Case Study in International Business Law

Liene Ratniece-Miltina

International Finance year 1st 

Case of Gaskin v. Stumm Handel GMBH (1975)

1. Facts – Contract between citizen of U.S. and Stumm Handel GMBH;

Contract being signed in German;

Lack of German knowledge within one of the signing parties;

Explained terms of contract in English;

„Forum Selection Clause”;

A claim against Stumm Handel GMBH regarding legitimacy of the contract

1. Issue – is the plaintiffs claim valid/legitimate against Stumm Handel GMBH?

1. Rules of Law – in this case proposition of contract law is announced.

1. Application – proposition of contract law means that any lack of language knowledge while signing a contract or any kind of legal involvment without getting translation is a gross negligence. As well as plaintiff is not located in an area which would have precluded easy access to a competent translation, there were no emergency conditions or any other exceptional circumstances that would have excuse plaintiff’s negligence against the contract. Plaintiff was introduced that contract was signed in the good business manner as well as not includes any kind of forced actions – he has signed contract willingly and must be responsible for the consequences.

1. Conclusion – the claim was dismissed and plaintiff must now bear the consequences. It’s really important to understand the contract and knowing what are the conditions that needs to be signed. Next time it would be necessary to ask for a contract copy in English in order to avoid such misunderstandings in the future as well as to sign contracts in a good business manner without getting court involved.

And it’s never too late to learn a new language.