Drafting and legal expertise of foreign trade contracts

drafting-and-legal-expertise-of-foreign-trade-contracts

 The conclusion of foreign trade contracts is aimed at the legal regulation of relations between business partners located in the jurisdiction of different states.

Foreign trade contracts may have a different subject matter, on which the form of their conclusion depends, as well as features of the choice of ways to minimize legal risks. A common feature of foreign trade contracts is that all of them are the main document that regulates the legal relations between foreign business entities and play a key role in removing possible obstacles to the successful economic activity of the parties and international trade.

The following important aspects should be noted, which are necessarily taken into account in the preparation and conclusion of foreign trade contracts.

Choice of applicable law

According to paragraphs 1 and 2 of Art. 1210 of the Civil Code of the Russian Federation, the parties to an agreement may, at the conclusion of an agreement (contract) or subsequently select, by agreement among themselves, a right that is applicable to their rights and obligations under this agreement (contract). The agreement of the parties on the choice of the law to be applied must be directly expressed or must definitely flow from the terms of the contract or a combination of the circumstances of the case. If necessary, the application of paragraph 4 of Art. 1210 of the Civil Code of the Russian Federation, according to which the parties to a contract can choose the law to be applied both for the contract as a whole and for its individual parts. In connection with the foregoing, in the foreign trade contract (agreement) it is necessary to determine the applicable law, in order to eliminate subsequent disputes and disagreements between the parties. However, in practice there are cases when the parties to the contract forget for some reason to settle the question of applicable law in the contract itself. In this case, the determination of the applicable law should be carried out on the basis of the norms of the law of a state.

For example, in accordance with Russian legislation (Art. 1211 of the Civil Code of the Russian Federation), if the parties did not determine the applicable law, then the law of the country where the place of residence or principal place of business of the party that performs is located will be subject to their relations. At the same time, the legislation defines the parties that carry out the execution, which is crucial for the content of the contract. It should be borne in mind that if the law, the conditions or the substance of the contract or the totality of the circumstances of the case clearly imply that the contract is more closely associated with the law of another country than the one in which it executes that is crucial for the content of the contract, the law of the country with which the treaty is more closely related.

If necessary, the contract should clarify the issue of application of the Unidroit Principles by the parties (including the use of the wording “lex mercatoria” or “general principles of law”). Also, the parties to the contract are recommended to settle the issue of the application of Incoterms.

It is extremely important to pay special attention to the form of the contract. As a general rule, paragraph 1 of Art. 1209 of the Civil Code of the Russian Federation the form of the transaction is subject to the law of the country to be applied to the transaction itself. At the same time, a transaction made abroad, at least one of the parties of which is a person whose personal law is Russian law, cannot be invalidated due to noncompliance with the form if the requirements of Russian law to the form of the transaction are met. However, it should be noted that the above rule requires a special assessment applied directly to specific legal relations. For example, in respect of international sales contracts, to which the parties have agreed to apply the provisions of the UN Convention on Contracts for the International Sale of Goods (1980), it is not required that the sales contract be concluded or confirmed in writing or be subject to a different requirement regarding the form . He can be proved by any means, including testimony (clause 11 of the Convention).

The procedure for resolving disputes arising from a foreign trade contract

Despite the importance of resolving disputes in the negotiation process, it is recommended to determine the procedure for resolving disputes in court in the contract. As a general rule, by agreement of the parties to the contract, it is possible to determine jurisdiction between the parties to disputes that are not settled by way of negotiation, to the arbitration court of the Russian Federation. Moreover, it is possible to include in the contract an arbitration agreement on the settlement of disputes arising from a contract (agreement) in an international commercial arbitration or arbitration court.

Checking counterparties at the conclusion of foreign trade transactions

Individual difficulties can be encountered in the verification of the good faith of a foreign counterparty. This is due to the fact that it is subject to the right of a foreign state, which regulates the characteristics of the organization of the activities of such a subject, the norms of which are different from those of Russian law. In this case, you should request the constituent documents of a foreign legal entity (or documents confirming the legal capacity of another person who is a potential counterparty). In relation to a foreign legal entity, it is important to understand how to confirm the authority of its official representative. In the case of representing the interests of a foreign legal entity by the branch, it is necessary to request the regulations on the branch, a document confirming the authority of the head of the branch, an extract from the State Register of accredited branches, representative offices of foreign legal entities. In this case, it is recommended to obtain a notarized certificate on the basis of art. 81 Fundamentals of legislation on notaries, translation of documents provided.

In addition to the above, there is a fairly large number of legal features of settling the legal relations of the parties when concluding contracts complicated by a foreign element. In this regard, when concluding such contracts, their qualitative legal assessment is important. The specialists of the Law Firm BRACE have the necessary knowledge and skills that contribute to quality legal assistance on foreign trade contracts.

Legal services

  1. Drafting foreign trade contracts.
  2. Legal expertise of submitted foreign trade contracts. This service can be provided as a one-time and on a subscription service.
  3. Drafting protocols of disagreements, additional agreements to foreign trade contracts, etc.
  4. Participation in negotiations with counterparties regarding the conclusion of foreign economic transactions.
  5. Consulting support on the conclusion of foreign trade transactions.

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