● general introduction;
● settlement of disputes.
5.1 General introduction
• (3) The type of contract and the kind and scope of the
object of the contract;
• (5) The technical condition, quality, standard,
specifications and quantity of the object of
the contract;
• (5) The time limit, place and method of
performance;
• (6) The price, amount and method of payment,
and various incidental charges;
• (7) Whether the contract is assignable and if it
is, the conditions for its assignment;
• (8) Liabilities to pay compensation and other
liabilities for breach of contract;
• (9) The ways for settling contract disputes;
• (10) The language(s) in which the contract is
to be written and its validity.
• If the contract does not provide the terms
that are necessary to complete the
transaction, in some jurisdictions the contract
will not be enforceable. In others, the courts
will imply terms into the contract, terms that
may or may not have been intended.
Therefore, always review the contract to see if
it includes the required terms.
5.1.5 The structure of an international
business contract
• A formal written contract (Common Law
System) generally consists of the following
parts.
• (1) Title
• (2) Preamble
• ① Date of signing
• ② Signing parties
• ③ Each party′s authority
• ④ Place of signing
• ⑤ Recitals or WHEREAS clause
• (3) Body
• ① Definition clause
• ② Basic conditions
• ③ General terms and conditions:
• a. Duration
• b. Termination
• c. Force Majeure
• d. Assignment
• e. Arbitration
• f. Governing law
• g. Jurisdiction
• h. Notice
• i. “Entire agreement” clause
• j. Amendment
• k. Others
5.1.5 Cultural issues affecting
international contracts
• Success in foreign trade will depend on how flexible
one is in recognizing and respecting the culture of
other people. Cultural differences will affect not only
the negotiations with foreign traders, but also the
acceptance of the goods or services in foreign markets.
In a business context, culture is a set of rules that
govern the way in which commercial transactions are
conducted between people of different nations. These
rules dictate the etiquette, traditions, values,
communication, and negotiating styles of a group of
people. One must be aware of and sensitive to other
cultures, and must adapt the products and services to
the preferences of the foreign market.
• Cultural awareness will be most important in the
initial contact and negotiation, since in
subsequent contacts many of the rules will have
already been figured out. In making initial contact,
you should first establish whether the general
protocol in the country tends to be rigidly applied.
The next step is to determine what that protocol
is, especially for the issues that will arise at the
first stage of contract negotiations. These issues
include greetings, courtesies, business ethics,
decision making, gender, meeting formalities, and
business attire.
5.1.6 Cultural dos and don’ts of
negotiating contracts