Drafting International Trade contracts or, as they called in Ukraine, foreign economic activity (FEA) contracts, is a way of legally documenting the agreements reached by the parties to such contracts during negotiations.
WinnerLex provides legal services for drafting FEA contracts both for Ukrainian companies that work with foreign companies in international markets and for foreign companies intending to enter into International Trade contracts with Ukrainian businesses.
Drafting a foreign economic contract has its peculiarities, as the implementation of an International Trade operation is usually a more complex process than domestic operations within one country.
This complexity is due, among other things, to technical issues such as customs clearance of goods, cross-border transportation, the use of foreign currency as a means of payment, certification of goods, and more.
On the other hand, regulating the relationships between counterparties requires considering both the domestic legislation of the parties to the contract and the norms of international acts that apply in certain areas of international economic relations.
It is important to remember that it is not enough just to draft an FEA contract. It is necessary to ensure that it is properly executed later. Therefore, professionally formulated terms of an International Trade contract, which take into account and protect your company’s interests, will help avoid problems during the execution stage or at least minimize them.
WinnerLex attorneys have many years of experience supporting foreign economic operations and resolving disputes that arise during the execution of contracts in the field of International Trade activity. This experience allows us to prevent and minimize risks in the area of FEA for our clients at the stage of formulating the terms of the relevant contracts.
Currently, there are hundreds of templates for foreign economic contracts and examples of International Trade contracts available on the Internet. Some entrepreneurs are tempted not to spend money on hiring a lawyer and instead draft the FEA contract (agreement) themselves based on existing templates. However, this method of saving money can backfire and lead to problems during the execution of such “template” contracts. An inaccurately outlined algorithm for performing the agreements, unclear rights and obligations of the parties, and the absence of a dispute resolution procedure or its mismatch with the realities of a specific International Trade operation often lead to situations where it becomes very difficult, and sometimes even impossible, to protect the interests of one of the parties to the contract in case of a breach by the other party.
Therefore, it is obvious that drafting FEA contracts is better entrusted to professional lawyers in the respective field.
Drafting an FEA contract in English or reviewing an English-language draft contract from your partner and making changes to it is also not a problem for us.
DRAFTING FOREIGN ECONOMIC CONTRACTS includes the following services:
- Providing legal consultations regarding an international trade contracts;
- Participation in preliminary negotiations for the conclusion of FEA contracts on the Client’s behalf, correspondence with counterparties regarding the conclusion/amendment of FEA contracts, including in English;
- Working with the Client’s authorized specialists to clarify all details of the production process/logistics process and other aspects of the Client’s business activity necessary for the proper formulation of contract obligations;
- Drafting drafts of an International trade contracts, both individual and of a typical nature, which the Client can use as a template when concluding similar transactions in the future (supply of goods, provision of services, transportation, credit, and other contracts);
- Analyzing the draft FEA contract provided by the counterparty for compliance with the Client’s interests, current Ukrainian legislation, and international law standards;
- Making changes and additions to the draft FEA contracts provided by counterparties to ensure the Client’s interests and compliance with current Ukrainian legislation and international legal acts;
- For our foreign Clients, we offer preliminary legal checks of counterparties in Ukraine to identify potential risks in their activities.
Practice experience: 19 years
Specialization: litigation support, tax, customs and antitrust practices, agricultural law, IT and M&A
Practice experience: 21 years Specialization: support of economic, civil, labor and administrative disputes, energy
Practice experience: 11 years Specialization: tax, customs and corporate disputes, support of inspections, contractual activities
Practice experience: 6 years
Specialisation: business and civil law, tax and customs practice, corporate law, registration and reorganisation of business
Practice experience: 11 years Specialization: support of economic, civil, labor and administrative disputes, inspections
The need for the detailed documentation of oral and preliminary written agreements reached between the parties is one of the guarantees of the quality of drafting foreign economic contracts (FEC). The established practice of relationships between the parties to the contract, as well as the norms of international law and international business customs applicable to the specific contract, should be taken into account.
One of the important tasks of a foreign economic contract is to ensure the possibility of protecting the rights of a party in case of breach by the counterparty. Therefore, the contract must clearly outline all the main obligations of the parties and the sanctions for their violation.
When drafting an international trade contract, it is important to analyze the tax nuances that will arise as a result of carrying out the foreign economic transaction.
A very important aspect when drafting a foreign economic contract is the choice of law (legislation) applicable to the relations between the parties. The contract terms should include references to international documents and national law, the provisions of which the parties will follow when fulfilling their obligations.
As a rule, the text of an international trade contract for the supply of goods refers to the Incoterms rules. In addition, the contract must comply with the requirements set forth in the Law of Ukraine “On Foreign Economic Activity” and the Regulation on the Form of Foreign Economic Agreements.
An international trade contract must include the following sections and details:
- Title, contract number, date, and place of conclusion;
- Preamble specifying the names of the parties and the individuals signing the contract on their behalf;
- Subject of the contract, defining the goods (works or services) to be delivered (performed);
- Quantity and quality of the goods (scope of works or services);
- Terms of delivery (acceptance of completed works or services);
- Contract price, payment terms, and deadlines;
- Procedure for acceptance of goods (works or services);
- Packaging and labeling (for goods delivery);
- Force majeure circumstances;
- Penalties and claims;
- Dispute resolution procedure;
- Locations, mailing, and payment details of the parties.
The contract may also specify the following conditions: insurance of goods, quality guarantees, terms of engaging agents and carriers, determination of loading (unloading) standards, conditions for transferring technical documentation for the goods, preservation of trademarks, procedure for payment of taxes and customs duties, provisions regarding the effective date of the contract, the number of signed copies of the contract, and the procedure for making amendments to the contract.
