The International Trade Contract
The top law firm in Italy Damiani&Damiani has developed the guide to know how an international trade contract is made for the commercial activity of SMEs and large companies.In a globalized world, international sales, sales, leasing, franchising, factoring, exclusive distribution , patent licensing and know-how generated by an international commercial contract are increasingly widespread (see also international trade contract templates)
To understand what are the relationships and the legal effects that an international commercial contract generates, it is good to understand how it was born and what are the main problems to be addressed for its drafting. Starting from the entry into Italy for work reasons by the foreign entrepreneur.
The law applicable to the international contract
The types of international trade contract are not different from those governed by national laws. The problem arises in trying to identify the law applicable to the contract and the jurisdiction to settle disputes arising from non-compliance with international contractual obligations.In the simplest cases, the contracting parties regulate the applicable law and the jurisdiction to settle international disputes already in the terms of the contract (see also the main terms of the international contract). As international business relations are becoming increasingly frequent, national states and the EU have been working for several years to standardise the rules of international trade law through widely applicable and globally recognised international conventions and treaties. Of these, the most important are:
- Brussels Convention of 1968
- Rome Convention of 1980
- Community Regulation 593/2008
- Vienna Convention on the International Sale of Goods of 1980
- Private Collections of Principles and Uses of International Trade prepared by the ICC, UNIDROIT, INCOTERMS.
The legally relevant official language of the contract
Having identified the model of the international contract and the purpose for which the parties conclude it, it is necessary to identify the legally relevant official language with which to write the contractual obligations and clauses in order to make them uniform, unambiguous and comprehensible.Generally we choose English for two reasons:
- It is a universal language and puts the parts on the same level
- The English legal discipline is based on the principle of the word evidence rule, a principle that is also found in the legal discipline that is inspired by the Latin rule in claris non fit interpretatio.
In practice, the court cannot interpret the contract if the will of the parties is clear.
Jurisdiction. Ordinary Judge. International arbitration
Since international contracts are subject to rules and standards that are not perfectly defined and/or those of several legal systems, it follows that it is equally difficult to resolve any conflicts arising from the default of one of the parties. However, the contracting parties have the possibility to choose a priori both the national law to be applied and the competent court to judge any breach of contract, or to choose to rely onInternational Arbitration (laws also International Arbitration).
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