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Signing International Commercial Contracts: 14 Hints

Signing International Commercial Contracts: 14 Hints (Part 1)

Favorable business contracts are contracts that are entered clearly and transparently. In these contracts, various conditions and issues should be stated and predicted as much as possible. In entering a commercial contract we must pay attention to various legal, technical, formal and substantive points.

Legal points are the most important part of business contracts. These points include the wording of the contract, the rules governing the contract, customs, burden of proof and evidence that must be observed in the text of the contract. In this article, we are going to state 14 points and principles necessary to enter a safe and favorable business contract.

The general principles of commercial contracts including the conditions of validity of the contract, the parties to the contract, the title of the contract, the subject of the contract, the place of conclusion of the contract, the place of execution of the contract, the amount of the contract and how to pay, guarantee of performance, conditions included in the contract, right of termination, appendices, governing law, cases of force major, dispute resolution authorities and etc.

1) Validity Conditions

For the validity of all legal contracts, even international commercial contracts, a series of conditions must be met, which according to Article 190 of the Civil Code are: a) the intention and consent of the parties, b) the competence of the parties, c) the specific subject to be traded, d) the legitimacy of the Transaction.

2) Parties to International Trade Agreements

Every contract has two or more parties, whose details must also be stated in the contract. The noteworthy point in this regard is that there are differences between entering the details of a natural person and a legal person in terms of entering details.

a) Characteristics of the Legal Person

The specifications of legal entities in commercial contracts include the legal entity’s name, registration number, national ID, and its address. In the case of legal entities, the effects of the contract are related to the legal entity of the company, not the managers. Also, the company itself is responsible for the implementation of its obligations, unless it has been violated in the contract.

b) Characteristics of a Natural Person

The details of natural persons include their identity and address. Also, in setting up a contract for natural persons, we must also pay attention to the parties’ qualifications for entering the contract.

The two important points regarding the address of the parties to the contract are that, first, the address of the parties must be mentioned accurately and an address must be chosen that the parties have access to it, because all notifications will be sent to this address. Secondly, if there is a change in the information of the parties later, it should be mentioned in the contract annex.

3) Determining the Title of International Commercial Contracts

Specifying the title of the contract when setting it up defines the overall scope and framework.

4) The Subject of International Commercial Contracts

Since the subject of the contract determines the extent of the commitment of the parties, it must firstly have a rational benefit and be surrender-able, and secondly, it must be present and clear.

5) Place of Entering the Business Contracts

Determining the location of the contract is very important and necessary because it determines the competent court in dealing with disputes arising from the contract.

6) Place of Execution of Commercial Contracts

In contracts with the obligation to provide services or deliver goods, where cases such as the cost of delivering goods, the risk and risk of product loss, the responsibility of the seller and the effect on the payment of the contract amount are discussed, it is necessary to determine the place of execution of the contract.

Up To Sum

As stated, it is necessary and decisive to comply with some principles in entering international commercial contracts. Both in relation to the parties and in relation to the rules governing contracts and international societies. We discussed some of these principles in the first part of this article. We will explain other principles in the second part of the mentioned article.


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