Economic cooperation with a foreign contractor can be formalized in several ways.
Do you know them? Are any of them better than the others?
Let’s see.
An agreement concluded in writing is one of the best ways to formalize economic cooperation between the parties, including in international relations. The advantages of this solution is that a properly drafted contract allows you to easily secure all the arrangements of the parties regarding the conditions under which this type of cooperation would take place. Thus, the agreements lead to the removal of uncertainty as to the legal relations of the parties, and in practice they often lead to significant time and financial savings.
Working over the details of a written contract, however, often requires time and attention from entrepreneurs. Negotiations regarding the future agreement between the parties can last for months, and international relations often prolong these talks. This should not discourage the formalization of relations between entrepreneurs in the international trade, but it is certainly worth considering that the time necessary to formalize the contract in this way may be extended.
General Terms and Conditions is nothing more than a document that universally regulates the rules of cooperation of one of the parties with its contractors. In the practice of the international trade, a document in the form of a GTC is the standard and the basis for concluding B2B contracts. General Terms and Conditions can be very extensive, and they are often accompanied by a short agreement referring to the details specified in this document.
The provisions of the General Terms and Conditions are sometimes negotiable, but the degree of changes in their content for the needs of a specific transaction will depend on the negotiating power of the business partner that presents this type of document and how much the parties want to formalize their cooperation.
Important!
When you learn that the cooperation is to be based on the principles set out in the GTC, it is worth asking for their access so that the cooperation takes place on terms known to both parties.
In the international trade, B2B contracts are very often concluded in a form corresponding to the commercial custom adopted by the parties. The terms of the transaction are often agreed by the parties by exchanging e-mails. Sometimes, while doing business, partners use a standard order form or they agree to use a simpler document that they’re already familiar with. This helps make the process easier and more efficient.
It is worth remembering that the lack of a comprehensive, written agreement does not mean that the parties have not concluded it and accepted binding obligations that will have legal effects. An agreement may be concluded in a number of ways, and the exchange of e-mails containing the arrangements of the parties relevant to the future contract may lead to the conclusion of an agreement that will be binding for the parties.
The advantage of this solution is undoubtedly its efficiency. The basic defect, however, is connected with possible understatements and the lack of clear arrangements between the parties in all matters that may seem important for future economic cooperation.
The way which:
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.