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Key Clauses in the International Sale Contract

ContratosIntr1The International Sale Contract is the most used among those governing trade relations between companies in different countries. This agreement sets out the rights and obligations of the parties (exporter-seller and importer-buyers) and the remedies for breach.

This contract is greatly influenced by the United Convention on Contracts for the International Sale of Goods (CISG), widely accepted by lawyers of different traditions and backgrounds. It articulates practical requirements arising from commercial practice with the general rules of CISG. Besides CISG, other sources of uniform contract law used in drafting this contract are the following: Uniform Law on the International Sale of Goods (ULIS), UNIDROIT Principles of International Commercial Contracts and the Principles of European Contract Law.

Multinational companies usually have their own specific international sale contracts as well as General Conditions of Sale and Purchase. On the contrary, small and medium size companies tend to use general forms or model contracts templates and for that reason it is important to negotiate and draft the most important clauses.

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International Commercial Arbitration Benefits

sell an win Fotolia 36402241 SInternational commercial arbitration is one of the great unknown for most small and medium businesses that believe they can only resort to the ordinary courts as a way to resolve disputes arising in a business relationship.

Arbitration is known as a mechanism through which one or more persons, natural (s) or legal (as) involved in a conflict, refuse going to the ordinary courts and voluntarily agree to submit the dispute to an impartial, independent and expert in the matter, whose report, called an award, shall be binding for all purposes. The award has international support and recognition in the business world, and in recent years has increased its use by international operators.

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Guidelines for Drawing up Chinese Contracts

There is a belief that in China the agreements set out in contracts are often not complied with, and that the system does not provide sufficient legal guarantees; in this regard, it is widely thought that signing a contract is merely the start of the real negotiations. Therefore, it is essential for foreign companies to have contracts whose essential role is to reduce the risk of conflicts as much as it is possible: Chinese business culture is based on harmony between the Parties.

Foreign companies should have clear and precise contracts to regulate their commercial relations with Chinese companies. We shall analyse as follows the most important clauses and how they should be negotiated in accordance with Chinese commercial practices and laws.

CHINOS NEGOCIANDO

Exclusivity

Chinese companies, on the strength of their great negotiating power, often demand that the foreign company should grant them exclusivity in all - or part - of Chinese territory, for example in distribution or agency contracts.

Foreign companies are advised, however, not to grant this exclusivity, because in addition to not being able to use other distribution channels, in the event of inefficient management by their Chinese partner, their access to the market would be suspended until the contract is terminated. In any event, the thing to do is to make the exclusivity dependent on reaching a minimum sales target. Add a comment

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