Herewith it is important to take into consideration that the contract is the main legal basis for counterparties, which regulates their relations in general, and it will play a central role in resolving a conflict situation in case of a dispute between them. That is why, with no doubt, the fact of how thoughtfully and efficiently the international contract was drawn up will be an important component of foreign economic activity.
This article proposes to analyze the basic mistakes that are usually made while entering into the international purchase contract for the subsequent prevention of these mistakes. Let’s start from the most common mistakes that are committed by entrepreneurs.
For instance, in case of entering into contract, the status of the partner is not always checked (namely, its legal status, where it is registered, what is the scope of its legal capacity), neither its financial position and commercial reputation, nor the authority of its representative to enter into a contract.
The next aspect is the insufficiently clear formulation of the terms of the contract. This situation can happen in case of inaccurate translation of agreement, and as a consequence, each Party will consider its own version of the treaty translation to be authentic.
Particular attention should be paid to the applicable law, according to which the contract is regulated, because in different legal regimes, various and sometimes conflicting requirements are applied to the same transactions.
There are also mistakes in the application of international legal customs, which are contained in Incoterms. Inaccuracies are often made in contracts while using trading terms, for example, basic terms of delivery.
More information about the most common mistakes which are made while entering into the international contracts you can read in the book “Security of purchase contracts of goods and services”.