5 Tips for Drafting International Terms and Conditions of Sale

Published on 18 September 2023 in Cash management

As an international debt collection agency, we are well aware of our clients' challenges regarding unpaid debts abroad. We have often noticed that General Terms and Conditions of Sale (T&Cs) are too generic and not sufficiently adapted to the international context.

These common errors lead to conflict situations where debt recovery becomes more complex than usual.

Drafting T&Cs in an International Context

It is crucial to distinguish between specific terms and general conditions and ensure compatibility between the two. The General T&Cs should highlight generic aspects of the agreement, such as legal information (competent court, payment deadlines, terms), withdrawal clauses, incoterms, payment terms, force majeure clauses, non-competition, and confidentiality clauses. Specific terms should be tailored to the ongoing contract, possibly specifying the nature of the product or service, delivery times, return conditions, and warranties.

Applicable Laws and Jurisdictions

International T&Cs should specify the jurisdiction where disputes will be resolved and the laws governing the contract. This can vary depending on the country where you conduct business and your client's country.

Contract Language, Clarity, and Transparency

When drafting international contracts, it is best to translate your T&Cs into the client's language. If that is not possible, provide at least one version in English, the international language.

T&Cs should be written clearly and comprehensibly, avoiding the use of complex legal jargon. It is essential to specify the language in which the T&Cs will be written, while also including a clause stating that the version in the original language prevails in case of disputes.

Payment Terms and Recovery

To minimize risks associated with international commercial transactions, it is imperative to define payment terms clearly, including accepted currencies, payment deadlines, and penalties for delays. Given the differences in national laws, it is essential to remind the client of payment deadlines.

You may also require payment guarantees, such as advances, especially in contracts with countries where unpaid debts are common. It is recommended to have a prior contract with an international debt collection company, stipulating that any unpaid amount will be automatically transferred to this company.

Assistance from an International Business Professional

It remains essential to consult an expert in international business law to develop contracts tailored to your specific needs and ensure compliance with local and international laws and regulations.

Drafting robust international T&Cs is an effective way to protect your rights in case of disputes. However, it is important to take additional measures to ensure payment, as unpaid debts abroad are always more challenging to recover on your own.

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