Home Q&A Forum What legal protections exist for me as a small business owner in the United States entering into an international contract?

Business

International Contract

California

Asked on Dec 28, 2024

What legal protections exist for me as a small business owner in the United States entering into an international contract?

As a small business owner in the United States, I am considering entering into an international contract with a supplier based in a different country. I am concerned about the potential risks and legal challenges that may arise from conducting business across borders. I want to know what legal protections exist for me in terms of contract enforcement, dispute resolution, and intellectual property rights, as well as any other important considerations I should be aware of before entering into an international contract.

Answers from 1 Lawyer

Answer

Business

California

Answered 546 days ago

Hello! My name is Dolan and thank you so much for coming to the site. So the contract itself is going to be the most important piece of protection. The law doesn't provide for specific protections for individuals or businesses entering into international agreements, but the contract itself, and its terms, are what you need to pay close attention to. If you are selling goods, then there are some rules that help clarify what AI said earlier. The first is the Contracts for the International Sale of Goods (called the CISG). The CISG applies automatically if both parties to the contract are located in countries that have adopted the treaty unless the parties specifically agree to opt out of it. It covers many aspects of a sales contract, such as the obligations of the buyer and seller, delivery of goods, payment, breach of contract, and remedies for non-performance. In other word, the CISG is kind of like a default set of rules for cross-border contracts unless you opt out of it, so knowing whether it helps or hurts your position is worth looking into. When it comes to intellectual property, be proactive. Just because you’ve got protections in the U.S. doesn’t mean they automatically apply abroad. Consider registering trademarks or patents in the country where your supplier is based to prevent them from using your intellectual property without permission. So what do I recommend you do? 1. Put in the contract what state is going to be the state for lawsuits (e.g. California); 2. Put it in writing! We can draft it up for you just let us know!

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Can a party terminate an international contract if the other party fails to perform due to COVID-19 pandemic?

Can a party terminate an international contract if the other party fails to perform due to the COVID-19 pandemic? I am a small business owner who entered into a contract with a foreign supplier to provide goods for my business. However, due to the global impact of the COVID-19 pandemic, the supplier has been unable to fulfill their obligations. I am concerned about the potential legal consequences of terminating the contract and the possibility of facing breach of contract claims.

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Hi, What you are likely looking for is a deep dive into your international contract's "Force Majeure" clause with a qualified attorney.

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Whether an international contract may be terminated due to force majeure depends on whether the contract includes a "force majeure clause" that defines those events that are beyond the control of either party and would render contract performance impossible. Typical force majeure events could include, war, natural or man-made disasters, "acts-of-god", civil turmoil, etc. Disruptions to global supply chains due to the Covid-19 pandemic could be considered a force majeure event if it is identified as such in the force majeure clause of the contract. To determine the legal consequences and liabilities of terminating the contract the contract should be reviewed by a qualified lawyer to evaluate: whether supply chain disruptions due to Covid-19 qualifies as a force majeure event; whether there are notice requirements for declaring a force majeure event; whether the notice requirements (if any) have been properly satisfied; whether the Party declaring a force majeure event must take mitigating actions, etc. You should consult with a qualified lawyer to determine specific legal consequences and liabilities based on the actual terms of your contract.

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What legal protections exist for me as a small business owner in the United States entering into an international contract?

Answers from 1 Lawyer

Dolan W.

Matthew F.

Faryal A.

Heather B.

Benjamin W.

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