Before you enter into an agreement with a foreign contractor, it would be advisable to verify your contracting party. In the case of firms registered within the EU, it should not be difficult as in most countries of the Community there are state registers of entrepreneurs where there can be found basic information concerning those entrepreneurs such as the date of their establishment, the amount of the share capital, their seat and address, information on partners or shareholders, as well as information with respect to bankruptcy or recovery proceedings. It is also of importance to check the data of persons representing the company as it may affect the validity of the concluded contract. In the event of entities from outside the European Union, the actions mentioned above are more complex. In the case where there is no state commercial register, a copy of which should be submitted by the other party to the contract, it would be recommended to use services of specialized firms such as legal offices or business intelligence agencies.
When assessing a foreign partner, it should be remembered that there are many ways of securing just interest of parties. Where there are objections to the partner's solvency (it usually can be indicated by the amounts of rates related to the insurance of payments), it would be advisable to consider including in the agreement provisions concerning advance payments, guarantee policies, deposits or bills of exchange. Such clauses should be contained in each commercial contract.
Each agreement of the international nature requires determination of its governing law which is to be applicable in a situation of a potential dispute. Both the governing law (domestic or foreign) and the court competent to resolve potential disputes should be selected at the moment of drafting a contract by including appropriate clauses in its contents.
One of the most essential elements of the contract in question is a precise description of its subject. The agreement should also include provisions stipulating deadlines for its performance, as well as concerning the issue of consideration. It is worth including into a contract provisions with respect to stipulated penalties in the event of a breach of conditions of the transaction. Each agreement should also provide for the protection against the influence of extraordinary circumstances including force majeure and unforeseeable difficulties. A contract must also allow the possibility of its termination with notice or even with immediate effect in the event of a breach of the contract by the other party.
When entering into an agreement with a foreign contractor, there should be carefully selected the language of such contract. The safest solution is to draw up a bilingual contract with two language versions (for both contracting parties). However, such agreement should stipulate which language version is binding.
It is also of importance to take into consideration the Incoterms rules. These are rules concerning deliveries, applicable to the international trade. They stipulate such issues essential to parties as costs, insurance and the responsibility for delivery of goods to the place of destination.