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The key aspects of understanding international contract law May 12, 2017

The key aspects of understanding international contract law

What is international contract law?

International contract law refers to a list of legal rules relating to international agreements. When you are conducting business in different countries, you need to enter into contracts to ensure that you are covered. The contract is governed by the international contract law unless they want to abide by the law of the United Kingdom.

The contract law is usually based on good faith and fair contracts; the contract law is enforced in most jurisdictions. Contract law ensures that unfair contracts and deals are not enforced so contractors and clients are treated fairly. The law is governed by the United Nations Convention on contracts for international sales of Goods from 1980. The law was created to ensure that companies felt comfortable to trade internationally and not feel threatened by losing money. It was also put in place to promote international trade between countries; the convention is a compromise between civil, social and common law.

Contract management process

  1. The first step is to nail the procurement planning to ensure that you have the upper hand over different companies. At this stage you will need to be sure to go through the project to analyse and record any services that are required. To effectively manage the international contract, the contracts manager will need to conduct market research and have extensive knowledge of the contract.
  2. Once all the information has been gathered, it’s time now to complete the bid and to review all the bids from outside parties. After you have completed the bid review, it’s time to make your choice. Once you have begun your final discussions with the contractor, it’s important to also ask an outside party for the costing.
  3. Once the contract has been signed, it is now time to conduct risk monitoring, milestone reviews and performance measuring. This ensures that the contractor is completing their work agreed as per the contract, this is key to the managing process.

International contract negotiation

Contract negotiation is very important in today’s global business.  When conducting international business, you might struggle with some negotiation issues that you haven’t expected to encounter. An example can be that force majeure be grounds of non-payment of debts or that the insurance liability should be capped.  This could occur because the person on the other side is not used to international law, this is when you need to educate the other party on the company practices or meet them half way. The back and forth can be very frustrating but you can gain some credit with calling the international company at their time zone or fly to them to ensure that the negotiations are dealt with face to face. London TFE are offering an International contract negotiation course, which offers business managers an opportunity to fully understand international contract law and help them to develop their negotiation skills.

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