sue before the court of the place where the goods were or should have been delivered (Regulation (EU) No 1215/2012, Art. 7(1)(b)), which, with an FOB or FCA Incoterm, will in principle point to a foreign court.
Outside the EU, international arbitration is often the only route to an enforceable title, thanks to the New York Convention of 10 June 1958 on the Recognition and Enforcement of Foreign Arbitral Awards, ratified by more than 170 States, China among them. Arbitration has a cost, and a clause that requires it for the smallest unpaid invoice backfires on the buyer. A tiered clause, reserving arbitration for disputes above a threshold, is usually a better fit. The firm’s pages on international arbitration and international commercial litigation, and the analysis Exequatur and enforcement of foreign judgments, deal with what comes next.
8. What the company must decide before the next order
The risk map leads to a limited number of decisions, and all of them are taken before the crisis. For each strategic supplier outside France, the company must know which law actually governs the relationship, and must have chosen it in a signed framework agreement. It must have put in writing what the law does not give it: that delivery dates are essential, that downstream penalties exist, a hardship or indexation clause. It must have chosen its Incoterm for risk reasons. For the products concerned, it must have secured the information and audit rights that will let it answer an EU authority within 30 working days. And it must know how to leave the relationship without exposing itself to a claim for abrupt termination.
None of these decisions is expensive when taken calmly. All of them become expensive in an emergency. That is the whole point.
How the firm can help
The firm advises on international trade law: auditing purchase contracts, handling the default of a foreign supplier and the disputes that follow. You can tell us about your situation.
Frequently asked questions
My general terms of purchase choose French law: is the Vienna Convention excluded?
No. The Vienna Convention has been part of French law since its ratification, and it applies automatically to sales between parties established in Contracting States (CISG, Art. 1). Choosing French law therefore makes it applicable, for the matters it governs, rather than excluding it. Only an express exclusion, for example “excluding the Vienna Convention of 11 April 1980”, accepted by the supplier, has that effect (CISG, Art. 6). And the general terms of purchase must actually have been accepted, which the counter-offer rule often makes uncertain when the supplier has replied with its own terms.
Is a supplier established in the United Kingdom subject to the Vienna Convention?
Not directly. The United Kingdom is not a party to the Convention, so it does not apply under Article 1(1)(a). It may still apply if the conflict rules point to the law of a Contracting State, for example French law chosen by the parties (CISG, Art. 1(1)(b)). Absent a choice, the Rome I Regulation designates the seller’s law (Regulation (EC) No 593/2008, Art. 4(1)(a)), that is, English law, which ignores the Convention and treats penalty clauses and termination very differently. Hence the value of an express choice of law with these suppliers.
What is the difference between FCA and FOB for a buyer importing by container?
FOB is reserved for sea transport and passes risk when the goods are on board the vessel at the port of shipment. FCA passes risk when the goods are handed over to the carrier nominated by the buyer, often at the terminal or at the seller’s warehouse. For containerised goods, delivered to the terminal several days before loading, FCA better matches reality: under FOB, the goods remain at the seller’s risk even though they are already out of its control, which muddies the evidence if they are damaged. Both rules leave the main freight and its insurance to the buyer.
Can my supplier cite the duty of vigilance or the CSRD to refuse to share its information?
No, but it can refuse what the contract does not oblige it to provide. Those texts create obligations for large companies, not rights to information for their customers or suppliers. The forced labour regulation, for its part, requires the importer to answer the authority within 30 working days (Regulation (EU) 2024/3015, Art. 17), without giving it any power to compel the foreign supplier to answer. Only an information and audit clause, with a deadline and a contractual sanction, fills that gap.
Who pays anti-dumping duties on goods bought DDP?
The seller, in principle, since DDP puts import duties and taxes on the seller. But the debtor of the customs debt is the declarant, together with the person on whose behalf the declaration is made. If the declaration is made on the buyer’s behalf, the buyer is the one the customs authorities will pursue. And if the foreign seller, liable under the contract, has no assets in Europe, the reimbursement promised by the contract will remain theoretical. Where anti-dumping risks exist, DAP with customs clearance handled by the buyer, who controls its own declaration, is often safer.
In the same series, the analyses that develop each of these risks: Foreign supplier stops delivering: avoidance, substitute purchase and damages, on the buyer’s remedies against a defaulting supplier; Forced labour and deforestation: what EU regulations require of importing companies, on the compliance that cannot be passed on; Ending a relationship with a foreign supplier: notice, abrupt termination and governing law, on leaving the relationship.