How to negotiate an international contract and keep your company out of trouble
Paris, 23 November 2000 - Negotiating, drafting and performing international contracts is treacherous terrain for the unwary and inexperienced.
The good news is that the ropes can be learned without risking commercial disaster.
The answer is to attend the Institute of World Business Law seminar in Paris from 22-25 January, when leading experts on the mechanics and legal niceties of that vital cross-border contract will pass on their know-how.
There's nothing theoretical about this gruelling four-day seminar - and participants will not be expected to just sit back and absorb. They will be confronted with a business situation that is far from obvious, in which one false move in drafting the contract could knock the bottom out of the bottom line.
We are not calling it a war game, because trade should be about concord, not conflict, but we are making our simulation as realistic as we can.
The contract involves a recently privatised automotive company based in a former centrally planned economy in eastern Europe called ACCA that now embraces the free market. The company receives a fat order from abroad for 240 four-wheel drive trucks, to be supplied in three separate deliveries over nine months.
The dicey part is the fact that "transfer boxes" have to be installed in the trucks to make sure the wheels all turn at the same speed. They have to come from a supplier in a neighbouring country - one that unlike ACCA has signed the Vienna international convention on the sale of goods, a detail that turns out to be significant.
Plainly, there is a three-cornered set of commitments here. The truck maker will not be able to deliver unless his supplier keeps to an agreed schedule. How do you make sure that the contracts are watertight and cover every eventuality so that legal risk is kept to a minimum?
So here are five of the questions participants will have to consider, just as they would for real. To make the exercise even more challenging, participants will be asked to look at the contract from the viewpoint of both partners.
- What are the goals of each side? What does each party want or need from this relationship?
- What information will each party want from the other side?
- Do you need any information obtainable from outside sources, like the Internet, embassies or the media?
- What are the risks in signing the contract, and what contractual clauses should the parties use to protect themselves?
- What options will the parties have if something goes wrong after the contract is signed?
No surprises for guessing that the seminar will provide a useful introduction to dispute resolution techniques, including ICC arbitration and the various alternative dispute resolution mechanisms that are now on offer in the comple
x world that is today's global economy.
Full seminar details
Institute of World Business Law