Governing law
Which law is to govern the contract – and whether that choice will be upheld on both sides.
Germany · USA
German-US contracts
on a sound legal footing
Contracts between German and US companies bring together different legal systems, contracting cultures and concepts of liability. We advise on drafting and reviewing cross-border contracts, keeping both the legal and the commercial interests of our clients in view.
Context
Contracts do not automatically work on both sides of the Atlantic.
A German contract relies on statute at many points: whatever the parties leave open is supplemented by the German Civil Code (BGB). US contracts work the other way around – they spell out what is to apply and do not rely on a statutory default framework. The same set of facts therefore produces two very different documents.
In practice, this means that a translated German contract does not become robust simply because both sides sign it. It leaves open precisely the questions that matter in a dispute – liability, termination, rights in work results, enforcement.
We review German-US contractual relationships for the points at which the two systems diverge, and draft them so that they hold on both sides. Where individual provisions require a binding assessment under the law of a US state, it is provided by or together with US attorneys licensed in that state.
What matters
The points on which a cross-border contract turns.
Not every clause carries the same weight in international business. These are the nine points we routinely examine first in German-US contracts.
Jurisdiction
State court or arbitration, and where a decision can later be enforced.
Liability
Limitations of liability, indemnities and the treatment of consequential damages.
Warranties
Representations and warranties in place of the statutory remedies for defects under German law.
Termination
Term, termination rights, termination for convenience and the consequences of termination.
Confidentiality
Scope and duration of non-disclosure agreements, protection of trade secrets.
Intellectual property
Ownership, rights of use and licenses in trademarks, software and content.
General terms and conditions
German general terms and conditions (AGB) cannot be carried over unchanged into US business.
Enforcement
What a clause is worth is ultimately decided at the stage of recognition and enforcement.
Types of contract
The contracts we advise on.
We draft and review the contracts that German companies actually need in their US business – in German and in English. We tell you at the outset, not at the end, which parts of a matter are handled by whom.
- Distribution agreements
- Cooperation agreements
- Service agreements
- License agreements
- NDAs / confidentiality agreements
- Commercial agreements
- Corporate and shareholder agreements
Governing law & jurisdiction
German law or US law?
Which law is the better one cannot be answered in general terms – it is the wrong question. What matters is which law suits the specific contract, the negotiating position and the place of performance, and whether the choice made will stand when it is put to the test.
Both points belong at the beginning of the negotiation. Parties who raise governing law and jurisdiction only at the end negotiate them under time pressure – and often accept the other side’s proposal. The questions to be examined include:
- whether a choice of law is permissible at all, or whether mandatory provisions stand in its way
- whether governing law and jurisdiction fit together or contradict each other
- whether a judgment obtained in the chosen forum can later be recognized and enforced
- whether arbitration offers the more readily enforceable solution
- which language is to prevail in the event of a dispute
We assess these questions for the German side and, where the law of a US state is decisive, coordinate them with attorneys licensed there. We draft the contract itself in the context of the company’s other contractual arrangements.
Our approach
How we work on a cross-border contract.
01
Facts and interests
What the contract is meant to achieve commercially, which risks are acceptable, and where the negotiating position lies.
02
Assessing the draft
Where the US side has already provided a draft, we assess it from a German perspective and flag the points that carry weight.
03
Drafting and negotiation
Wording the key clauses, preparing the negotiation, and supporting the exchange with the other side.
04
Coordination with US counsel
Where admission in a particular state is required, we obtain the assessment from attorneys licensed there and work it back into the contract.
Working together
Working with US counsel.
US law is, to a large extent, the law of the individual states. For questions that require admission or particular expertise in a specific state, we coordinate the work with attorneys licensed there.
You retain a single point of contact throughout: we prepare the question, obtain the assessment required, place it in context for the German side and bring the results together in the contract. Tax questions are handled by tax advisors and Certified Public Accountants (CPAs), with whom we coordinate as needed.
Questions and answers
Frequently asked questions about German-US contracts
Which law governs contracts between German and US companies?
In business-to-business dealings, the parties are largely free to choose the governing law themselves. In the absence of a choice of law, the question is decided by conflict-of-laws rules – and then often differently from what one side expected. For that reason, governing law and jurisdiction belong in every cross-border contract, and they need to be aligned with each other.
Can German law be agreed in a contract with a US company?
In B2B transactions this is generally possible and occurs regularly in practice. Whether the choice holds depends on whether it is also recognized on the other side and whether mandatory provisions at the place of performance stand in its way. In any event, it is only negotiable if it is raised early and with good reasons.
Which forum makes sense for German-US contracts?
There is no general answer. The decisive question is where a decision will actually need to be enforced later. Because US judgments are not readily enforced in Germany, nor German judgments in the United States, arbitration is frequently considered for cross-border contracts – not always, but regularly.
What should be kept in mind with US-style contract clauses?
US contracts expressly regulate much of what German law supplies as a default framework: representations and warranties in place of statutory warranty rights, indemnities, limitations of liability, termination rights. Clauses such as indemnification, representations and warranties or termination for convenience therefore need to be reviewed carefully – even where German law has been agreed.
Can a German contract simply be translated into English?
A translation carries over the wording, not the effect. A German contract tacitly relies on the German Civil Code (BGB) at many points; that framework is missing as soon as a different law applies or the other side does not read it into the document. Cross-border contracts are therefore not translated, but drafted.
Do you also review existing draft contracts from a US partner?
Yes. A draft from the US side is often already on the table. We assess it from a German perspective, identify the points of commercial weight and prepare the negotiation. Where the law of a particular state is decisive, we coordinate with attorneys licensed there.
Your contacts
Two attorneys, two legal cultures.
Both attorneys studied at the University of Miami School of Law. We handle matters in German and in English.
Darja Hannekum, LL.M. (University of Miami)
Rechtsanwältin & German civil-law notary (Notarin)
Certified Specialist Lawyer for IT Law (Fachanwältin für IT-Recht)
Master of International Law (University of Miami). As a German-qualified attorney, she advises on Trademark & Competition Law and IT & Social Media, and on license, software and confidentiality agreements with a US dimension.
J.-Alexander Bürger
Rechtsanwalt · Attorney at Law (Florida)
Juris Doctor (University of Miami); admitted in Germany and as an Attorney at Law in the State of Florida. His work focuses on corporate law and cross-border contract and cooperation structures.
More on Germany · USA
Further cross-border topics.
German-US business relationships
Distribution, cooperation and supply relationships across the Atlantic.
Corporate structures and market entry
Legal structuring of the US activities of German companies.
Establishing businesses in the United States
Structure, choice of state and documentation for a planned US entity.
Germany · USA
Think across borders.
Act with legal clarity.
Tell us about your matter between Germany and the United States. We will review how we can assist you and which other advisors, if any, should be involved.