10 April 2023 • 17 min read
Managing International Contracts and Disputes
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
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:
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
- 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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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.
insurance options: Importers and exporters can purchase trade credit insurance
or political risk insurance to protect against losses due to non-payment or
- 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.