When you do business with a foreign business partner, make sure you document what you have agreed upon. This can take the form of a contract, your general conditions, and delivery conditions. Always ensure that product requirements and product liability have been taken care of. Don’t forget to protect your trademark or copyright, to avoid abuse. And, if you are doing business in or with an EU country, make sure you comply with the General Data Protection Regulation (GDPR).
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Record your agreements in a legally binding contract
You are under no legal obligation to draw up a contract, but doing so may prove useful for you. A contract records the agreements you and your business partner enter upon in a legally binding form. For instance, who will be liable for product transport. It makes clear the rights and duties of both parties. A sound contract gives you certainty, and helps to prevent conflicts. It reduces your entrepreneurial risk. Natural as well as legal persons can enter into a contract. A judge may declare a contract null and void if one of the parties is a minor, or is in ward. So, be careful with whom you enter into a contract. Read more about contracts and agreements.
During negotiations, you may be asked to sign a declaration of intent. This documents the intentions of the negotiations. Often, such a declaration is binding and you cannot walk away without financial consequences. So, carefully read the declaration of intent, before you take on an obligation without meaning to.
Contents of an international contract
In the contract you describe the product or service, the price and its acceptance by the customer. A contract also states under which jurisdiction or set of laws it resorts, and which judge has the authority to act in case of disputes. Considerable differences exist from country to country. It is advisable to appoint a lawyer for drawing up the precise content of the contract.
The International Chamber of Commerce (ICC) sells several international model contracts in English. The most common contracts are:
Include international delivery termsClearly set out the delivery terms in your contract. You do this using the ICC Incoterms®2020. If you have been using the ICC Incoterms®2010, you can continue to do so. They remain valid. When using the international delivery conditions ICC Incoterms® 2020 you know:
- who is responsible for arranging transport
- who is responsible for the costs associated with transport
- who bears the risk of damage to or loss of the goods during carriage
Draw up general conditions
General conditions are delivery terms, payment and warranty conditions that apply to every quotation or order. If you want to start exporting, make sure your general conditions apply to the sale of your product or service in the destination country. Include your general conditions in your quotation and refer to them in the contract. And don’t forget to have your general conditions translated into the language of the destination country.
Protect your trademark or copyright
If you import private-label products, that are made specifically for your company, you can release them on the market under your own brand name. Register your trademark or brand name to prevent others from abusing it. If you export goods, you should consider applying for international copyright protection.
Do you want to import registered trademark products from countries outside the European Economic Area (EEA)? You have to have permission from the trademark owner. If you cannot prove that you have permission, you are breaking the law by conducting parallel import.
Protect your intellectual property
If you launch a new or unique product, you don’t want others to copy it. As a precautionary measure, you can register your trademark. If the invention is your own, you can apply for a patent for your product. The Netherlands Patent Office (NPO) offers valuable information on how to protect your invention in your export country.
Check the product requirements and liability
If the product you market is faulty, you are liable for the damage it causes. Be sure to check the product requirements in your import or export country, even if you have the correct quality certificates. If you are the liable party, you may have to face financial claims. Check with your insurer how to keep your risk within acceptable limits.
Comply with the GDPR
If you do business in or with an EU country, supplier or customer, you have to comply with the General Data Protection Regulation. The step-by-step guide will tell you what to do.