How to Draft International Contracts?

Drafting contracts is complex and even more challenging when you are drafting internationally. There are international business norms and standards to keep in mind when creating international agreements but no laws or governing organs exist to enforce them. You may choose to utilize international arbitration, but the recourse will depend on what language you choose for your agreement.

Before you decide to enter into a contract with a foreign entity, it is important to know cultural nuances that can influence how that person or entity conducts its affairs. Things such as body language and eye contact can vary from country to country. If you have a better understanding of the opposing party’s culture, you can avoid many mistakes and awkward situations.

Being aware of the other party’s culture and ways of doing business is one thing and using clear language is another. The English language is predominantly used in international contracts and politics. It doesn't matter where the parties are, you may still use English to draft your contract. Be sure to use clear language and avoid complex sentences that might lead to confusion.

Be sure to define terms in order to avoid ambiguity in your contracts. When you spot language issues you must define your terms appropriately. For example, in the United States, there are many legal art words that mean something completely different to the people living abroad.

You must clarify what laws will apply. One of the hard things about entering into a contract with people abroad is deciding which law should govern the contract. For instance, many commercial contracts from the US mostly choose New York state. If your client insists on different jurisdiction, make sure your rights are protected.

In conclusion, it is advisable to consult both a local and a foreign lawyer for legal counsel. You do not want to get into an international contract where you are not sure if it can be enforceable in court. Your local lawyer might even have ties with lawyers abroad who can help. This way you can trust that your contract is legally enforceable. If your domestic lawyer won’t have anyone on the other side, it might be hard to trust someone who you don’t know and you want to be sure to mitigate risks.