International contract law is a branch of private international law, which relates to the cross-border dealings of individuals or companies. This differs from public international law, which concerns the interaction between governments and other state agencies
An international contract is a legally enforceable agreement between two or more parties that creates a legal obligation between them. These rules related to contracts can vary substantially between different types of legal systems. In common law jurisdictions, for example, the participants in a contract are typically allowed a very wide scope concerning the terms of the agreement and the repercussions of breaking the pact. In civil law jurisdictions, however, established legal principles are often applied to individual contracts.
The most basic element of any contract is the mutual agreement between two parties to participate in an arrangement. Common law jurisdictions typically require consideration in a contract, meaning that both sides receive something of value as part of the contract. In civil law countries, however, consideration is not considered a necessary component.
Historically, merchants developed their own sort of international contract law. Traders wanting to deal despite differences in language, culture and laws developed their own code for international dealings. These rules have evolved into the good faith contract laws of today.
The volatility of market conditions has raised the importance of high quality international contracting. It is critical to expand the trading base and to spread risks. On the other hand, it is also critical to be able to withdraw from markets and to maintain flexibility. International trade has many nuances, requiring appreciation of differing ethical standards, business practices and norms. Many companies have misjudged their trading partners or a country’s economic stability and taken huge losses as a result.
A further influence will be regulation and the development of rules and practices that are outside of today’s legal systems. For many of us, the growth of international trade has driven an increased need for contracts and commercial expertise. Crossing cultural, linguistic, legal and ethical boundaries has obliged us to undertake careful assessment and management of risks. Yet this too is changing – not least because such uncertainties place heavy costs on business transactions.
Those in the world of contracting will not be immune from this content driven world. Roadblocks will not be tolerated, and for many, traditional contracting process and practice will be seen as either a roadblock, or as something increasingly irrelevant to modern commerce.
As in many other countries, until recently the management of contracts in India was seen as a largely administrative task. Large businesses might have a dedicated contract administration department; in others, it was perhaps a duty performed by Sales or Project Management. And for contract drafting or negotiation support, the role would generally fall to lawyers (who interestingly often report to the head of Finance).
Like so many things in modern India, this picture is changing fast and it is reflected in the creation of the new ‘Indian Association of Project Contract Administration and Management”. This title reflects today’s reality – and perhaps indicates that the professionalization of contracting may follow a slightly different path in India.
So what has caused this rapid change? Mostly it is of course the tremendous success that India is having in penetrating global markets, both through its dynamic domestic companies and also due to its well-educated and highly motivated workforce. This emergence onto the world stage has been accompanied by the need to develop world-class standards – including the ability to negotiate and manage trading relationships and commitments through robust contracts. International operations demand more disciplined procedures for defining and managing business risk and trading relationships, and ‘contract management’ provides a critical component.
We specialize in US laws as well in Indian laws.
We specialize in US International contract law and International law /treaties and conventions such as:
UN Convention on Contracts for International Sale of Goods (CISG)