Lubecka.Law Blog

5 points worth analyzing when concluding a B2B contract in the international trade

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.

1. COURT JURISDICTION AND APPLICABLE LAW

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.

2. INDEMNIFICATION PROVISIONS AND HOLD HARMLESS PROVISIONS

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.

3. DELIVERY TERMS

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.

4. CONTRACTUAL PENALTIES

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.

5. APPLICABLE LANGUAGE VERSION

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

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