StandpointKnowledge Management
Commercial law as a knowledge gap in companies
A study shows: employees often do not know the basics of commercial law, at home or across the border. What that costs and how training helps.
In the autumn of 2024 a questionnaire went out to employees at commercial enterprises. Twenty questions, all of them about the rules their own daily business runs on. 586 people opened it. 374 closed it again without answering a single question.
The 212 who stayed could have made it easy on themselves. Every question offered “unknown” as an answer. It was chosen in about a quarter of all answers. In the remaining three quarters the respondents committed themselves, to yes or no, and were mostly wrong.
Commercial law decides deals every day, at home and across the border. Yet the people who run those deals, in procurement, sales, and management, often do not know its basics. That is not just an impression from practice. It has now been measured.
The most expensive gap is not in the contract. It sits in the team that concludes it. Those who do not know the rules trade runs on give away protection the company has long since paid for, and let opportunities lie.
The survey asked about the basics
Prof. Dr. Andreas Gran surveyed employees at commercial enterprises over the turn of 2024/25.1 The twenty questions are fundamental from a legal point of view. They range from everyday topics under the German Commercial Code (HGB), such as representation, the commercial letter of confirmation, the notice of defects, and default interest, to the international rules of the Rome and Brussels Regulations, the CISG, and the Incoterms.
What these numbers carry, and what they do not: the survey ran openly online, participation was voluntary, and those who took part selected themselves. The study says nothing about the respondents’ roles, industries, or company sizes. That the two thirds who dropped out did not see themselves in a position to answer is Gran’s inference, not a measurement; drop-off has many causes. So 212 answers carry a direction, not a rate. That direction is hard to argue away, though, because it repeats across all twenty questions.
Where the majority got it wrong
The results look similar across the topics. The questions asked about basics that count in day-to-day business.
These are not specialist questions. They are the switches of day-to-day business: when warranty rights lapse, which law and which forum apply, whether your own standard terms hold.
Would you have known?
Self-test
Six statements from everyday trade. True or not? The answer appears right away, your score at the end.
Score
For comparison: across the same six questions, respondents in the survey answered just under a quarter correctly.
Standard terms: an underrated tool
On standard terms, too, the study shows a widespread misconception. The majority considered standard terms in international business to be rather ineffective. The opposite is true: toward businesses and abroad, content review is less strict than in domestic consumer business. Those who do not know this deploy their clauses too timidly and give away a tool that is meant to simplify operations.
Gran sees German companies as too hesitant here: they let opportunities lie and act more cautiously than their foreign competition. How standard terms become part of an international contract in the first place is the subject of How to incorporate standard terms internationally.
What the gap costs
Missing knowledge works in two directions. It paralyzes, and it costs, hard.
The harshest example is the notice of defects. A buyer who does not give notice of defective goods without undue delay loses, under Section 377 HGB, as a rule all warranty rights. It is the sharpest sword of German law: other periods, such as limitation, run longer and can be suspended; this one cannot. And it strikes fast: in practice, not days but sometimes hours decide. Anyone who assumes a 14-day window, as in consumer law, has already lost. Once the notice is missed, even the best lawyer and the best standard terms retrieve nothing. With large deliveries, the stakes are not nuances but millions.
The same misconception hits the CISG: choosing “German law” does not exclude it, because the CISG is German law and remains applicable as long as it is not effectively contracted out. Those who do not know this go into a dispute expecting rules that do not apply at all.
The two gaps interlock, and that is where it gets expensive. Once the CISG applies, Section 377 HGB is no longer the measure. The buyer then gives notice under Article 39(1) CISG within a reasonable time after it discovered the defect or ought to have discovered it, and it has to specify the nature of the non-conformity. Alongside that stands an absolute limit the HGB does not have: two years from the date the goods were actually handed over, unless that is inconsistent with a contractual period of guarantee. And the consequence is milder than in a domestic commercial sale, because a buyer with a reasonable excuse for its failure to give notice retains, under Article 44 CISG, the right to reduce the price and to claim damages except for loss of profit.
Two notice regimes side by side, and most people know only one. Anyone counting in hours in an international sale is worrying more than necessary; anyone relying on the two years without observing the reasonable time loses their rights all the same.
Missing knowledge also paralyzes. The sales employee who does not know that German law can apply abroad as well shies away from the deal. Out of misplaced caution, revenue is left on the table. And if the management does not know the basics of representation and liability, liability risks arise for the company and for the managers themselves.
Neither type of error comes from carelessness. Both come from a gap that nobody has closed.
Why nobody notices the gap
A knowledge gap you know about, you close. The expensive kind is the other one: the gap you have no idea is there. Someone who has never heard of Section 377 HGB does not go looking for a deadline. They assume the fourteen days they know from consumer dealings are the normal case, and feel no unease that would make them pick up the phone.
That is exactly what the answer pattern in the study shows, and it is its real finding. Not hesitation, but commitment. “Unknown” was available throughout and was used in only about a quarter of the answers across all twenty questions. The respondents were not uncertain. They were certain, and wrong.
For the legal department that has an uncomfortable consequence: it does not get asked, because nobody has a question. The cases that reach it are the ones where somebody felt uneasy. The most expensive ones are the others. This gap therefore cannot be closed through the legal department, only by showing the people who decide, beforehand, where the questions are.
What helps: the basics where decisions are made
You do not close the gap with a legal opinion. You close it where decisions are made: with the people in procurement, sales, business development, and management. This is not about legal depth. It is about the few rules that carry trade: who binds the company, when a contract comes into being, when warranty rights lapse, plus choice of law, jurisdiction, the CISG, the Incoterms, and the effective incorporation of standard terms. Those who know these switches decide with more confidence and more courage at once.
Gran himself suggests that management offer employees regular training to close exactly these gaps, and he points to the liability risks that arise where the management lacks basic knowledge of the law. His conclusion is blunt: in his assessment, the German economy carries a competitive disadvantage because of inadequately trained staff at its companies.
That is avoidable. People in trade do not have to know the rules by heart. But the team that decides has to know them. Exactly that can be learned, in a day, not in a semester.
Frequently asked questions
Which commercial law basics should employees and management know?
The few rules that carry trade: who binds the company (representation, Prokura), when a contract comes into being (silence, the commercial letter of confirmation), when warranty rights lapse (notice of defects), plus standard terms and the international level with choice of law, jurisdiction, the UN Convention on Contracts for the International Sale of Goods (CISG), and the Incoterms.
Who is in-house training worthwhile for?
For teams in procurement, sales, business development, legal, and compliance, and for the management. The agenda follows your contracts and your industry, not a standard slide deck.
What is the claim of missing basic knowledge based on?
An empirical survey of employees at commercial enterprises (Gran, IHR 3/2025, 85). On core questions from general commercial law to the CISG, the Incoterms, and standard terms, the majority answered incorrectly.
Notes
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Gran, IHR 3/2025, 85. ↩
Reference: Poleacov, P. (2026). Commercial law as a knowledge gap in companies. INN.LAW. https://inn.law/en/perspectives/commercial-law-knowledge-gap/