Signing International Commercial Contracts (Part 2)
Of the 14 hints of signing international commercial contracts, six have been discussed in Part 1,and the other eight hints will discussed in this part, Part2.
7) Amount and Method of Payment in Contracts
The exact amount of the contract and the terms and conditions of its payment must be specified in the contract. The method of payment may be cash or credit. If the method of payment is credit, its deadline should also be mentioned. If no fixed date for payment is mentioned, the payment will be immediate based on Article 344 of the Civil Code.
8) Performance Guarantee
Determining the performance guarantee will give peace of mind to the parties of commercial contracts and is a support for the correct implementation of the provisions of the contract. If the provisions of the contract are not properly implemented, the performance guarantee can be applied and one’s rights can be secured in the contract.
9) Conditions Included in the Contract
Adding conditions in the text of the contract will be possible only with the agreement of the parties. In adding terms, we should also pay attention to include even the verbal terms raised in the meeting in the text of the contract; otherwise, we will face difficulties in terms of the burden of proof of possible violations.
10) Inserting the Termination Condition
The exact meaning of termination is the term termination clause. This means that, for example, we specify in our commercial contracts that if the contract amount is not paid by the specified deadline, the contract will be canceled.
All additional and side information that cannot be included in the text of the commercial contract can be included in the appendices section. Such as: pictures, maps and etc.
12) Governing Law
In determining the governing law based on Article 968 of the Civil Code, we face two situations:
a) If there are non-Iranian parties in the international commercial contract, the principle of sovereignty of will is established in relation to them. This means that they can determine the law governing the contract by themselves.
b) If one of the parties to the contract is Iranian, regardless of whether the place of entering the contract is in Iran or outside of Iran, Iran’s law necessarily prevails.
13) Force Major (Cairo Power)
This term refers to events that make it impossible to fulfill the obligations arising from the subject of the contract, and on the other hand, preventing them is beyond the responsibility of the parties. Delays caused by force major events will not terminate the contract. In commercial contracts, cases of force major must be clearly specified and the consequences thereof must be clearly stated.
14) Dispute Resolution
To resolve possible disputes arising from commercial contracts, we can act in three ways:
a) First, it should be raised in a delegation composed of representatives of the parties and try to solve it through friendship, peace and compromise.
b) If the disputes cannot be resolved amicably, at the request of any of the parties to the contract, the competent court can deal with it and issue an appropriate ruling. It should be noted that the principle of jurisdiction of Iranian courts in dealing with contractual disputes must be stated in all foreign contracts. Decisions issued by Iranian courts will be definite and enforceable.
c) If the jurisdiction of Iranian courts is not accepted by the foreign party to the contract, it is possible to refer to arbitration. The condition of referring the matter to arbitration should be included in the contract.
Up To Sum
We reviewed 14 hints about the signing international commercial contracts together. Individuals do not have any special restrictions for concluding business contracts, even if the party to the contract is a foreigner. However, it should be noted that the contract is not against the laws of the country and the principles mentioned in the first and second part of this article should be observed.