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International Trade and Jurisdiction

Trading overseas introduces a whole list of issues which do not necessarily need consideration when trading domestically. For example, the country you are considering trading in is likely to have different laws, different trading customs, different currency etc. Whilst the world is much smaller place these days and trading overseas provides real opportunities, it should not be undertaken without due consideration.

Law & Jurisdiction

When businesses trade internationally, it is prudent that they consider:

  1. Which country’s law will apply to their contractual arrangement; and

  2. The courts that will hear the case if the parties end up in dispute (ie the jurisdiction).

If both countries are in the European Union things are more straightforward than if they are not. Either way, it is important that the relevant law and jurisdiction is agreed beforehand.

Suggestions when considering trading outside the UK

  1. Gather information about the laws of the country with whom you wish to do business.

  2. Check whether there are any international controls which might restrict the export/import of your goods.

  3. If contracting with a particular customer, distributor, agent etc, undertake appropriate checks. For example, is it appropriate to give credit or should you insist on payment in advance, on letter of credit etc? Credit terms and debtor days can vary significantly from country to country.

  4. Ensure that your contracts contain express provisions identifying choice of law, jurisdiction and method of resolving disputes.

  5. Consider whether a judgement can be enforced? There is little point obtaining judgement from a court if it cannot be enforced in the relevant country.

  6. Think about foreign currency payments and ways to mitigate fluctuations in exchange rates.

  7. Seek support from organisations such as UK Trade and Investment.

This should not be relied upon for legal advice. If you would like any further information or advice please email richard@clariclegal.co.uk.

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