Managing International Contracts and Disputes

Trade Guide

10 April 2023 • 17 min read

Managing International Contracts and Disputes

Raghav Sand

Importers and exporters should be familiar with the laws and regulations governing international trade in the countries where they do business.

International contracts are legal agreements between parties from different countries or jurisdictions. They cover a wide range of business arrangements, such as the sale of goods, provision of services, joint ventures, and licensing agreements. These contracts are typically governed by international trade law, which includes rules and regulations related to cross-border transactions.

Examples of International Contracts

Examples of international contracts include purchase agreements, distribution agreements, franchise agreements, and technology transfer agreements. These contracts may be subject to specific legal frameworks such as the United Nations Convention on Contracts for the International Sale of Goods (CISG) or regional trade agreements such as the North American Free Trade Agreement (NAFTA) or the European Union's (EU) General Data Protection Regulation (GDPR).

Managing international contracts and legal disputes is an essential aspect of the import-export industry. Here are some strategies to help importers and exporters manage this process effectively:

  • Ensure clarity and specificity in contract language: When drafting international contracts, it is important to ensure that the language is clear, specific, and unambiguous. This will help avoid misunderstandings and reduce the likelihood of disputes.
  • Conduct due diligence on potential partners: Before entering an international contract, it is important to conduct thorough due diligence on potential partners. This includes researching their reputation, financial stability, and legal history.

  • Consider using an international arbitration clause: Including an international arbitration clause in contracts can help avoid the time and expense of going to court in the event of a dispute.
  • Seek legal advice: It is important to seek legal advice from lawyers experienced in international law when drafting contracts and managing disputes. They can help navigate the complexities of international law and provide guidance on the best course of action.
  • Document everything: Keeping detailed records of all communications and transactions related to the contract can help protect against misunderstandings and provide evidence in the event of a dispute.
  • Maintain good relationships: Building and maintaining good relationships with international partners can help prevent disputes from escalating and can make it easier to resolve them if they do arise.
  • Be prepared to compromise: In the event of a dispute, it is important to be open to compromise and to seek a mutually beneficial solution. This can help avoid costly legal battles and preserve the relationship with the partner.
  • Consider alternative dispute resolution methods: Alternative dispute resolution methods, such as mediation and conciliation, can be a more cost-effective and efficient way to resolve disputes than going to court.

  • Plan for potential disputes in advance: When drafting contracts, it is important to plan for potential disputes in advance and include provisions for how they will be handled.
  • Know the applicable laws: Importers and exporters should be familiar with the laws and regulations governing international trade in the countries where they do business. This can help them avoid legal issues and disputes.
  • Maintain open communication: Maintaining open communication with international partners can help prevent misunderstandings and disputes. Regular check-ins and clear communication can help identify and address potential issues early on.
  • Keep up with changes in the law: Importers and exporters should stay up-to-date on changes in international trade law, including changes in regulations and trade agreements, to ensure compliance and avoid legal issues.
  • Use dispute resolution services: There are several organizations that offer dispute resolution services specifically for international trade disputes, such as the International Chamber of Commerce's International Court of Arbitration.
  • Consider insurance options: Importers and exporters can purchase trade credit insurance or political risk insurance to protect against losses due to non-payment or political instability.
  • Learn from past disputes: When a dispute does occur, it is important to learn from the experience and make changes to prevent similar issues from arising in the future. This can include improving contract language, improving due diligence processes, or changing business practices.


International contracts can be complex and require careful drafting to ensure clarity, specificity, and enforceability. International contracts often include provisions related to payment terms, delivery schedules, warranties, intellectual property rights, and dispute resolution methods. These contracts are usually negotiated and drafted with the assistance of legal counsel with expertise in international law.

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