Business contracts are complex enough when dealing with a transaction happening in a single jurisdiction. When an international business enters into a contract, the complexity of a US contract pales in comparison. Besides having to deal with the basic content of the contract, you also have to understand such issues as national sovereignty and foreign export controls – not to mention having a foreign language translation of all the documents.
First and foremost is the Choice of Law Clause. This clause lets a party to the contract choose which country – and therefore which legal system – will govern the contractual relationship. In other words, if a dispute arises from the contract, the Choice of Law Clause will determine which laws will apply. Needless to say, this is an important clause, not only because of the differences in legal systems, but because of the extra expenses and difficulties one will face when navigating through a foreign legal system – including finding a foreign language interpreter and translator and securing foreign language translations of all applicable laws and documents.
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