International contracts: a general introduction
International contracts are an important instrument used by enterprises in order to establish commercial relationships with foreign partners. By considering, for now, just the paper-based form of this kind of relationships, it is clear and well known that there are many types of international contracts: if we focus our attention just to the duration of the commercial relationship, we can easily mention the classic “international sale contract” ( that will have normally a short duration because it will be concluded just with the transfer of the goods following the payment of a price) or other types, such as the “international distribution contract” or the “international joint venture contract” (in which in both cases it can be assumed the will of the parties to establish a “long term” commercial relationship).
It is not the intention of the author to analyze all these contractual types singularly, but mostly to introduce the general features of international contracts as such and, subsequently, to develop some reflections and deepenings, starting from the paper-based contracts previously mentioned, to the electronic ones.
So, therefore, it is possible to affirm, that an international contract is an agreement established between two economic subjects having their places of business in different countries, with the will of reaching mutual economic benefits from this agreement.
By accepting peacefully the fact that an agreement between two companies is made because they want to reach a mutual economic benefit, the first characterizing element emerging in this definition is "different countries": it means that probably the parties have a different culture, a different way of thinking, a different language and, of course, a different system of laws regulating the contractual matter.
Having a different legal system can be determined by the different legal tradition (common law or civil law tradition) or, as sometimes happens, the legal tradition is the same, but the rules concerning the same field, are different (as it is possible to notice in the case of UK and USA, despite the fact that they belong to the same common law tradition).
This is the problem of the “applicable law” to an international contract, that has to be accepted by both parties, because it will regulate all the aspects of the agreement, from the concrete execution of the provisions object of the obligations, to the features of the so called “internal remedies” (penalty clauses and/or liquidated damages) and “external remedies” (dispute's resolution in national court or the choice of the international arbitration) in situations of conflict between the parties. Every solution and every term provided by the contract has to be compatible with the applicable law.
In the next article, we will see which are the solutions in terms of choosing the applicable law, offered by the legal discipline.