A practical issue that arises every day in commerce
Have you included an arbitration clause in your bills of lading or invoices—and are you confident that a court will recognize it as valid?
Do you know under what circumstances a clause in a invoice creates an obligation for the buyer—and under what circumstances does it remain merely a formal text without legal effect?
How should you properly draft commercial documents so that the arbitration clause is valid for every shipment?
A wholesale supplier included an arbitration clause on the back of every invoice. The goods were delivered over several years. When a debt of 35,000 euros arose, the supplier filed a claim with the arbitration court. The buyer responded: “I did not sign an arbitration agreement. I signed the invoices only as proof of receipt of the goods, not as an agreement on the procedure for resolving disputes.”
The court considered this issue. The decisive factors were how exactly the clause was worded and whether the buyer had in fact agreed to it.
Can an invoice include an arbitration clause?
Yes—but with conditions. An invoice is a commercial document confirming the transfer of goods. By its very nature, it is not a contract. However, if the parties systematically conduct business based on invoices and the buyer has familiarized themselves with its terms, courts in some cases also recognize clauses contained in invoices.
The key question is always the same: did the buyer know about the condition and did the buyer agree to it—either explicitly or through implied conduct (i.e., by their actions)?
When a term included in an invoice is valid
First scenario: the main contract refers to the invoices. If the supply contract includes a clause stating that “the terms of individual deliveries are set forth in the invoices” or “the parties acknowledge the invoices as an integral part of the contract,” then the clause included in the invoice becomes part of the contract’s terms.
Second scenario: The buyer systematically signs invoices with a clause. If the buyer has consistently received invoices containing an arbitration clause and signed them without objection, the court may consider this to be de facto acceptance of the terms.
Third scenario: The 2024 amendments. As of June 2024, a clearer legal basis has been established for the acceptance of terms through implied conduct and the exchange of documents. The systematic exchange of invoices containing a clause, without objection, becomes a significant argument.
When a clause included in an invoice does not apply
A one-time delivery to an unknown buyer. If this is the first and only transaction, the buyer signs the invoice solely as a receipt of goods, and there are no other indications of an agreement on dispute resolution, the disclaimer
is automatically unenforceable.
The disclaimer is hidden in fine print. Courts require that a party have a realistic opportunity to become familiar with the terms. If the clause is printed in such a way that it is practically impossible to notice, it may be deemed invalid.
How to Draft It Correctly
The recommended approach is multi-tiered protection.
First level: the main supply contract with an arbitration clause. This is the safest option. All other documents—invoices, invoices, and certificates—are signed in accordance with this contract.
Second level: if you are working without a master agreement—include the following clause in the invoice: “This delivery is made in accordance with terms and conditions that provide for the resolution of disputes at the Riga Arbitration Court (reg. No. 40003756873). Acceptance of the goods confirms acceptance of these terms.”
Level 3: Add a separate line on the invoice form for the buyer’s signature regarding the dispute resolution terms—separate from the signature confirming receipt of the goods.
Real-life case
A supplier of construction materials worked with several buyers without framework agreements—using only invoices. An arbitration clause was printed in small print on the back of each invoice.
When a dispute arose with one of the buyers, the buyer claimed not to have seen this clause. The court assessed the facts: the buyer had been doing business with the supplier for three years and had signed more than 80 invoices. No objections to the terms were raised. The court ruled that the clause was valid—the buyer had, by his actions, agreed to the terms.
Three steps for trading companies
First: if you operate without framework agreements—introduce a standard invoice form with a clearly highlighted arbitration clause and a separate space for the buyer’s signature below the terms and conditions.
Second: if you already use invoices—check whether your form includes the clause and whether it is visible to the recipient.
Third: when making the first delivery to a new buyer—sign at least a brief master agreement with an arbitration clause. It takes five minutes and prevents any misunderstandings.
A clause on the back of the invoice is better than nothing. A clause in the contract is the safest solution.
This article is intended solely for informational purposes and does not constitute legal advice.