If signing a contract with a contractee outside of the U.S., should you tell the contractee to write it using the standards of the U.S.? I am wondering if all contracts, especially business contracts, have the same formats and standard wording or they have different standards and formats and you need to hire a lawyer from the country where the third party resides because the formats and standards can only be understood in the context of their own laws, which is different from that of the U.S..
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1I have seen small cultural/legal differences like initially every page and terms in both English and Dutch in Belgium. I assume there are stamps involved in China. Are you thinking of specific practices?– George WhiteCommented Sep 16, 2021 at 23:10
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Don't think specifically in terms of the US. When writing a contract with contract parties in country A and B, should it use the standards of country A? Now substitute B with the US.– MSaltersCommented Sep 17, 2021 at 6:58
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2why should they write it to your standards instead of you writing it to their standards? Now they may need to hire a lawyer from the country where you reside because the formats and standards can only be understood in the context of your laws, which are different from that of their country.– user20574Commented Sep 17, 2021 at 8:21
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It would help to know the context of the contract and which side you sit on. For example, if you are a contractor accepting work for a foreign company then your likely going to be accepting standards/laws that are standard in their country. If its for a sale of goods then you'd need to factor in and laws/trade agreements that the 2 countries have and effect on the contents of a contract etc.– Matt BartlettCommented Oct 4, 2021 at 10:50
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3 Answers
should you tell the third party to sign it using the standards of the U.S.?
In most cases signing a contract is not subject to country-specific standards. All that matters is that it can be ascertained from the contract who the parties are as well as and their willful, informed formation of that contract.
It is more typical for a contract to specify that it is governed by the laws of country X and/or jurisdiction Y. That places on the counterparty(-ies) the burden of ensuring that they know the legal framework that underlies the contract at issue.
Lastly, note that a party entering a contract is "by definition" not a third party. At most, a third party might sign a contract in a witness capacity, not than in the capacity that implicates rights and duties pursuant to that contract.
There are no "standards of the U.S.?" with respect to contract forms
First, 99.99% of contracts are not in writing - see What is a contract and what is required for them to be valid?
Second, what you and the other party choose to put in your contract and how you choose to express it are entirely matters for you to decide. A contract document is evidence of the non-tangible contract. If you want to do it as a comic strip, that's perfectly fine.
That said, there are a number of standard contract terms that get used in certain industries and jurisdictions because all industry participants need to deal with the same laws, regulations and issues. Common problems lead to common solutions.
Courts are interested in the substance of a contract, not its form.
Cross-jurisdictional issues
Contract law in the US is primarily state law. So the issues that apply to cross-national contracts also apply to cross-state contracts.
Such issues include:
- which jurisdiction's law applies to the contract?
- are there laws in either or both of the jurisdiction that will apply notwithstanding? That is, some laws cannot be contracted out of.
- if there is a dispute, which jurisdiction's courts are the most appropriate?
- who takes the risk on import/export issues?
- who takes the risk on currency fluctuations? That is, is the contract denominated in USD or AUD our GBP etc. or a mixture of currancies.
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Some contracts are required to be memorialized in writing to be valid. In the U.S. copyright assignments and in most states, real estate sales. Commented Sep 17, 2021 at 1:00
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@GeorgeWhite sure - did you read the answer to the linked question? The fact that a small minority of contracts (albeit usually high-value ones) need to be in writing doesn't mean that you need a written contract to buy a coffee, ride a bus post or a letter.– Dale M ♦Commented Sep 17, 2021 at 1:06
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@DaleM You might need a formal contract to e.g. buy a million dollars of computer code from Generic Indian Outsourcing Corporation. Outsourcing and international supply chains in general are probably an area where a significant number (possibly the majority) of international contracts are made. Commented Sep 17, 2021 at 10:09
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@nick012000 it might be a good idea to have a formal contract for that but you don’t need one. Billion dollar contracts have been done on a handshake.– Dale M ♦Commented Sep 17, 2021 at 11:10
Quite likely, but not always and this isn't really about any specific jurisdiction, US or where.
Different jurisdictions interpret "obvious" questions in different ways, and place different emphasis on any number of arguments.
Some of the most obvious differences are in marital law… the very idea of pre-nuptial agreements was unheard of outside the US until how many years ago? With or without a pre-nup, does anyone not agree that given the chance, one or the other partner might prefer to have the case heard in this or that jurisdiction?
The most obvious current example of jurisdictional difference is prolly the case alleged against Prince Andrew by Virginia Roberts.
Thus far, the main points appear to be the age of consent and the recognised methods of serving legal documents… both of which seem to be different in UK and US jurisdictions in general - and even within the US, might well differ among individual states.