Law applicable to international commercial purchases

international sale lawyer

A problem that often arises is the following: Spanish company sells to another company eg Dutch some merchandise. When receiving the goods, the Dutch refuses to pay for it says that the merchandise is defective How to solve this conflict?

In private international law There are basically three issues that distinguish:

1.- which courts are competent.

2.- which law applies.

3.- how to recognize and enforce foreign judgments.

In this post we will see essentially the applicable law.

The first question that arises is what is the law applicable to the obligations under the contract of sale. Very often we find that not stated what law to apply to contract.

We must distinguish in the case that both countries are EU or non-.

In the event that any country is Community, as in the example given at the beginning, be applied in the EC Regulation n ° 593/2008 European Parliament and the Council of 17 June 2008 on the law applicable to contractual obligations (Roma I): First, states that apply the law chosen by the parties. Normally takes place as, Article 4 established by applicable law in the absence of choice:

a) The contract of sale of goods by the law of the country where the seller has his habitual residence shall be governed.

b) The contract for the provision of services by the law of the country where the service provider has his habitual residence shall be governed.

c) The contract having as its object a real property right or lease of real property by the law of the country where the property is situated shall be governed.

d) (….)

and) The franchise agreement by the law of the country where the franchisee has his habitual residence shall be governed.

f) The distribution contract by the law of the country where the distributor has his habitual residence shall be governed.

g) (….)

h) (….)

(not go into the cases d)g)yf) because it is less common assumptions).

If the contract is not covered by the above, or apply more than one letter, the contract is governed by the law of habitual residence where the party who is to effect the characteristic performance of the contract.

In the event that the law can not be determined under the preceding paragraphs, the contract is governed by the law of the country with which it is most closely.

In the course between Spanish and Dutch buyer seller, Spanish law would apply, because it is the case of paragraph to).

What if a company is extracomunitaria? Consider the following case: Israeli company sells security equipment to a Spanish company. The Spanish company does not pay. The Israeli company sues the company Spanish Spanish court. Article 2 n º of Reglamento 593/2008 says in his article 2: Universal application: "The law designated by these rules apply even if not that of a Member State".

Therefore in this case, although Israel has not signed the Rome Convention, Spain applies because he did.

Overall, regulation we have seen, the legal seguridad al seller, which is usually the most risky: send goods to another country with the hope that they pay. In the case of the buyer, if goods arrive, there may be a loss of profit, but simply do not pay the price, the damage is much lower.

The buyer, have the problem of knowing the time to verify merchandise and report defects, under the laws of the country seller.

In the case of in breach of contract and have to go to court to debt claim, the competent courts shall be those of the country of the defendant, under Spanish law and Regulation (EC) 44/2001 council, of 22 December 2008, but these courts have to apply the law of the country of residence of the seller. This complicates things quite a bit ...

In conclusion: We recommend that in any international sale expressly agreed the law applicable to the contract.

Consult your case by clicking here.





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