International Commercial Contracts: Tips to Avoid Common Pitfalls

Abstract

All cross-border commercial transactions can be risky. Each party to an international commercial contract wants to minimize its risk exposures to the lowest extent possible and maximize the benefits. Allocating and controlling risk is crucial for getting the best deals possible. This article outlines the common pitfalls in cross-border commercial contracts that people generally do not recognize them until the dispute actually arises, but when it arises it is very cumbersome and time-consuming and even more lamentable when you realize that you could have avoided them, if necessary precautions were taken at the outset. This paper aims to provide a general guidance about commercial contractual risk issues that can help you mitigate such risk by drafting and incorporating appropriate contract clauses.

Keywords: Commercial Contracts, Risk Allocation Provisions, Governing Law and Choice of Forum Clauses, Representation and Warranties, Indemnities, Confidentiality Clause, Force Majeure, Entire Agreement Clause

JEL Classification: K12, K33