Before you sign with a foreign partner, five simple steps can prevent most of the problems traders face abroad.
When you buy from or sell to a partner in another country, your rights depend on more than goodwill. Different laws, languages and business customs create risks that can be managed, provided they are addressed before the deal is signed.
1. Put the agreement in writing
A clear written contract is your first protection. It should identify the parties precisely, describe the goods and their quality standards, and set out prices, currency, quantities, delivery dates and payment terms. Keep copies of all correspondence that changes these terms.
2. Agree on the applicable law and the forum
Decide which country's law governs the contract and where any dispute will be settled. For the international sale of goods, many countries apply the United Nations Convention on Contracts for the International Sale of Goods (CISG) unless the parties exclude it. Knowing which rules apply avoids costly arguments later.
3. Use clear delivery terms
Specify an Incoterms® rule, such as FCA or CIF, together with the named place. The rule defines who arranges and pays for transport, and when the risk passes from the seller to the buyer.
4. Choose a secure payment method
The more you pay in advance, the more risk you carry. Instruments such as documentary letters of credit, documentary collections or escrow arrangements help balance the interests of buyer and seller.
5. Know your partner
Check that your partner is a registered company, verify its address and references, and be cautious with offers that seem too good to be true. A short check before signing can prevent a long dispute afterwards.
If a problem arises
Act quickly. Keep all documents, record dates and communications, and seek advice before taking any step. The Council's Legal Counsel in each country can help traders understand their options.
This article provides general information only and does not constitute legal advice.