Part 1: are you utilising the benefits? Are you aware of the risks?
‘General Terms and Conditions’ (GTCs) can be an important and useful instrument in terms of international business transactions if they are used consciously and with a degree of knowledge regarding the various national regulations. Adapted to the individual needs of your business, GTCs not only help you to avoid recurring negotiations for the same legal issues, but also aid in enforcing regulations which are favourable to you. However, especially in international business relations, you need to know any differences in legal systems.
This series of short articles is intended to help you familiarise yourself with the differences in general Lithuanian-German terms and conditions and to point out as helpful or problematic those issues which we repeatedly encounter in our practice.
It is often of little help to Lithuanian companies in their business relationships with German companies simply to use standard terms and conditions without really adapting them to their more specific needs.
Important points which should be considered here include the following:
- Do I apply the GTCs to businesses or consumers
- Should I use the same GTCs for national and international legal transactions or perhaps have separate sets of GTCs?
- Which legal acts should be applied and for which reason, or perhaps only to a certain area such as security rights, because the opposing legal system is more favourable for me
- Would it be favourable to have my general terms and conditions and my business relationship to be subject to the ‘UN Convention on Contracts for the International Sale of Goods’?
- Which place of jurisdiction really makes sense for my company in the event of a dispute?
- How do I most effectively secure my claims within the framework of the GTC
- Are all of my clauses really effective or is one or another perhaps surprising or invalid?
- Have I provided regulations for all of the important points in the GTCs, are the individual clauses clear, and are they free of the possibility of raising any doubt?
- Which regulations are specific to my sector of business such as, for example construction or transport, and which differ from other business sectors?
- When and how do I have to refer to my GTCs so that they become part of my contracts?
- Finally, what happens if my business partner also uses GTCs? How can I be sure that my GTCs and not those of the other party will apply?
These and many other points should carefully be considered when drafting GTCs, especially in international business relationships, such as German-Lithuanian relationships. A failure to take this into consideration may mean that general terms and conditions can, in a specific situation, deliver more disadvantages than advantages.
In the following articles we will take a closer look at the individual points which have been mentioned above, and will explain the differences between German and Lithuanian GTC laws.
If you have any specific questions about your individual terms and conditions, please contact us and we will be happy to provide you with customised support.