EU Contracting for US Lawyers: Key Differences That Change How You Draft

Build one strong EU template and work from there. Catching the rules of all 27 member states is not possible. Robby recommended going deep in one mainland country and using that template as your standard, which gets you roughly 98 percent covered. When a deal moves to a new country without budget for local counsel, flag the remaining risk instead of winging it fresh. A strong template is the best answer to a thin budget.

Treat good faith and fairness as binding law. Your signed thirty-day termination right may not work when the parties are deeply linked. EU courts read every contract through good faith, reasonableness, and fairness, and they will override language that fails the test. We are trained to believe unwritten means unenforceable and written means done. Neither instinct travels.

Prepare your data processing agreement before the deal starts. A DPA now shows up in almost every EU deal because everybody shares personal data in some way, even when they think they do not. Skip the standard forms on the EU website and build one your data privacy officer and legal counsel have approved. A ready template keeps you from losing time mid-deal.

Watch out for commercial agent rights. Someone selling on your behalf in Europe carries mandatory protections you cannot contract around. Even a fixed one-year term still triggers a termination fee after the agreement ends, and Doris said to expect between one and two years of previously paid commission. That number surprises US companies and can flatten a scale-up that never saw it coming.

Carve out lost profits specifically. The consequential damages definition in the EU differs from ours. Courts generally treat lost profits as foreseeable and therefore direct, so a standard US waiver of indirect and consequential damages does not catch them. List what you want excluded or carry more liability than you intended.

Keep liability caps reasonable and tied to contract value. Reasonable caps hold up, and a recent Dutch case upheld one on exactly that basis. The familiar US structures work fine, with twelve-month measures, multiples of fees, and super caps for specific risks. Keep the clause short, since page-long exclusion clauses usually fail in the EU.

Leave the mandatory carve-outs alone. Gross negligence, intent, personal injury, and product liability cannot be excluded no matter what both parties sign. Negotiating to remove them wastes capital and sours the room. Spend your energy on the terms that can actually move.

Hire local employment counsel before hiring in Europe. At-will employment does not exist in the member states. Termination requires cause and strict procedure, with Germany and Italy among the strictest, and US companies are routinely gobsmacked by the separation process. Local means local, since a Netherlands lawyer cannot advise on German employment law.

Expect courts to look past the contract language. European courts read for the parties' intent, admit negotiations and outside evidence, and are not bound by your severability or entire agreement clauses. Emails and messages exchanged during the deal can control interpretation years later. Draft carefully, but manage what your team puts in writing just as carefully.

Choose a governing law the other side will sign. Forcing US law on EU customers slows deals to three and six month cycles, and they speed back up under a major local law. Ireland and the Netherlands offer the most familiar patterns for US lawyers. The mandatory EU rules apply either way, so pick a law that keeps the deal moving.