Explanation of International Trade Contract
An international trade contract is a contract that has at least one transnational component. The meaning of the transnational element is that either one of the parties is not Iranian or the place of execution of the contract or the major obligations resulting from it, is outside the territory of Iran. Of course, based on the conventional definition in international conventions, if the place of entering and execution of the trade contract is the territory of a country, the different citizenship of the parties will not make it an international trade contract. It should be noted that entering international trade contracts requires international skills and knowledge.
Such contracts are entered between natural or legal parties according to the trade law of each country or the international trade law, and obliged the parties to fulfill the obligations contained in it that have been accepted by them.
Types of Contracts in The International Arena
Among these contracts, we can mention purchase and sale contract, franchise agreement, exclusive sales agency contract, exclusive importer contract, exclusive distributor contract, export contract, import contract, etc.
Principles Governing the International Agreement
Considering the economic and commercial complexities, it seems necessary to observe some principles to guarantee the fulfillment of the obligations arising from the contract.
Among the important principles of trade contracts, we can mention the title of the contract, the parties to the contract, the duration of the contract, the place of entering the contract, how to deliver the subject of the contract, the amount of the contract and how to pay it, the obligations of the employer or the buyer, the obligations of the executor or the seller, good performance bond , cases of contract termination, unforeseen or force major events, settlement of dispute authorities, delays and prediction of late payment damages, not assigning the subject of the contract to others, informing the parties about all the characteristics and specifications of the contract, absence of an intermediary, residence of the parties, legal deductions, warranty and guarantee.
The importance of these principles is revealed when we know that the first condition for creating a secure legal relationship between two parties in a commercial contract is to set the contract based on the basic principles of contracts.
Fulfilling These Contracts
After setting up commercial contracts in accordance with the necessary and essential principles that we stated earlier, it is time to fulfill the contract. In accordance with the principle of relativity of agreements, the fulfill of the provisions of the contract is the responsibility of the parties and the international contract is performance according to the governing law chosen by the parties.
According to the aforementioned principle as well as the principle of sovereignty of will, in addition to the fulfill of the contract, solving the resulting problems is also the responsibility of the parties themselves. Among the possible problems that may arise in the fulfill of such contracts are as follows:
• Problems caused by resolving the conflict of laws to choose the law that governs the executive provisions of the contract.
• Difficulties due to by settlement of dispute.
• Questions are arising by different legal concepts.
• Issues arise by lack of information.
In many cases, these problems are caused by the drafting of business agreements by non-experts and against the basic contractual and commercial principles. Therefore, it is necessary to use legal experts in this field in order to set up such contracts.
Concluding Remarks
In the end, it should be said that the condition of entering a reliable business contract is the use of basic business principles. In addition, in such contracts, it is proper for the parties to trust the principle and adhere to their contractual obligations. For more information, you can read the article of international trade agreements.
Related Posts
1. We know the value of managers’ time!
