Commercial law in companies: the knowledge gap
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.
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. An empirical study now proves it with numbers.
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 (Gran, IHR 3/2025, 85). Twenty questions, all of them 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 UN Convention on Contracts for the International Sale of Goods (CISG), and the Incoterms. Participation alone speaks volumes. Of 586 visitors, only 212 worked through the questionnaire, a rate of 36 percent. Two thirds evidently did not see themselves in a position to answer.
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. The right-hand column shows how few answered them correctly.
| Topic | What actually applies | Answered correctly |
|---|---|---|
| Notice of defects | Defects must be notified without undue delay; there is no fixed 14-day period. | 21% |
| The CISG | Applies automatically and must be actively excluded. | 30% |
| Standard terms internationally | Content review is less strict toward businesses and abroad than at home. | 22% |
| Applicable law | A foreign court can apply German law, even without a choice of law. | 24% |
| Jurisdiction | Merchants can agree on it freely, even excluding a court that would otherwise have jurisdiction. | 32% |
| Incoterms | Are recommendations, not mandatory law. | 17% |
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.
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 exactly 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.
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.
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 draws a clear conclusion: 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 half 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.
Reference: Poleacov, P. (2026). Commercial law in companies: the knowledge gap. INN.LAW. https://inn.law/en/perspectives/commercial-law-knowledge-gap/