The top 3 issues for negotiating cross border
Entering into an agreement with a foreign Company?
Before you sign on the dotted line here's our check list for
the must haves in any cross border contract:
A neutral choice of law clause
The foreigners probably won't let the contract be governed
by Australian law, so it's likely you'll need to meet
somewhere in the middle on this. Think "neutral" and
"global" when negotiating the jurisdiction as you need a
governing law which is stable and preferably similar to ours. With
Asia being a giant hub for foreign transactions we recommend opting
for Singaporean law as a good compromise.
A reliable dispute resolution process
Your contract needs to have a process for resolving disputes
which is reliable, neutral and cost efficient. First, the contract
has to be clear about what is required to trigger the dispute
resolution process and what each step involves. Courts have found
that clauses which simply leave it to the parties to agree on other
methods of resolving the dispute before they can proceed to
litigation are uncertain and unenforceable. Do you want to hold a
meeting between the commercial parties first? Will mediation be
optional or mandatory? Will you require an expert to determine any
issues that are more technical? All of this must be clearly
Secondly, we recommend arbitration rather than court litigation.
Arbitration allows the parties to agree on where it will occur,
what language the proceedings will be conducted in and which rules
will apply to how it's run. Far better than finding yourself in
the courts of a foreign land.
A catch all for anti bribery and foreign corruption laws
If you're entering into a contract with a foreign company
then you're likely to have exposure to the anti-bribery and
foreign corruption laws made in recent years by the US, UK and
Australia. These countries' laws catch dodgy conduct by their
own nationals or companies, anywhere in the world. The penalties
include big fines and imprisonment and the only real safeguard
against breach is to have rigorous anti-corruption policies in
place. Your contract should address this.
We do not disclaim anything about this article. We're
quite proud of it really.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The TPP could have a significant positive impact on the investment and financial services of Australia and Singapore.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).