Have you received a contract that needs to be signed with a foreign contractor? Find out which provisions are worth paying attention to. I have prepared 5 important points regarding typical provisions for this type of contract.
Contractual provisions regarding court jurisdiction and applicable law will allow you to determine where any potential dispute with a foreign contractor will take place and under which law it will be resolved.
Although these provisions are most often found in the final part of the contract, it is worth starting to analyze the contract exactly from them.
It is worth giving them a special attention as they often shift a significant part of the responsibility onto one party of the contract for the circumstances determined in the agreement.
When companies from different countries sign a B2B contract with each other, it’s really important to be clear about the responsibilities of the parties concerning the delivery terms. It can get complicated so everyone needs to know what they’re responsible for. It is worth specifying, among others, who is responsible for loading and unloading the goods, who is responsible for providing their transportation, and regulating issues related to insurance, packaging, and labeling of goods that are the subject of the contract.
In situations like this, Incoterms are often used as an international trade standard that can help make things clearer and more simple.
Of course, these provisions will only be relevant in the case of contracts that involve the delivery of goods, and not for example, the provision of services to another party.
In B2B contracts concluded in the international trade, it is worth paying attention to all regulations regarding the consequences of breaching the obligations arising from the contract, including provisions regulating contractual penalties.
The practice shows that in the international trade, such provisions occur less frequently than in domestic, local relations.
If a B2B contract in the international trade is prepared in two language versions, it is helpful to indicate which language version will be considered binding by the parties in case of any interpretation doubts.
However, most often these contracts are prepared in English.
Of course, in a specific case, there may be much more characteristic provisions of a contract regulating cooperation with a foreign business partner, depending on the subject matter of the contract . Nevertheless, these five are always worth paying attention to.
Joanna Lubecka
attorney
However, when there is a dispute in the court, the basic practical difficulty leads to answering the question - where will such a dispute take place. In the contractor country or abroad? Can it be secured somehow?
One of the most important points that needs to be clarified in a B2B contract concluded with a foreign contractor are the terms of payment of the agreed remuneration. Payment after delivery of the subject of the contract or prepayment? And if so, what should be its amount? Which solution to choose? Read below.
Regardless of the form in which the agreement with a foreign partner is concluded, it is important that the parties agree on the most crucial elements of the contract. Incorporating these clauses will enable the parties to execute the contract in a transparent manner, without any ambiguity or uncertainties.
When force majeure events occur in international trade contracts, significant problems may arise in the process of its performance. However, including appropriate clauses in the contract that address such issues can help to manage the situation in a controlled and orderly manner.
As it is for the pandemic the world is slowly returning to normality, and there is much less talking about coronavirus cases, many entrepreneurs still feel the severe effects caused by the pandemic, including: disruptions in supply chains, lack of availability of materials or lack of components.
Case study. Check what Adam forgot when negotiating a contract with a foreign contractor
Although the indicated issues should be clearly regulated in each contract on the basis of which the guarantee is granted, in the case of foreign deliveries they are particularly important.
Below you will find some useful information on how to negotiate contracts concluded with a foreign business partner.
The purpose of the NDA is to secure the confidential nature of information that is provided to the other party in connection with the commencement of negotiations, determining the terms of possible cooperation between the parties, the concluded contract, cooperation or employment.
The standard practice is to start reading each document from the beginning. In the case of B2B contracts concluded with a foreign contractor, it is worth reversing this order.