Cross border transaction benefits and risks
Developing business overseas ensures good quality of supply at a lower price. You may also take advantage of a more extensive network than a domestic market by offering goods and services on an international scale.
In recent years, due to a more supportive economic atmosphere, many small and medium-sized firms have started to conduct their business activities across the borders.
However, risks remain in this type of business, especially when the commercial agreement lacks precision. For example, an agreement letting the parties negotiate in "good faith" in case of troubles allows too much discretion in its interpretation, which presents a risk in case of conflict. Legal consultation with an experienced professional may prevent such a risk by reformulating the contract and specifying the terms. Similarly, when a situation not provided in the contract has occurred, there is a considerable risk of being forced to accept a payment resulting from such a situation. Moreover, a firm may have to defend itself in a court outside of its home country, depending on how the jurisdiction over a dispute is framed in the agreement.
Consequently, you will need to protect yourself by drafting a contract stipulating precise terms to cover possible situations.
Development of Domestic Commercial Contracts
In a domestic trade, many cases have been resolved in consultations even if the situation was not specified in the contract. This was due to a tendency to focus on trust and thus to simplify the content of contracts.
However, in recent years, the need for the prevention of legal risks is equally amplified in a domestic trade. This is also evident in the increasing number of confidentiality agreements that maintain privileged relationships between the partners.
Importance of a contract in a domestic trade
Previously, a domestic contract was concluded on the assumption that no problems would occur.
However, a problem may arise and it needs to be quickly solved in order to maintain a good relationship with a partner. To do so, it is important to stipulate how to resolve such a problem when a contract is concluded.
As trust is paramount, it is important to stipulate in advance possible problems and how to solve them.
Contract Drafting and Reviewing by an attorney
With deep knowledge gained through a daily practice of an international trade and, in particular, by an analysis of risks concerning international agreements, Mr. Suda will be able to provide for you possible solutions by drafting or reviewing your contract.
If you wish to seek consultation by Mr. Suda, please do not hesitate to contact us at 03-5981-5533.