Business contracts with Finnish partners: Common mistakes made by Czech companies

This comprehensive expert report serves as an exhaustive guide for Czech businesses operating in or planning to enter the Finnish market. The article provides a detailed analysis of the legal, cultural, and procedural pitfalls that Czech companies face when doing business with Finnish partners.

Need advice on this topic? Contact the ARROWS law firm by email office@arws.cz or phone +420 245 007 740. Your question will be answered by "Mgr. Vojtěch Sucharda", an expert on the subject.

Introduction to Finnish commercial law for Czech exporters: Myths and reality

Finland, a country with a highly developed economy and a stable legal environment, is an attractive destination for Czech exporters and investors.

With a GDP of approximately $306 billion (2024 estimate) and a nominal GDP per capita exceeding $54,000, it ranks among the richest markets in the world.

However, for Czech companies, which traditionally perceive Nordic markets as a benchmark for transparency and enforceability of law, this market hides specific risks. Many Czech entrepreneurs enter into business relationships with the misconception that both countries' membership in the European Union and the Schengen Area automatically means identical legal mechanisms.

Unfortunately, this illusion of "legal homogeneity" is often the first step toward fatal mistakes in contracting, which can lead to costly and lengthy litigation.

Although the Finnish legal system shares continental roots with the Czech system, it is based on a specific Scandinavian legal tradition.

In key aspects – particularly in matters of liability for damages, the formation of contractual intent, and complaint procedures – this tradition differs diametrically from the Germanic and Austrian model on which the Czech Civil Code is based.

While Czech law is often formalistic and codified in detail, Finnish law places greater emphasis on pragmatism, principles of good faith, and in many respects, unwritten customs that can have the force of law.

The success of a Czech exporter in Finland therefore does not depend solely on the quality of the product or service, but critically depends on the ability to navigate this different legal environment.

It is an environment where a verbal agreement can carry the weight of written law, but where a written contract without specific protective clauses can leave the supplier completely defenseless against claims for damages.

Thanks to its many years of experience and membership in the international ARROWS International network, the ARROWS law firm deals with cases on a daily basis where mere ignorance of these local specifics has led to losses amounting to millions.

Our team, which is insured for liability for damages up to CZK 500,000,000 for the peace of mind of our clients, is ready to identify and eliminate these risks before they threaten your business.

In the following chapters, we will take a detailed look at three pillars that are critical to the security of your capital in Finland and form the backbone of Finnish commercial law: the concept of Kontrollansvar (a specific form of strict liability), the Kauppalaki (Finnish Sale of Goods Act), and the institution of Sopimussakko (contractual penalty).

If you are not familiar with these concepts, you are exposing your company to unnecessary risk. However, if you are currently negotiating a contract or resolving a dispute, do not hesitate to contact us at office@arws.cz.

You can learn more about this service HERE.

Economic context and trade

To understand the legal risks, it is necessary to consider the macroeconomic context. Trade between the Czech Republic and Finland is robust and growing.

In 2023, Finland exported goods worth $672 million to Czechia, dominated by stainless steel and paper.

Conversely, Czech exports to Finland reached $1.19 billion, driven primarily by the automotive and engineering industries. This volume of trade involves thousands of contracts concluded each year.

Each of these is a potential source of conflict if not handled properly. The sectoral structure of trade, including engineering, electronics, and the chemical industry, implies a high degree of complexity in deliveries, where the failure of one component can cause extensive damage throughout the chain.

This is where the differences in legal liability regulations are most evident.

Cultural and legal gap: Why Czech contracts fail in Finland

The first and most fundamental difference that Czech companies encounter is the different philosophy of contracting and the very formation of contractual relationships.

The Czech Civil Code (No. 89/2012 Coll.) is a comprehensive code that attempts to regulate almost every situation in life in detail. Czech lawyers and entrepreneurs are accustomed to the fact that if they forget something in a contract, the code will "supplement" it with its dispositive provisions. Contracts in the Czech environment thus often function as a "layer above the law."

Finnish law, although codified, operates on a different logic.

The Finnish Contracts Act (228/1929) and the Sale of Goods Act (355/1987 - Kauppalaki) are the cornerstones, but they leave much more room for contractual freedom, court interpretation, and principles of fairness.

A Finnish contract does not have to be as long as an Anglo-Saxon one because it operates within a system that "fills in the gaps," but it does so in a way that is often counterintuitive and dangerous for a Czech company.

If you use a Czech or "international" contract template without adapting it to Finnish law, you risk two things: either the contract will contain clauses that are contrary to the mandatory principles of Finnish law (e.g., unjustified imbalance of rights) and therefore invalid, or—more commonly—you will lack key protective mechanisms that Finnish law does not automatically provide.

Trust vs. Paper: The Risk of "Handshake Deals" and Verbal Agreements

Finnish business culture is based on an extremely high degree of trust and integrity.

For Finns, their word is sacred. Once you shake hands, the agreement is valid.

The Finnish legal system reflects this cultural aspect – verbal agreements are fully valid and enforceable in B2B relationships (with the exception of specific cases such as real estate transfers).

This legal reality, combined with the Finnish aversion to "unnecessary" paperwork and "small talk," creates a trap for Czech companies.

Imagine a typical situation: Business negotiations in Helsinki are taking place in a friendly atmosphere. Over coffee, you mention that "if the delivery is delayed due to the carrier, we are not responsible for it."

Your Finnish partner nods. You take it as a non-binding conversation within the framework of the negotiations. For the Finn, however, it is a concluded agreement on the limitation of liability or, conversely, on the assumption of liability.

If a written contract is subsequently drawn up that does not address this point, a Finnish court may take this verbal agreement into account in the event of a dispute, provided that one party can prove it (e.g., through testimony, minutes of the meeting, or email).

The Finnish Contracts Act (Section 1) clearly states that an offer and its acceptance establish a binding relationship, and the form is not strictly prescribed.

An even riskier situation is when you believe that the contract has not yet been formed, while the Finnish party already considers it concluded.

An exchange of emails agreeing on the essential terms (subject matter and price) may be considered a perfect conclusion of a contract without the signing of a formal document with a letterhead.

In Finland, there is no such strong formalism of "signing on the last page" as in some Central European countries.

ARROWS lawyers strongly recommend implementing strict procedural rules in all negotiations with Finnish partners.

You must insist on the written form of all agreements and explicitly exclude any binding nature of previous verbal agreements and negotiations in the final contract.

This is done using a so-called Merger Clause (clause on the completeness of the contract). However, it should be noted that the effectiveness of this clause is not absolute in Finnish law.

Finnish legal doctrine and courts (including the Supreme Court) take a holistic approach to the interpretation of contracts and may also take into account pre-contractual negotiations if required by the principle of loyalty and good faith.

Therefore, the clause on the completeness of the contract must be formulated precisely in accordance with Finnish standards in order to effectively exclude unwanted side agreements.

If you are unsure whether your previous email communication has created an unwanted obligation, please contact us at office@arws.cz for an immediate review.

MicroFAQ: Oral agreements and the formation of a contract

1. Is an oral contract valid and enforceable in Finland?

Yes, in Finland, oral contracts in B2B relationships are generally valid and legally binding. Finnish contract law does not require most commercial contracts to be in writing. However, the problem is proving the content of such a contract in the event of a dispute.

2. Can email correspondence fully replace a formal contract?

Yes, very easily. If the email correspondence shows that the parties have agreed on the essential terms (typically the goods/services and price), the contract is concluded. A qualified electronic signature or "scanned signature" is not required.

3. How can you effectively prevent the unwanted conclusion of a contract during negotiations?

Consistently use disclaimers such as "subject to contract" or "subject to written approval by the board/management" in your communication. This makes it clear that the expression of will only becomes binding upon signing the final document. The ARROWS law firm will prepare a communication manual and sample clauses for your salespeople to avoid these pitfalls – write to us at office@arws.cz.

The principle of loyalty and good faith

Another critical difference is the role of "good faith" and "loyalty."

While this is an important principle in Czech law, it has a much stronger, even normative character in Finnish (and generally Nordic) law.

The principle of loyalty imposes an obligation on the contracting parties to take into account the interests of the other party, even beyond the explicit text of the contract.

This means that a Finnish court may refuse to apply a contractual provision that would be considered abusive or unfair to the partner in a given situation, even if it is formally valid.

A Swedish or Finnish company may aggressively enforce its contractual rights, but the court may decide that the manner of enforcement violates the principle of loyalty, leading to liability for damages.

This "invisible" law is often shocking to Czech lawyers, who are accustomed to textual positivism.

Liability for damages: The trap called "Kontrollansvar"

While in Czech law we are accustomed to liability for damages based either on fault (subjective liability) or on a breach of contractual obligations with the possibility of exoneration (objective liability with grounds for exoneration), Finnish law in the area of the sale of goods (B2B) operates with the unique concept of "Control Liability" (in Swedish, kontrollansvar). Control Liability (in Swedish kontrollansvar, Finnish kontrollivastuu).

This model, enshrined in the Finnish Sale of Goods Act (355/1987), is inspired by the UN Convention on Contracts for the International Sale of Goods (CISG), but in its Nordic version it has its own specific features that can be devastating for an unprepared Czech exporter.

A key feature of this system is the strict distinction between direct and indirect damages, with a different liability regime applying to each category.

Direct damage: Almost absolute liability

The seller (i.e., you as a Czech exporter) is liable for direct damage on the basis of strict liability, which is very strict.

You are only released from liability if you can prove that the failure to fulfill your obligation (e.g., delay in delivery) was caused by an obstacle beyond your control, which you could not have foreseen at the time of concluding the contract and whose consequences you could not have averted.

What does this mean in practice?

Imagine that you supply engineering components to a Finnish manufacturer. Your subcontractor in Asia burns down and fails to deliver the material to you. As a result, you fail to deliver the goods to Finland.

Under Czech law, you could try to exonerate yourself by referring to force majeure on the part of your subcontractor.

Under the Finnish kontrollansvar regime, it is much more complicated. The failure of your subcontractor is not usually CONSIDERED to be a circumstance beyond your control unless that subcontractor also faced an obstacle beyond its control.

In other words, you are fully responsible for the selection and failure of your subcontractors. Finnish law assumes that you have secured alternative sources. If you fail to do so, you are liable for the Finnish partner's direct damages (e.g., replacement costs, additional transport costs, repair costs) in full, regardless of whether you yourself have been negligent.

Indirect damage: Need to prove negligence

Here comes the second specific feature. According to Finnish law on the sale of goods, indirect damage is only compensable if the buyer proves negligence (fault) on the part of the seller.

Indirect damage is defined in the law (Section 67) and typically includes:

1. Damage caused by interruption or limitation of production or turnover (lost profits).
2. Damage caused by the goods not being usable for their intended purpose.
3. Lost profits due to the loss of contracts with third parties.
4. Damage to property other than the goods sold.

At first glance, this system may seem advantageous to the seller – "I am not liable for lost profits if I was not negligent." However, the reality is treacherous.

The line between direct and indirect damage is not always clear and is the subject of frequent disputes. For example, the costs of downtime for your own employees who were unable to work due to a missing machine can sometimes be interpreted as direct damage (wasted costs) and sometimes as indirect damage.

Finnish case law is evolving, and courts assess each case individually. If your contract does not explicitly define what is considered indirect damage and what its regime is, you fall under this legal mechanism, which is fraught with interpretative risks.

In addition, Finnish law allows liability limitations to be broken in cases of gross negligence.

If the court finds your conduct to be grossly negligent, you are liable for all damages (direct and indirect) without limitation.

ARROWS Law Firm can set liability caps in your contracts and precisely define categories of damages so that you are not at the mercy of the interpretation of the law.

The unclear definition of "indirect damages" is one of the most common reasons why Czech companies pay high compensation in Finland.

We can insert clauses into the contract that "flip" the legal regime into a form that is more advantageous for you (e.g., exclusion of liability for certain types of direct damages or setting a financial cap for all damages).

For a consultation on your liability clause, please contact us at office@arws.cz.

Liability for damages in Finnish law

Risk: Automatic (objective) liability for subcontractor failure (e.g., failure to deliver materials, IT service outage). The Finnish partner claims full compensation for direct damages, which may exceed the value of the contract.

Service: We insert specific and robust "Force Majeure" clauses into the contract, which explicitly extend the definition of force majeure to include subcontractor failure and exempt you from the kontrollansvar regime. Contact us: office@arws.cz

Risk: Unclear distinction between direct and indirect damages. The court qualifies production downtime or the cost of a replacement solution as direct damages for which you are liable regardless of fault.

Service: We define an exhaustive list of what is considered indirect damage (including lost profits and downtime) in the contract and exclude liability for it. We set an overall financial liability cap, e.g., up to 100% of the contract price. Contact us: office@arws.cz

Risk: Unlimited liability for damages if a court finds your actions to be "gross negligence" (which cannot be validly excluded by contract under Finnish law).

Service: We audit your processes and train management on how to document decision-making and damage prevention (due diligence) so that allegations of gross negligence can be refuted in court. Contact us: office@arws.cz

Risk: Liability for damage caused by a defective product (Product Liability). The Finnish Product Liability Act stipulates strict liability of the manufacturer/importer for damage to the health and property of private individuals.

Service: We help you set up recourse claims against your subcontractors and review your insurance contracts to ensure that they also cover the specifics of Finnish product liability. Contact us: office@arws.cz

Complaints and defective goods: A race against time that you cannot afford to lose

The complaint process (reklamation) is a minefield in the Finnish legal environment, where one wrong step or delay can mean the loss of all claims.

While in the Czech Republic the deadline "without undue delay" for reporting a defect is often interpreted relatively leniently in the context of business practices, the Finnish interpretation of "reasonable time" (kohtuullinen aika) is unforgiving.

A few weeks can mean the end of claims

The Finnish Sale of Goods Act (Sections 31 and 32) imposes an obligation on the buyer to inspect the goods "as soon as possible under the circumstances" and to notify the defect within a "reasonable time" after discovering or having discovered it.

The Finnish Supreme Court (KKO) has taken a very strict stance on this concept in B2B relationships in its precedent decisions (e.g., KKO 1993:52, KKO 1999:76).

In business transactions, a "reasonable time" for reporting an obvious defect may be a matter of only a few days, or at most a few weeks, from delivery.

If you are in the position of a buyer (e.g., you purchase Finnish technology, wood, or paper) and do not perform an initial inspection immediately, your right to file a complaint may be completely extinguished (preclusion).

The argument that "the technician was on vacation" or "we were waiting for installation" is unlikely to hold up in a Finnish court.

On the contrary, if you are a Czech supplier, this strict rule is to your advantage, but you must actively use it.

The ARROWS legal team will help you formulate a complaint procedure and General Terms and Conditions (GTC) that set clear, short, and preclusive deadlines for reporting defects to your Finnish partner.

This minimizes your legal uncertainty and protects you from speculative complaints after months of use.

Do not leave the length of the deadlines to the discretion of the court – specify them firmly in the contract (e.g., "defects must be reported in writing within 5 working days of delivery"). To prepare bulletproof delivery terms, write to office@arws.cz.

Specifics of "hidden defects" and limitation periods

For hidden defects, the complaint period runs from the moment the defect could have been discovered with professional care.

Here, too, Finnish practice places high demands on the buyer's diligence. However, in addition to the subjective deadline for reporting a defect ("reasonable time"), there is also an absolute limitation period.

According to the Finnish Act on Limitations of Debts 728/2003, the general limitation period is three years. This period begins to run from the moment the creditor (buyer) knew or should have known about the defect and damage.

The absolute ceiling is 10 years from the breach of contract or the occurrence of damage.

It is important to know that the limitation period can be interrupted very easily in Finland. An informal reminder of the debt, acknowledgment of the obligation, partial payment, or an agreement on installments is sufficient.

The interruption starts a new limitation period of the same length. This means that obligations can be "revived" indefinitely, which is different from some other jurisdictions with fixed absolute time limits.

ARROWS attorneys routinely monitor deadlines for their clients and ensure that "interruption notices" are sent in a timely manner to prevent your claims from becoming time-barred.

In cases of disputes over hidden defects, we work with technical experts to prove that the defect could and should have been detected earlier, thereby refuting the other party's claim.

Contractual penalties (Sopimussakko) and their moderation: Protection and risk

Contractual penalties (Sopimussakko) are a standard tool for securing obligations in Finland and function similarly to those in the Czech Republic – they standardize compensation for damages and motivate performance.

However, there is one key feature that can change the game: the court's power to intervene in the content of the contract.

Risk of judicial intervention (Adjustment of Contracts)

The Finnish Contracts Act (section 36) contains a general clause that gives courts and arbitrators very broad powers to moderate (adjust) contractual terms if their application would be unreasonable or unfair.

This provision is mandatory and cannot be waived by contract.

While in the Czech B2B environment, judicial moderation of contractual penalties is possible, in Finland, the court may, under Section 36, intervene in any part of the contract, not just the penalty.

It may adjust the price, the performance period, or even declare the entire clause invalid if it concludes that it leads to an unfair result in the given context.

In B2B relationships, courts are more reluctant to moderate than in consumer relationships, but if you agree on a draconian contractual penalty (e.g., 0.5% of the price per day with no cap) that exceeds the value of the contract or the actual damage, it is highly likely that a Finnish court will reduce it.

On the other hand, if you are in a weaker position (e.g., a smaller Czech subcontractor for a large Finnish corporation that has imposed ruinous terms on you), Section 36 can be your lifeline, which our lawyers can effectively use in your defense.

Our experts at ARROWS know how to balance the amount of the contractual penalty so that it is sufficiently motivating and punitive, but at the same time stands up to the test of proportionality before a Finnish court.

We recommend negotiating penalties with a cap, e.g., a maximum of 10-20% of the contract price, which increases their enforceability.

Do not rely on the fact that "what is written is given" – in Finland, sanctions must be perceived as fair. To review your penalty provisions, please contact us at office@arws.cz.

Specifics for IT and technology companies: The intellectual property trap

Finland is a global technology powerhouse and home to giants such as Nokia and Rovio.

Many Czech IT companies collaborate with Finnish partners on software development, SaaS solutions, or research. This poses a huge risk in the area of intellectual property (IP) rights, which is often underestimated.

Default rule: The author is king

In Czech law, in the case of an employee's work or a work made to order (if this is correctly handled in the contract for work), the property rights are transferred to the client/employer relatively automatically.

In Finland, the protection of the original author (natural person) is stronger.

The Finnish Copyright Act (404/1961) is not based on the automatic transfer of all rights to the client (the "work made for hire" doctrine does not apply here in the American sense, with the exception of computer programs created in an employment relationship, where the rights are transferred to the employer ex lege).

In B2B relationships (e.g., a Czech company develops software for a Finnish client on the basis of a contract for work), the so-called purpose of transfer rule applies.

If the contract is silent or vague, it is assumed that the client has acquired only those rights that are strictly necessary for the normal operation and purpose of the contract.

What does this mean? If your contract only contains a general statement such as "All IP belongs to the Client" without specifying any details, a Finnish court may conclude that:

1. You have the right to use the software, but you do not have the right to modify it (access to source codes and the right to make changes is not automatic).
2. You do not have the right to sell or transfer the software to a third party (e.g., when selling a company).
3. The author (development company) retains the right to use the same code for another client, unless this has been expressly prohibited (exclusivity is not automatic).

Also, be aware of the author's right of revocation.

Under Finnish copyright law, an author who has transferred their rights may revoke those rights if the transferee does not use the work within a reasonable period of time. This right is mandatory, but exceptions can be made for computer programs.

IT law specialists at ARROWS ensure that transfer clauses in English contracts with Finnish partners are "Nordic-proof."

We explicitly and exhaustively list the transfer of source codes, rights to modification, rights to further transfer (transferability), sublicensing, and exclude the author's right of revocation.

We also deal with the issue of Open Source Software (OSS), which is closely monitored in Finland. Contact us at office@arws.cz before you write the first line of code or sign the handover protocol.

Construction and assembly: Projects on Finnish soil

Czech construction and assembly companies have an excellent reputation in Finland thanks to their quality and price, but they often suffer from administrative burdens and ignorance of specific labor and contractual standards.

Posting of workers and the power of trade unions

The Finnish labor market is heavily regulated by collective agreements, which are often generally binding (erga omnes).

This means that even if you are a Czech company and you send your Czech employees to Finland for assembly work, you must provide them with conditions (minimum wage, bonuses, working hours, vacation) at least at the level of the Finnish collective agreement for the given sector (e.g., construction, metal industry) for the duration of their work in Finland.

If you only pay Czech allowances and Czech wages, you are violating Finnish law. Finnish trade unions are very strong and have the right to inspect foreign companies.

In the event of non-compliance, there is a risk of a construction blockade (boycott), which is a legal means of coercion in Finland, and punitive fines.

It is also necessary to register posted workers with the Finnish authorities (AVI) and fulfill tax obligations (obligation to register for VAT or income tax when establishing a permanent establishment).

Every worker on the construction site must have an identification card with a tax number (veronumero).

YSE 1998 – The Finnish construction bible

In Finland, the vast majority of B2B construction contracts are not governed by FIDIC standards, as is common elsewhere in the world, but by specific Finnish General Conditions for Construction Contracts, known as YSE 1998.

These conditions are very specific, and if you are not familiar with them, you are playing Russian roulette.

An example of a risk from YSE 1998:

• Deadlines: YSE 1998 sets very strict deadlines for claiming additional work or extending the deadline. If you do not submit your claim in writing and on time, it will expire.
• Acceptance: The rules for the acceptance procedure and liability for defects differ from Czech customs.

The ARROWS law firm provides comprehensive services for construction companies in Finland: from registration for taxes and reporting posted workers to AVI, to securing veronumero cards, to detailed analysis and negotiation of contracts under YSE 1998.

Thanks to our experience with more than 50 municipalities and regions in the Czech Republic, we also understand public procurement. Don't let Finnish bureaucracy or trade unions catch you off guard – write to us at office@arws.cz.

Dispute resolution: Arbitration vs. Courts

If preventive mechanisms fail and a dispute arises, choosing the right forum for its resolution is crucial. You have two main options: a Finnish state court or arbitration (arbitration proceedings).

Although court proceedings in Finland are fair and transparent, they can be disadvantageous for foreign entities.

1. Costs: The hourly rates of high-quality Finnish lawyers are in the hundreds of euros (typically EUR 300-500/hour).

2. Language: Proceedings are conducted in Finnish or Swedish. Translation costs are enormous.

3. The "winner takes all" principle: The losing party pays the full costs of the proceedings and the winner's legal representation. In complex disputes, these costs can run into hundreds of thousands of euros.

4. Publicity: Court hearings are public, which can damage your reputation.

If you already have a final judgment from a Czech court (e.g., due to the choice of Czech jurisdiction in the contract), it is directly enforceable in Finland thanks to the Brussels I bis Regulation (Brussels I Recast Regulation) without the need for a complicated recognition procedure (exequatur). This is a major advantage of EU membership.

Arbitration (FAI) – Speed and discretion

For international B2B disputes, arbitration by the Finnish Chamber of Commerce (FAI - Finland Arbitration Institute) is standard in Finland.

• Speed: The average length of proceedings is approximately 8-9 months (even less in expedited proceedings).
• Confidentiality: The proceedings are not public, protecting your trade secrets.
• Expertise: The arbitrators are specialists in the field.
• Costs: The FAI charges a filing fee of EUR 3,000 (from 2024).

In addition, there are FAI administrative fees and arbitrators' fees, which are based on the value of the dispute. The total costs can be high, but they are more predictable than in court. An advance on costs is required.

For Czech clients, we often recommend strategically negotiating the jurisdiction of Czech courts in the contract (if you have a strong position) or arbitration at the Arbitration Court at the Czech Chamber of Commerce and the Czech Bar Association in Prague.

ARROWS International will guide you through the arbitration process, whether in Helsinki or Prague, and help you negotiate a favorable arbitration clause.

Contact us at office@arws.cz.

Dispute resolution and enforceability

Risk: Litigation in a Finnish court with the obligation to conduct proceedings in Finnish. The costs of Finnish lawyers and translations are prohibitive. Obligation to pay the other party's costs in the event of defeat.

Service: Strategic choice of jurisdiction (Choice of Forum) in the contract – enforcement of Czech courts or arbitration proceedings in Prague/Vienna. In the event of a dispute in Finland, effective representation through partner offices at agreed rates. Contact us: office@arws.cz

Risk: Invalidity of the arbitration clause due to formal defects (e.g., incorrect name of the FAI institution). The dispute ends up in an expensive state court against your will.

Service: Preparation of a precise and valid arbitration clause (FAI, ICC, VIAC, or ad hoc) tailored to your business. Contact us: office@arws.cz

Risk: Expiry of the claim. In Finland, the general limitation period is 3 years from knowledge of the damage, but a maximum of 10 years from the event. Missing the deadline means losing money.

Service: Monitoring of deadlines and timely sending of an "interruption notice," which in Finland is sufficient to stop the running of the limitation period and reset the deadline. Contact us: office@arws.cz

Risk: Debt collection. The debtor does not respond to requests.

Service: Use of the European Payment Order (EPO) or direct enforcement in Finland through the enforcement office (Ulosotto), which is very effective. Contact us: office@arws.cz

Practical advice for negotiating with Finns: Cultural competence

Finnish business partners are usually direct, honest, and pragmatic. Success in negotiations requires respect for these cultural specifics:

1. Silence is a tool, not a mistake: Finns are comfortable with silence. They use it to think. If a Finn is silent, do not interrupt them, do not try to fill the silence with "fluff" or lower the price. Wait.

2. Facts over emotions: Emotional outbursts, pressure, banging on the table, or aggressive sales techniques ("you must sign now") are counterproductive and arouse distrust. Be prepared for a factual debate based on data and technical specifications.

3. Punctuality is a virtue: Being late for a meeting is unforgivable. The same applies to missing a delivery deadline, even by a single day. Finns plan for the long term and rely on schedules.

4. Egalitarianism: The hierarchy in Finnish companies is flat. Decisions are often made by consensus. Treat every member of the team with respect, not just the director.

Our lawyers have participated in dozens of negotiations with Finnish counterparts. We can not only draft a contract, but also conduct negotiations in such a way as to obtain the best terms for you without offending the cultural sensibilities of your partner.

Take advantage of our know-how for your growth. Our portfolio of 150 joint-stock companies and 250 limited liability companies is proof that we know how to do it.

If you are also looking for investment opportunities or connections, we will be happy to connect you within our client network.

Don't underestimate the Nordic chill

Trading with Finland can be a growth engine for your company.

It is a market that values quality and reliability. However, the legal risks are real and often hidden in the details – in the definition of damage, in the complaint period, in a missing sentence about copyright.

A standard contract template downloaded from the internet or translated from Czech will not cover these specifics and could become your most expensive mistake.

The legal issues involved in international trade are more complex in practice than they appear at first glance.

Don't rely on luck. Rely on the experience of the ARROWS law firm. We are insured for CZK 500 million, have international reach, and a team of experts ready to defend your interests from Helsinki to Prague.

FAQ – Frequently asked questions

1. What arbitration clause do you recommend for a contract with a Finnish partner?

For smaller contracts, we recommend the jurisdiction of general courts (ideally Czech, if you can negotiate this, which saves costs). For larger and more complex contracts (over EUR 100,000), the standard is FAI (Finnish Chamber of Commerce) or ICC. It is always essential to specify the seat of arbitration and the language of the proceedings (English). We can help you with the selection and wording at office@arws.cz.

2. Can liability for damages be limited in a contract with a Finnish company?

Yes, and it is highly recommended, even necessary for your protection. In Finland, it is common to use "Limitation of Liability" clauses, which limit liability to a certain amount (e.g., 100% of the price of the goods) and exclude consequential damages. Without this clause, you risk unlimited liability under the law. Have the clause checked and set up: office@arws.cz.

3. How does debt collection work in Finland?

Finland has a very effective debt collection system. If you have an undisputed claim, you can use simplified court proceedings. Bailiffs (Ulosottomies) are state officials who work quickly and impartially. If the debtor fails to pay, an entry in the debtors' register has fatal consequences for them (loss of creditworthiness), which is a strong incentive to pay. We can help you with debt collection, including filing a claim: office@arws.cz.

4. Does the contract with a Finnish partner have to be bilingual?

No, it does not. English is standard in Finnish business transactions, and courts and arbitration institutions accept it as the language of the contract. We recommend drawing up the contract in English as the sole decisive language to avoid interpretation disputes that arise with bilingual versions.

5. What should I do if my Finnish partner stops communicating after delivering defective goods?

Immediately send a written complaint (Notice of Defect) with a detailed description and claim. Keep an eye on the preclusive "reasonable period," which may only be a few days. If they do not respond, a formal pre-action letter must be sent. ARROWS lawyers can send the letter on the law firm's letterhead, which often restores communication and speeds up the resolution. Write to us: office@arws.cz.

6. Does the Czech Civil Code apply in Finland if we choose it in the contract?

Yes, the choice of law is fully respected within the EU (Rome I Regulation). If you choose Czech law, the contract will be governed by it. However, be aware of the so-called mandatory rules of Finnish law, which cannot be excluded (e.g., safety regulations, employee protection, consumer protection). For the correct and valid choice of law, please contact us: office@arws.cz.

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