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Different values and rules across borders

In today’s globalized economy, even small companies may find themselves doing business with overseas partners. In recent years, transactions with China and other Asian countries have been increasing. In cross-border trade and investment, you will be dealing with counterparties that have different business practices and commercial customs, so it is essential to conduct prior research on the counterparty and on the country in which you plan to trade or invest.

Advance risk management is essential in international transactions

In domestic transactions, it is not uncommon for parties to conduct business without entering into a formal written contract. Even if a dispute arises in a domestic context, the applicable rules—such as laws and established commercial practices—are relatively clear, which makes it easier to anticipate the scope of potential risks.
By contrast, in international transactions, if no written contract has been agreed in advance, then in the event of a dispute, even the threshold questions—such as which country’s laws should govern the contract or which country’s courts or dispute resolution bodies should have jurisdiction—may themselves become sources of conflict. If this happens, disputes that could otherwise be resolved may become intractable, resulting in unexpected losses.

At a minimum, businesses should consult an attorney and ensure that they have at least a basic contract in place that allows them to respond appropriately in the event of dispute. Our firm can assist with drafting such contracts and provides advice on a wide range of issues relating to international transactions.