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International Contracts: kinds and elements

An international contract contemplates a operation between two companies which are established in differente countries. Therefore, it deals with different judicial systems.

Trust in the experts... Contact us and book a session sobre cómo formalizar una operación internacional! Así no deberás preocuparte por malentendidos en tus relaciones comerciales…

Their funcion is to fix the obligations and rights of each party.

Conoce aquí cómo funciona el reconocimiento y ejecución de las decisiones judiciales tomadas en el extranjero.

Elements of an International Contract:

Personal elements: those parties, legal or natural persons involved in the contractual relationship. Their capacity to contract and their legal or voluntary representation by other persons must be verified. The location data, full name, type of company, address, city and country must be accurately indicated. In addition, tax data and data of the representatives who sign on behalf of the company.

Formal elements: There is no strict rule as to the form of contracts. This is established by the Vienna Convention on the International Sale of Goods

of 1980.

Real elements: those lawful goods and/or services to be exchanged by the parties.

Characteristics to be taken into account in an International Contract

Accurate drafting.
Adaptation to the legal culture of the other party.
Search for cooperation between the parties.
Use of contracts in bilingual version.
Formation of the contract.

The most recommended contract to sell internationally:

International Sales Contract.

This is the only contract subject to supranational legislation, through the United Nations Convention on Contracts for the International Sale of Goods, also known as the "Vienna 80" Convention, since it was signed in Vienna, Austria, on April 11, 1980.

In this agreement, the exporter undertakes to deliver certain goods, while the importer undertakes to acquire them under the agreed terms of payment, delivery and term.

¡This contract will help you export products such as mezcal!

Differences between an International Sales Contract and an International Export Contract

Both represent an international operation. The difference is that in Sales, each operation represents a sale in itself. Additionally, it is not a long term agreement for the supply of products.

Export, on the other hand, is specified in goods for resale. In this case, the buyer is an importer, distributor or wholesaler, who will sell the products to another company or merchant.

Conoce aquí la ley aplicable a un Contrato Internacional!

Other types of contracts that will help you to start operating abroad:

International Commercial Representation Agreement:

Unlike the agency agreement, this one grants the power to the Representative to negotiate and conclude operations in the name of the company.
The Representative shall offer products or services strictly according to the clauses that the company has indicated to him/her.

International Distribution Agreement:

When the producer (exporter) appoints a distributor in another market.
The distributor will be an intermediary that will resell the products to final customers.
It is normal to grant product exclusivity to the distributor.
It is normal for the distributor to be subject to sales targets.

International Commercial Agency Agreement:

One party (principal) entrusts the other party with the promotion of foreign trade operations on an ongoing basis, without assuming the risk of the operations.
The agent's remuneration is established through sales commissions.
En la Unión Europea este contrato está someti

International Strategic Alliance Agreement:

It regulates relationships between companies that wish to achieve mutual benefits.
It can be: conducting a research project, designing and manufacturing new products, sharing customers and business networks.
It does not imply the creation of a partnership. In this case the best option is a Joint Venture contract.

International Service Contract:

It regulates the commercial relations between the Service "Provider" and the "Customer" located in a different country.
Examples of services: business management, engineering, technology, software and web services, advertising and design, market research, education and training.
One of the best options for your startup to start operating abroad.

International Joint Venture Agreement:

When two companies from different countries form a company in the country of residence of one of them.
The purpose is to carry out activities such as: research, commercialization, production, etc.
The most important aspects of this contract are: purpose and capital stock, valuation of contributions, organization and administration, decision making and dispute resolution.

Sources consulted:

ProMexico: Contratos Internacionales

Eur-Lex

Oscar Perez