CHAPTER 7
Parties to the Transaction, Part 2 EXPECT THE UNEXPECTED.
If you anticipate what might go wrong, you can plan ahead and hopefully avert a catastrophe. The difficulty is to know what might go wrong. When dealing with business, financial, and legal arrangements in crossborder contracts, you should have some idea of what your liabilities might be and what your remedies are. Otherwise, you are unlikely to remain competitive on an international level because the cost of protecting your business will far outweigh the benefits of trading across borders. When you think you have made the best deal, check off all the points discussed below.
Buyer GET IT IN WRITING
You agree orally to the contract terms. The seller sends you a written contract, but some of the terms are different than your oral agreement, some are missing entirely, and some new ones have been added. If you sign the written agreement, its terms will be binding on you, regardless of your oral understandings. Although oral understandings may sometimes be used to prove intent, the written word is the strongest evidence of your agreement. Be sure it correctly states your understanding of the contract terms. In the absence of mutual agreement, when both parties have the same intent and understanding of the terms, the entire contract could be considered void. T H E M O R A L : Be certain the terms are written, that they state what you intended to
say, and that your understanding of them is the same as the seller’s understanding. MAKE A DEFINITE AGREEMENT BEFORE YOU ACT ON IT
The seller sends you a written contract, and you modify a few terms, execute it, and send it back. In reliance on the contract, you buy expensive advertising, arrange warehouse space, and hire employees. The goods fail to arrive, and you sue for specific performance and breach of contract. The seller claims that your alterations to the agreement were material and therefore no contract was ever formed. You argue that your changes were minor and that the executed agreement constituted an acceptance when you returned it to the seller. If you cannot amicably resolve the dispute with the seller, you will be at the mercy of a third person’s judgment as to whether the alterations were “material”—a standard which is vague, at best. T H E M O R A L : Accept the exact terms of an offer or, if you alter any provisions, make
formation of the contract contingent on the express acceptance of the other party to the exact terms of your altered offer.
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