How to avoid legal conflicts with overseas vendors or suppliers

Contracts are designed to solve problems and prevent lawsuits — not create them. But it can be particularly tricky to negotiate a good contract with your overseas business contacts. If you’re trying to establish a working relationship with overseas vendors and suppliers, here are some tips that can help you avoid trouble.

1. Negotiate in good faith

Never let the pursuit of a good deal steer you away from your legal obligation to negotiate in good faith. If you feel like the other side isn’t doing the same, it’s better to walk away than resort to tactics like hiding information.

2. Understand what your contracts say

When you’re doing business with a foreign company, don’t take chances with unfamiliar terms. Make sure that the other party also understands what your contract terms mean — before you sign. Unfamiliar terminology can be a trap for both sides.

3. Don’t overlook foreign laws (or those of the United States).

Bribery and business go hand-in-hand in certain places but engaging in it yourself will run you afoul of the Foreign Corrupt Practice Act. However, you also have to be aware of the laws of the other countries in which you do business. For example, in some countries, your contract could be invalid if you don’t have it translated into the other party’s language of origin.

4. Address the potential of disputes

No good contract can avoid discussing the potential for problems. If you and your foreign vendor or distributor can agree on reasonable solutions in advance of any problems, you’re much less likely to end up in court.

If a business dispute does arise, sorting through the complex issues involved in your contracts can be difficult without experienced legal advice. Find out how our office can help you understand your options.