Keys to Writing a Good International Contract
In today’s globalized world, commercial relations between companies and people from different countries are increasingly frequent. These opportunities require adequate legal structuring to avoid misunderstandings and future problems. Therefore, the drafting of international contracts must be done with precision and specialized knowledge. Here we present the essential keys to writing a good international contract:
- Clear Identification of the Parties
A solid contract must unequivocally specify who the parties involved are. It includes:
- Full name or company name.
- Legal address.
- Tax ID or business registration number (as applicable in each country).
It is essential to ensure that the parties are correctly identified to avoid misunderstandings and future legal problems.
- Definition of Applicable Law and Jurisdiction
One of the most important decisions in an international contract is choosing the law that will govern the contractual relationship and the court that will resolve potential disputes. Some key considerations are:
- Applicable law: Select the law of a country that is favorable and predictable for both parties.
- Jurisdiction: Decide whether disputes will be resolved in national courts or through international arbitration, such as the rules of the International Chamber of Commerce (ICC).
- Language of the Contract
Specify in which language the contract will be drafted and, in the case of versions in several languages, what will be the official text in case of discrepancy. This is crucial to avoid confusion and interpretation problems.
- Precision in Obligations and Rights
Clearly specify the commitments of each party:
- Main obligations: What products or services will be delivered, when and how.
- Payment method:Currency, terms, methods and payment guarantees.
- Delivery terms: Incoterms (such as EXW, FOB, DDP) if the contract is for international sales.
Precision in these points reduces the risk of conflicts arising from ambiguous interpretations.
- Dispute Resolution Clauses
Include a clear mechanism for resolving disputes:
- Pre-negotiation: Encourage a period of dialogue before starting a legal process.
- Mediation or arbitration: Choose an alternative method to the courts to resolve disputes more quickly and confidentially.
- Intellectual Property Protection
If the contract involves goods or services related to trademarks, patents, or confidential information, it is essential to include clauses that protect intellectual property rights and confidentiality.
- Force Majeure Clauses
The inclusion of a force majeure clause protects the parties in the event of unforeseen events, such as natural disasters, wars, or pandemics, that make it impossible to fulfill obligations.
- Compliance with International Regulations
Make sure the contract complies with relevant international regulations, such as rules on sanctions trade, customs rules and cross-border tax regulations.
- Flexibility and Periodicity of Review
International contracts are often subject to changes in market conditions or legislation. It is advisable to include clauses that allow for their modification by mutual agreement and to provide for periodic reviews.
- Specialized Legal Review
Although it is possible for the parties involved to prepare an initial draft, before signing it is essential that the contract be reviewed by lawyers who are experts in international law. They will ensure that the document is legally sound and minimises risks for the parties involved.
A good international contract not only sets the rules of the game, but also protects the parties from unnecessary risks and ensures compliance with the agreements reached. The key is to combine clear language with a technical and strategic approach, always considering the cultural and legal particularities of the countries involved.
If you need advice on drafting international contracts, our team of experts is here to help you. Contact us and ensure the success of your international business relations!
