6 MISTAKES TO AVOID BEFORE SIGNING AN INTERNATIONAL TRADE CONTRACT
Each time the commercial relations expand more, in many occasions outside the borders of countries. At that time, it is an international sale, in which we have to pay special attention to the contract signed to guarantee the expected result of our bussines.
For this we must avoid the following errors:
1. NOT HIRING AN EXPERT LAWYER IN THE LAW OF INTERNATIONAL TRADE
Many entrepreneurs see an expense and not an investment to hire a lawyer to draft the international sales contract. Others take an internet template or they ask a friend to pass them a model. Others simply ask for help from a general counsel who draws up a standard contract for their commercial agreement. All these practices entail a huge economic loss. Nowadays, the international sales contract is the fundamental basis by which the expected result of the business can be guaranteed. The good lawyer, the expert lawyer, honest and in good faith, is not a cost. It is the best investment. An investment in your peace of mind. It will avoid you and solve problems. Before thinking about the price, think about the benefits of the service. Think: how much is my peace? You choose.
2. DO NOT TAKE INTO ACCOUNT THE LEGAL FRAMEWORK APPLICABLE TO THE CONTRACT
Hence the importance of having an expert lawyer in International Trade Law who will review the exact situation of the case and with his express knowledge of the legal regulations that regulate the object of the contract he advises that clauses must be incorporated taking into account the legal regulations of the contracting parts. It should be assessed to what extent these regulations respond to the expectations of those who intend to conclude the contract and whether they should proceed to modify or integrate that regulation at the bargaining level.
The non-derogable rules by the legal systems linked to the contract must be taken into account as well as the consequences of the impact of such provisions on the contract they intend to conclude.
3. DO NOT NEGOTIATE THE INCOTERMS CORRECTLY
Likewise many entrepreneurs either do not know the meaning of the incoterms or they copy it directly from another friend, but they do not know that all incoterms can and must be negotiated expressly for each type of agreement expressly. Well, each one has a different cost or benefit for you. That, if you have not negotiated well, always with the help of your expert lawyer in International Trade Law may end up fulfilling a contract that will give you more losses than benefits or you will have signed a contract that will be impossible for you to comply.
4. DO NOT NEGOTIATE THE FORM OF PAYMENT CORRECTLY
Likewise, many entrepreneurs, due to their lack of knowledge, accept forms of payments that will cause them great losses or damages in the business. It will bring more loss than benefits. Sometimes the guarantees that the Banks demand make the money stay blocked longer than the entrepreneur can support for the good end of the business. Likewise, the banking agent is not an expert legal advisor in international trade who knows the legal consequences of each clause of the contract in their benefit or detriment.
5. DO NOT NEGOTIATE CORRECTLY GUARANTEES AND GUARANTEES
With the illusion of signing a contract, many entrepreneurs forget the well-written clause that correctly collects the guarantees offered or those that will be received. Also, many times they are not enough to guarantee the fulfillment of the contract or they have offered guarantees whose price is too high for the business to be profitable.
6. DO NOT WRITE THE CONTRACT IN THE CORRECT LANGUAGE
The language used constitutes an important risk that must be assessed, since it may happen that one of the parties does not know in depth the language used to draft the contract. This can be very serious when using a particularly technical-legal language that the parties are unable to understand or that the meaning of the legal term in their country is different from the one intended. For all these reasons, an expert lawyer in international contracts is always necessary.
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