Battle of forms: which standard terms apply?
In cross-border contracts it is not always clear which court has jurisdiction in case of a dispute. To avoid this, companies include a forum-selection or jurisdiction clause in their contracts or standard terms, stating that all disputes will exclusively be resolved in a particular court. Sometimes both parties hold (conflicting) terms in which different courts are appointed. This is called “Battle of forms”. In a recent case a Dutch Court had to decide whether the standard terms of the Dutch Company applied. Dutch contract lawyer Marco Guit explains.
Vienna convention (CISG) requires clear reference to and availability of standard terms
The question of whether standard terms have been effectively incorporated into the contract is governed by the Vienna Convention on Contracts for the International Sale of Goods or CISG (the UN Convention). First, the offeror’s (in this case the Dutch company) intention to incorporate its standard terms must be apparent to the recipient (the client); this will generally require a clear and understandable reference to those standard terms. Second, the offeror must transmit the text of the standard terms to the recipient or make it available otherwise.
Standard terms of Dutch company do apply
The Court believed the Dutch company complied with both these requirements: on many occasions the Dutch company referred to its terms and conditions and the reference is made in 3 different languages (among which the clients language, German) and, while parties have been doing business for years, the German client has never before contested these standard terms.
Dutch court: jurisdiction clause meets criteria set out in EEX-Regulation
Regarding the forum-selection clause, the Court ruled this clause met the applicable European criteria (set out in EEX Regulation or “Brussels II”): the clause conferring jurisdiction shall be (a) either in writing or (b) in a form which accords with practices which the parties have established between themselves or (c) in a form which accords with a usage of which the parties are or ought to have been aware and which in such trade or commerce is widely known to.
Consult a Dutch lawyer
To avoid disputes about standard terms, terms and conditions (T&C) and jurisdiction clauses, it is of great importance to invest in setting up good standard terms which fit the company’s practice. We can help you setting up bespoke terms and conditions or revise your old ones.