International business contracts

COMMON
MISTAKES IN
A REAL IBC

PRESENTED BY GROUP 1
 01
IBC DEFINITION
Refers to a legally binding agreement between
parties, based in different countries.
Parties are obligated to do or not do certain
things.
COMMON MISTAKES IN IBC
Using the wrong Incoterms
Wrong or inaccurate
specification of basic conditions
of trade
Using inappropriate online
template
The procedure of dispute
resolution is not prescribed
Not selecting a prior language
version

02
Inconsistent Usage of
Terminology
 USING THE
COMMON MISTAKES IN IBC

WRONG
INCOTERMS
Do not solely rely on others
for what Incoterm to use.
Could pay more and open to
more unnecessary risk.
 WRONG OR
INACCURATE
COMMON MISTAKES IN IBC

SPECIFICATION OF
BASIC CONDITIONS
OF TRADE
Failure to specify a full address
may cause dispute.
“Warranty obligations” are not
taken in account.
Parties do not agree on the
division of custom treatment
responsibilities.
 USING
COMMON MISTAKES IN IBC

INAPPROPRIATE
ONLINE TEMPLATE
Online templates are not
drafted according to client’s
situation and needs or miss
out some clauses.
 THE PROCEDURE
COMMON MISTAKES IN IBC

OF DISPUTE
RESOLUTION IS
NOT PRESCRIBED
In practice, many contracts
do not contain the procedure
of dispute resolution or
include invalid prorogation or
arbitration clauses.
 NOT SELECTING A
COMMON MISTAKES IN IBC

PRIOR LANGUAGE
VERSION
Contracts must have a
prevailing/prior clause that
specifies that if a dispute
about interpreting the
contract ever arises from the
fact that it exists in multiple
languages.
 CASE STUDY
COMMON MISTAKES IN IBC

Between American company

and Turkish company
 INCONSISTENT
USAGE OF
COMMON MISTAKES IN IBC

TERMINOLOGY
Defining terms but using
similar terms inconsistently,
such as defining “this
Agreement” and then
referring to “this contract” or
“the agreement created
hereby.”
Using terms such as “will,”
“shall,” and “must”
inconsistently.
 HOW TO AVOID
MAKING MISTAKES
IN IBC

03
 HOW TO AVOID MAKING MISTAKES IN IBC
THINK MULTIPLE
STEPS AHEAD

Don’t be so focused on closing

the deal in negotiations and
overlook the long-term
challenges of implementation.
 HOW TO AVOID MAKING MISTAKES IN IBC
THINK MULTIPLE
STEPS AHEAD

Don’t be so focused on closing

the deal in negotiations and
overlook the long-term
challenges of implementation.
 HOW TO AVOID MAKING MISTAKES IN IBC
TAKE ALL TIME
YOU NEED
When negotiating a critical
business contract, we are likely
to be in a highly charged
emotional state that can lead to
irrational thinking. The key to
avoid making mistakes in the
contract is to control our time
effectively
 HOW TO AVOID MAKING MISTAKES IN IBC
MONITOR THE
DEAL-DRAFTING
PROCESS
After engaging in complex
dealmaking, negotiators often
pass off the technicalities of
their business contract to their
attorneys and errors usually
happen in this step.
Keep track the deal-drafting
process and read the contracts
through carefully
LET'S PLAY
A GAME!
THANKS FOR LISTENING