What You Should Know About an International Contract

An international contract is a formal agreement between two or more companies or natural and legal persons from different countries. The purpose of these contracts is to establish communication and cooperation and define commitments. The importance of these contracts in relation to economic growth and development, especially in developing countries, is very prominent. International contracts can cover various matters such as purchase and sale, distribution, service provision, joint investment, and franchising.

Key issues in drafting these contracts include precise identification of the parties, explanation of the contract subject, determination of duration and parties’ obligations, and financial matters. Also, ensuring the enforcement of the contract through guarantees and other methods is of significance. Types of international contracts vary and can include international sales contracts, distribution, agency, sales representation, financing, international production and service provision, strategic alliances, and franchising. Each of these contracts has its own specific features and obligations.