International contracts are legal agreements made between two or more parties residing in different jurisdictions. They typically involve trade of goods, services or financial products across borders.

When entering into international contracts with an individual or a company from a different country, you should always check that the individual or company’s country of domicile and jurisdiction is authorized to be part of an international contract.

When drafting any contract, there are some key aspects to take into considerations to better protect yourself:

• Governing Law: This is important not only because it will determine how the contract will be interpreted but could also determine which terms are part of the contract. In case parties can’t agree on a governing law, they can always choose a  neutral jurisdiction. However, even when an international sales contract designates the law of a specific state or country to govern it, a court may interpret that provision to require application of the United Nations Convention on Contracts for the International Sale of Goods (CISG) rather than the law of that jurisdiction. This is because the United States and nearly 100 other countries have adopted and ratified the CISG as taking precedence over local law. Pursuant to the CISG, so long as the parties to an international sale of goods contract are located in different countries and both countries have signed the CISG, the CISG is to be applied as the governing law of the contract unless the contract expressly excludes it.
• Dispute Resolution: The choice of jurisdiction and dispute resolution clause in an international contract is significant. When it comes to international contracts, it is easier for parties to agree on an arbitration clause than on a jurisdiction clause with a choice of forum. With international contracts, arbitration is also a more efficacious option because the U.S. and 168 other countries are signatories to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention). These conventions encourage recognition and enforcement of international arbitration awards and agreements; each signatory pledges to recognize foreign awards in its domestic courts. Underscoring this point, the U.S. Supreme Court has held that the general policy favoring arbitration “applies with special force in the field of international commerce.”
• Scope of Damages and Limitation of Liability: By ensuring that all parties comply with domestic and international laws through a thorough verification of potential partners, conduction of background checks and by including clauses addressing fraud prevention.

The main goal of having legal counsel is not only to minimize risks and liability, but also to avoid actions that could be construed as fraudulent. Among the potential charges that have extraterritorial reach, we can find both mail and wire fraud, which can be reflected in several acts such as intellectual property theft, money laundering, etc.

To understand the scope of these claims, the FBI shared on its website what we call BEC(cyber-enabled financial fraud), a scam that targets businesses through its employees with access to company finances. The conspirators use a variety of methods like cyber engineering and computer intrusions. The victims are tricked into making wire transfers to bank accounts thinking they belong to trusted partners. These criminal organizations often target real estate purchasers, the elderly, businesses, etc.