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In the sale of consumer goods, where the seller is a business and the buyer is a consumer, consumer protection laws typically require that the goods conform to the requirements set by local law (unless the buyer intends to use the goods for a purpose where the requirement is of no significance). If the goods do not conform, they are considered to be defective. But business-to-business contracts might be different.

Consider a supplier outside the European Union selling machinery to a business buyer in an EU country. Let us assume that the contract specifications do not state what safety standards or requirements are to be followed and that those standards and requirements are different in the seller's country and in the buyer's country. In the country of the buyer, the requirements are mandatory: the machinery must satisfy EU health and safety requirements and national safety at work regulations. If the machinery fails to comply, the authorities can prohibit its use and, if the machinery was intended for resale, force it to be taken off the market. In addition, the party in breach may also be fined or even imprisoned. Must the seller know (or find out) about and comply with these unspecified requirements?[1]

The answer is the typical lawyer's answer: it depends. As between the seller and the buyer, the answer depends on the contract and the applicable law. Here, what the parties have agreed is always the starting point. If the contract is silent as to the safety, marking and other requirements, as in our case, then we need to look into the law applicable to the contract. In a legal assessment, the question is: If the goods sold by a business to a business do not conform with local legal requirements, are the goods defective? Can the buyer refuse to pay, cancel the contract, and claim damages? If the contract is silent and a dispute arises, it may take a long time to find the answers.

Buyers who think that it is self-evident that their country's mandatory product requirements need to be followed even in cross-border trade, even if not specified, may be in for a surprise. According to court rulings and legal literature, the general rule under the Convention on Contracts for the international Sale of Goods (CiSG) is: unless expressly otherwise agreed, the seller cannot be expected to be aware of unspecified local requirements in the country of destination.

The goods do not necessarily need to comply with even mandatory requirements in the country of destination. However, there are exceptions to the rule, which may lead to the seller being expected to know or find out about and comply with unspecified local requirements. Examples include situations in which (1) the same requirements exist in the seller's country as well, (2) the buyer has pointed out the requirements to the seller and has relied and was entitled to rely on the seller's expertise, or (3) the seller knows—or the buyer can assume that the seller knows—the requirements "due to the particular circumstances of the case.” Particular circumstances include contracts where the seller has a branch in the country of destination, the seller has had a business connection with the buyer for some time, or the seller often exports into the country in question.11

So who needs to worry in case of unspecified requirements? This example shows that unspecified requirements that might apply are a problem for everyone involved: the buyer, the seller, and the entire supply chain. They are a problem for requirement engineers, designers, project managers, field engineers, and people in charge of cost and margin. They may develop into a legal problem and dispute. Even if they do not, they present a frequently encountered technical and business problem: How can the seller fulfill (or pass on to its suppliers) requirements of which it is not aware?

If the requirements are not taken into account early enough, rework, delays and additional costs may result before the machinery is considered safe and can be used. Who is responsible for the rework and delays? Wrong question! Instead of asking questions about the consequences, the focus should be on the causes and provide clarity through specific, mutually understood requirements. The cause of the risk can be prevented from happening through cross- [2]

professional collaboration, proper planning, well thought- out requirements recognition and management, and careful contracting at the front end! Experienced manufacturers can help their suppliers and subs to comply, for instance, by providing training and easy-to-read guidance on safety-related and other requirements.

  • [1] these may concern, for instance, requirements related to CE marking. CE isthe abbreviation of "Conformite Europeenne," French for “European Conformity." Theparty affixing CE marking indicates that the product is in conformity with the applicablerequirements set out in Community harmonization legislation. Before the marking canbe affixed, a number of complex technical requirements must be fulfilled.
  • [2] The principles have been developed and affirmed by case law in different CISGmember states. See, for instance, Unilex on CISG. Cases by Article & Issues, Article # 35,Issue 1.5, Conformity to public or other law requirements in buyer's country, available at
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