StandpointKnowledge Management
Commercial law as a knowledge gap in companies
According to a study, 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 an impression from practice. It has now also been measured.
The most expensive gap is not in the contract but in the team that concludes it. Those who do not know the rules trade runs on give up protection the company has long since paid for and leave opportunities unused.
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 (Handelsgesetzbuch, 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.
Gran sent the questionnaire by link to selected people with professional experience.2 That is not a random sample. Participation was voluntary. 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 show a direction, not a rate. That direction is hard to dispute, though, because it repeats across almost all twenty questions.
Where only a minority got it right
The results look similar across the topics. The questions asked about basics that count in day-to-day business.
Diagram: share of correct answers on six basic questions. Notice of defects 21 percent, CISG 30 percent, standard terms abroad 22 percent, applicable law 24 percent, place of jurisdiction 32 percent, Incoterms 17 percent. All of them sit far below the halfway mark.
These are not specialist questions but basic questions 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: on the six corresponding questions of the survey, just under a quarter of the answers were correct on average.
Standard terms: an underrated tool
On standard terms, too, the study shows a widespread misconception. Gran asked whether standard terms in international trade are rather effective. The majority answered no.3 In fact, content review is less strict toward businesses than in consumer business, and many foreign laws review standard terms more leniently than German law. Those who do not know this deploy their clauses too timidly and underuse a tool that is meant to simplify operations.
Gran considers German companies too hesitant here. In his assessment, they leave opportunities unused 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 the article “How to incorporate standard terms internationally”.
What the gap costs
Missing knowledge works in two directions. It prevents deals, and it costs money.
The harshest example is the notice of defects. In a sale between merchants, a buyer who does not give notice of defective goods without undue delay loses, under Section 377 HGB, as a rule all warranty rights. This is one of the strictest deadlines in German law. Other periods, such as limitation, run longer and can be suspended; this one cannot. This deadline also runs out quickly. In practice, sometimes hours decide. Anyone who assumes they have 14 days, like the withdrawal period in consumer law, has already lost. Once the notice is missed, even the best lawyer and the best standard terms as a rule no longer help. With large deliveries, the stakes are not nuances but millions.
The study shows a gap on the CISG as well. Only 63 of 212 knew that it can be excluded.4 Without that knowledge, the choice goes unused. Another misconception is that agreeing on “German law” excludes the CISG. It does not, because the CISG is part of German law and applies as long as the parties do not effectively exclude it. The safe route is an express clause, such as “German law, excluding the CISG”. Those who get this wrong go into a dispute expecting rules that do not apply at all.
This misconception and the gap on notice 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. In doing so, 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. 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 usually worrying more than necessary. Anyone relying on the two years without observing the reasonable time loses their rights all the same.
Missing knowledge also prevents deals. The sales employee who does not know that German law can apply abroad as well shies away from the deal. Out of misplaced caution, the company loses revenue. 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 that the 14 days they know as the withdrawal period in consumer dealings are the normal case. They 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 all answers. The respondents were not uncertain. They were certain, and wrong.
For the legal department, that is uncomfortable. 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. They need the few rules that matter in 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 rules decide with more confidence and more courage at once.
Gran himself suggests that management offer employees regular training to close exactly these gaps. He also 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.5
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. Whether it stays is decided in the weeks that follow; why, is set out in the article “Learning is not the same as knowing”.
Frequently asked questions
Which commercial law basics should employees and management know?
The few rules trade runs on: 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 2025, 85). On core questions from general commercial law to the CISG, the Incoterms, and standard terms, only a minority answered correctly.
Notes
Reference: Poleacov, P. (2026). Commercial law as a knowledge gap in companies. INN.LAW. https://inn.law/en/perspectives/commercial-law-knowledge-gap/