10 COMMANDMENTS ON INTERNATIONAL COMMERCIAL CONTRACTS

Be aware that :

  1. Negotiating international contracts is more than negotiating prices, technical specifications and delivery dates: the commercial and financial success of any (international) contract will also depend on the legal framework (qualification of the contract, liability clauses, applicable law, jurisdiction, regulatory rules on data protection, AML, consumer protection…).
  2. If you are not familiar with the law in a certain jurisdiction, your position regarding liability, payment terms, guarantees, act of God… may be quite different from your own jurisdiction.
    If the choice of a foreign law is unavoidable, you should seek independent legal advice on such law before signing the contract and use any unfavorable outcome or prospects as a negotiating tool with the other party.
    In case of a dispute, the court may determine another court jurisdiction regardless of the jurisdiction agreed in the contract.
    Incoterms, the Vienna Convention (or similar applicable international treaties) will only deal with part of the contract.
    The application of a foreign law (or even your own national law) may imply that not the internal law of this jurisdiction would apply but the international private law rules (international agreements, international treaties, … like the Vienna Convention).
    Depending on the contract, you may need to refer (not only to national / federal law, but also) to state / regional law.
  3. The provisions relating to confidentiality / disclosure of information (e.g. announcements) and other applicable restrictions/ requirements may not be enforceable or void when contracts relate to regulated activities in a foreign jurisdictions (e.g. energy or national security).
  4. You must check the foreign law requirements in relation to the execution of the documentation as not all foreign jurisdictions will accept digital signatures and many foreign jurisdictions still require wet ink signatures with notarial/ apostille requirements.
  5. Accepting a foreign jurisdiction may have a serious impact in case of dispute; the legal costs relating to proceedings, their duration and the enforceability of the judgment may not be as you expected.
    Accepting an arbitration clause may also have a considerable impact on legal costs; the clause may not be enforceable, the arbitration proceedings themselves may lead to unenforceable decisions and … even more proceedings.
  6. Accepting foreign law and/or foreign jurisdictions may imply that you will have to contract or deal with proceedings in a language you are not familiar with, which may lead to translation costs on top of your own legal costs.
    The use of a language may have an impact on the validity of the contract.
    “legal false friends”: the legal vocabulary in a foreign language, however familiar it may sound to you, may have a significantly different meaning than you would expect.
  7. Not to exclude the choice of a venue and of an applicable law which does not coincide with the jurisdiction of either party as this may be an incentive to avoid litigation in court or before an arbitral tribunal.
  8. In some countries a lot of information about natural and legal persons is publicly and easily available in several databases and on websites. Use this information to obtain an audit with the help of a foreign lawyer about the counterparty/transaction party (in order to know the background, avoid fraud etc).
  9. Even when you have not executed a final binding contract, you may have, unknowingly, undertaken certain pre-contractual obligations.
    Even when you (think you) are acting under a non-binding letter of intent, heads of terms or a similar document, you are undertaking obligations that may differ depending on the applicable law.
  10. Any international contract will be governed by the law of a certain jurisdiction and any dispute relating to an international contract will be subject to the jurisdiction of a certain tribunal, even when parties have not elected the applicable law or the competent court.
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