Negotiations at the Conclusion of a Foreign Trade Transaction
Legal support and support of negotiations in foreign trade
Before concluding a foreign economic contract, the parties to an international transaction check the future counterparty for good faith, agree on all the main conditions of the future international treaty at the negotiation stage.
Key skills in negotiating in order to conclude an economically beneficial foreign economic contract for both parties are an important element of a future deal. This is due to the fact that participants in an international transaction must have knowledge of international law, be fluent in a foreign language, usually English, and be able to convince the counterparty and reach consensus when preparing a foreign economic contract. Competent negotiation at the conclusion of a foreign economic transaction allows you to come to an agreement in which the maximum economic result for both parties to the transaction will be achieved.
Russian civil law determines that citizens and legal entities are free to negotiate the conclusion of an agreement, independently bear the costs associated with their conduct, and are not responsible for the fact that an agreement is not reached. At the same time, when entering into negotiations on concluding a contract, during their conduct and upon their completion, the parties are obliged to act in good faith, in particular, not to allow entry into negotiations on concluding a contract or their continuation in the absence of intention to reach an agreement with the other party. Negotiations in bad faith include:
- Providing a party with incomplete or inaccurate information, including silence about circumstances that, due to the nature of the contract, must be brought to the attention of the other party.
- Sudden and unjustified termination of contract negotiations under circumstances in which the other party to the negotiations could not reasonably have expected it.
At the same time, the participation of a competent lawyer during negotiations allows the parties to the transaction to be sure that the transaction being made is legal, the meaning of the terms of the contract is clear to the parties and not distorted. Especially important in this matter is the fact that the lawyer accompanying the transaction must have knowledge not only in the field of law, but also be fluent in English. The knowledge of the English language of the lawyer accompanying the transaction will allow the parties to the transaction to unambiguously interpret the terms of the contract.
Given the unstable political situation, in order to conclude a foreign economic contract, it may also be necessary to study certain rules of law in the field of foreign economic activity, which are associated, for example, with a specific type of activity, restrictions imposed, etc. Knowledge of these norms will allow the parties to a future transaction to come to an agreement and resolve the issues necessary for concluding a foreign economic contract at the negotiation stage.
At the negotiation stage, the parties to the future transaction discuss the essential terms of the international contract (for example, the goods to be supplied, the delivery time, the cost of the goods supplied, etc.), conditions of a future transaction, regulate the law applicable to a foreign economic contract, etc.
Often negotiations are pided into several stages:
- Initial or preparatory, where the main terms of the future deal are discussed.
- The main stage at which the terms of the foreign economic contract are agreed upon, its provisions are worked out in detail, while the parties find a compromise that satisfies both parties of the international agreement.
- Final, when the participants of the international transaction clarify, adjust the terms of the foreign economic contract in order to sign it.
For small companies, keeping a highly qualified specialist on staff is often an expensive and not always justified undertaking, in connection with which such participants in foreign economic activity turn to specialized firms and attract professional specialists to help them either to conclude a specific transaction or to conduct business on an ongoing basis under a contract for the provision of services.
At the same time, it should be noted that negotiating with different participants in the international market has its own characteristics, in this respect, knowledge of international law alone may not be enough. This situation is due to the fact that participants in foreign economic activity are business entities from different states, which have their own national characteristics, culture, religion, rules of conduct and etiquette. Ignorance of these features can lead to a situation in which the conclusion of an international treaty becomes impossible. In this regard, when concluding an international contract, it is necessary to take into account the peculiarities of doing business with representatives of different states.
When preparing for negotiations, it is necessary to carefully understand the subject of a future transaction, study important points, collect references and all the necessary information. When conducting direct negotiations with a counterparty, it is necessary to structure and decompose all the information received in preparation for negotiations for convenience so that it is nearby at the right time. It is also worth sorting out the likely questions that the counterparty may have and prepare answers to them in advance.
Taking into account some features of negotiating at the international level, unlike Russian legal norms, participants in foreign economic activity, as a rule, often cannot do without a qualified lawyer when negotiating to conclude an international contract.
- Advising a client on legal issues of negotiating in cross-border transaction
- Checking the integrity of the counterparty in a foreign economic transaction
- Assessment of possible risks for the client
- Representing a party to a transaction to participate in negotiations
- Translation of the document into Russian and approval of the text of the future contract, taking into account the presentation of the contract in two languages and their identification