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International Commercial Contract: Part 1

Home > International Law | Published 2011-02-24

As lawyers experienced in international and business law, we are increasingly viewed by our clients as active participants in business life, particularly in reference to our execution of international commercial contracts.

I - Current issues of international commercial contracts

Historically, commercial contracts have economically linked major developed countries, specifically via French-American, French-Canadian, and German-French contracts, etc. ...

Since the end of the 1980s, globalization has given rise to new international relationships, including the questioning of destinations for outsourcing, such as the Maghreb, India, China etc. ...

For example, China is now the second largest trading partner of the EU (and the EU is the largest trading partner of China). From January to September 2008, the volume of trade between China and the European Union reached $322.5 billion USD. In other words, the economic and trade relationship between China and the EU is rising at an accelerating rate, therefore, our foci contain proportionally more and more problems involving Sino-European relationships , more specifically French-Chinese relationships.

In particular, we now represent matters concerning the delay or failure to deliver goods from China (audio-visuals, textiles, electronics ... etc.).

In this regard, international law differs from contract law in that international trade practice has replaced the internal rule of the payment on delivery and the rule of documentary credit. It is the obligation of the bank to pay a stated amount to the supplier of goods or services, within a specified amount of time, and furnish documents which prove that the goods were shipped and the benefits or services were performed. Despite the proven efficacy of this practice, disputes remain.

Also, with the development of joint ventures, we have acknowledged new forms of international commercial disputes. The term joint venture is defined as a specific project for which several joint enterprises have been formed. In general, it is an alliance of technological and industrial activities involving engineering, production, distribution and more.

Joint venture contracts are extraordinarily complex entities in which time is an essential element. It is the same for long term supply operations and the operation of the concession contract know-how, trade agency ... etc. In all these contracts the factor of "time" is often the cause of most problems. Without much notice, a commercial agent is suspended from office by his foreign principal or conversely the grantor can no longer rely on the agent in his country of implantation; in both cases, the relationships are deep-rooted, therefore it comes as a shock to both parties.

It is clear from these examples that the globalization of trade, especially since outsourcing became a viable option, has resulted in new challenges and problems: Where to relocate? What structure to choose? Will this cause significant tax problems? What are the risks for economic agents?  Will trade be disrupted?

As attorneys, we can respond to these questions using our vast arsenal of experience in business and international law.

This article is available online for public information purposes. It is updated regularly, as needed. Due to the constant evolution of the laws and the legal system, we cannot guarantee that the information in this article is still applicable. We invite you to contact us with any legal questions or concerns you have regarding this topic at +33 1 56 79 11 00. In no way can this firm be held liable for articles that contain inaccuracies or are now out of date.

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