The unpaid invoice is the symptom. The contract was the cause.
You are looking at an overdue receivable and blaming the debtor. The debtor is unreliable. The debtor is dishonest. The debtor is in a difficult jurisdiction. All of this may be true, but it is not why you are here. You are here because your contract — the document that was supposed to prevent this exact situation — did not do its job.
Contracts fail at collection time because they were written at sales time. The salesperson wanted to close. The client wanted flexibility. The legal terms were an afterthought — generic, boilerplate, drafted for a domestic transaction and applied to an international one. The result is a document that looks like a contract but does not function as one when the relationship stops being friendly.
The jurisdiction clause you did not think about
Your contract says "any disputes shall be governed by the laws of [your country] and subject to the exclusive jurisdiction of [your courts]." This felt sensible when you wrote it. It means nothing when the debtor is in Italy and has no assets in your country.
A judgment from your court against a debtor in another jurisdiction must be recognised and enforced in that jurisdiction — which requires a separate legal proceeding, with local counsel, at local cost. Within the EU, Brussels I Recast simplifies this. Outside the EU, it depends on bilateral treaties that may or may not exist with the debtor's country.
The practical fix: specify the debtor's jurisdiction in your contract, or a neutral jurisdiction with strong reciprocal enforcement. It is counterintuitive — you are choosing their court, not yours — but it eliminates the enforcement gap that makes your judgment unenforceable.
The payment terms with no teeth
"Net 30" without a late payment interest clause is a request, not a term. The debtor reads it, ignores it, and pays at Net 90 because nothing happens at day 31.
EU Directive 2011/7 provides statutory interest rights, but enforcing them is stronger when they are also written into the contract with a specific rate. A clause stating "Late payments shall accrue interest at 10% per annum, charged daily from the due date" is enforceable in most jurisdictions and is dramatically more effective than relying on the debtor's awareness of EU directives.
The missing retention of title
If you sell physical goods internationally and your contract does not include a retention of title clause, the goods become the debtor's property on delivery. If the debtor fails to pay, you are an unsecured creditor. In insolvency, you queue behind banks, employees, and tax authorities.
With a retention of title clause — Eigentumsvorbehalt in Germany, réserve de propriété in France, riserva di proprietà in Italy — the goods remain yours until paid for. In insolvency, you are not in the queue. You own the goods. The clause must be drafted for the debtor's jurisdiction to be enforceable, but the effort is trivial compared to the protection it provides.
The currency clause you left out
Your contract specifies the price in euros. The debtor's operating currency is not euros. Between invoice and payment, the exchange rate moves. The debtor now owes the equivalent of 25% more in their local currency and cites this as a reason for non-payment.
A currency clause specifying the invoicing currency and the reference exchange rate — with an adjustment mechanism if the rate moves beyond an agreed band — prevents this from becoming a dispute. Without it, you have a valid claim for the euro amount and a debtor who genuinely cannot afford it.
The contract you need next
The unpaid invoice in front of you is governed by the contract you already signed. That contract cannot be changed retroactively. What you can change is the next one — and the one after that — by including jurisdiction alignment, enforceable interest, retention of title, and currency protection.
Four clauses. Each costs nothing to include. Each transforms your position from hopeful creditor to protected one. The best time to add them was before the sale. The second best time is before the next one.
Ingrid Halberstam
Trade Credit Advisor