CHAPTER 4
Drafting the International Contract for Sale of Goods WHEN DEALING INTERNATIONALLY,
you must consider the business practices and legal requirements of both the buyer’s and the seller’s country. Parties to a commercial transaction generally have the freedom to agree to any contract terms that they desire, but the laws of your country or the foreign country may require a written contract. In some transactions, the laws may even specify all or some of the contract terms.
Terms Necessary for Enforcement Whether a contract is valid in a particular country is mainly of concern if you have to seek enforcement. Otherwise, you have fairly broad flexibility in negotiating contract provisions. However, you should always be certain to come to a definite understanding with the other party on four basic issues: the goods (quantity, type, and quality); the time of delivery; the price; and the time and means of payment.
Implied Terms If you leave terms out of your contract, the gaps will be filled in by application of the law. To the extent that the terms are vague, open to interpretation, or left to implication or custom, you will have to rely on the law to determine your rights and obligations should a dispute arise. For cross-border contracts, the implied terms will vary depending on which country’s law is applied. Disputes will be resolved according to the laws of the country with jurisdiction. Jurisdiction is largely at the discretion of the court, which may agree to follow the expressed intent of the parties as to the governing laws or may apply another test, such as the place where the contract was signed or where the parties have the most significant contacts. Accordingly, the best way to control the results of your contract is to clarify each party’s responsibility in the agreement by paying close attention to every contract term. Always be specific. Plan for each contingency. For instance, you may agree to buy a certain quantity of a specific product, but how are you going to pick up the goods? Is someone going to box them? Do you want the entire order at once? When do you want them?
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