International law

Private International Law: What Happens When a Buyer Resides in Croatia and the Seller Is a Company Based in Germany?

The very question posed in the title illustrates a clear example of a cross-border legal relationship and highlights why private international law is such a relevant topic. The mere fact that the parties to a legal relationship originate from different countries is sufficient for that relationship to contain an international element, regardless of where the contract was concluded or where it is performed.

What Is Private International Law?

In its strict legal definition, private international law consists of a set of legal rules governing private law relationships involving a foreign element namely, situations in which persons, property, or events connected to more than one state are involved in the same legal relationship. Such relationships differ from purely domestic legal relationships precisely because they transcend the borders of a single state.

Today, cross-border legal activity is no longer an exception but rather the rule, particularly in the context of intensive economic cooperation, digitalised business operations, and the free movement of goods, services, capital, and persons.

The Purpose of Private International Law in Cross-Border Relations

The fundamental purpose of private international law is to provide clear answers to three practical questions that most frequently arise in cross-border situations:

which law governs a specific legal relationship,
which court or authority has jurisdiction to resolve a dispute, and
whether, and under what conditions, foreign court judgments may be recognised and enforced.

Applicable Law and Jurisdiction in International Disputes

In such circumstances, questions of applicable law namely, which legal rules govern the relationship and jurisdiction, meaning which court is competent to decide a dispute, inevitably arise. Answers to these questions are provided both by the national laws of the states involved and by international sources of law, in particular European Union regulations, which apply directly and take precedence over national legislation.

The Role of European Union Law in Private International Law

Given the Republic of Croatia’s membership in the European Union, the resolution of private law relationships involving an international element is largely harmonised and governed by directly applicable EU legislation. In such cases, EU law prevails over domestic legal rules.

Compliance Challenges for Cross-Border Business Operations

Numerous domestic and foreign companies that provide services or sell goods across multiple markets face ongoing challenges in aligning their operations with national and EU regulations. These legal frameworks are often fragmented, interdependent, and subject to frequent amendments, requiring interpretation in light of EU law and the case law of the Court of Justice of the European Union.

Failure to ensure compliance may result in serious legal and financial consequences, including substantial fines, administrative measures, and the erosion of trust and stability in business relationships with commercial partners.

Why Legal Expertise in Private International Law Is Essential

The importance of understanding and navigating private international law is evident. It serves as a legal bridge between the national legal systems of EU Member States and ensures legal certainty in cross-border private law relationships.

For reliable legal analysis, regulatory compliance, and effective risk mitigation, it is strongly advisable to rely on timely and high-quality support from an experienced legal team with expertise in European Union law.

Timely and professional legal support often makes the critical difference between avoiding legal risk and facing serious legal consequences.

Facing a cross-border legal matter?

Before you proceed, proper legal analysis under private international and EU law can help you avoid jurisdictional conflicts, invalid contracts, and costly legal consequences.

Law Firm Planinic & partners