Adam represents a Polish company which is dealing with the distribution of furniture for gastronomic establishments. The company cooperates with many foreign producers. Adam would like to start cooperation with a new producer from France. He contacts with him and starts talks regarding the principles of possible future cooperation. It is going well. The parties are close to concluding a contract.
The French manufacturer sends Adam a document known as General Terms and Conditions and informs him that it applies to all purchase orders carried out by the company in cooperation with distributors.
What does Adam do?
Adam writes back to the future contractor that he understands the use of standard content of documents and is ready to start cooperation on the terms set out in the GTC. He opens the document for a moment, but it is extensive and Adam decides that there is no need to read it in detail, because the conversation went well.
The parties conclude a contract that is very short and contains a reference to the General Terms and Conditions. Adam signs the contract and looks forward to cooperation.
What did Adam not know when signing the contract?
Adam was not aware of many things.
Don’t be like Adam. Read the documents sent to you or get a professional legal assessment so that you know about the consequences of a contract that binds you.
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.