After reviewing thousands of cross-border contracts, I’ve learned one thing: in borderless business, it’s not the smartest party that wins. It’s the one whose contract performs under pressure.
Whether you’re exporting AI, licensing IP, or manufacturing overseas, the moment things go wrong—and they will—you’ll wish you’d done one thing:
Made your contract enforceable, not just elegant.
Let’s break down what that actually looks like.
1. Don’t pick a law; pick your legal universe
Most companies choose the governing law and jurisdiction too late, and for the wrong reasons (“we used it last time”). But this early decision shapes everything: how the contract reads, who interprets it, and what happens when something breaks.
- Common law gives you control. It requires detail: every obligation, carved in ink.
- Civil law gives you coverage. It fills in the blanks with code, but often in ways you don’t expect.
- Arbitration gives you power. With the New York Convention, your win is enforceable in 160+ countries. Court judgments? Not so much.
Your move: Align your law, forum, and enforcement strategy before you negotiate price.
2. Sanctions, data, corruption: the rules you don’t control
Even the tightest contracts can be derailed by external laws. One client had to cancel a multimillion-dollar supply deal overnight because their counterparty was suddenly sanctioned.
Here’s what catches people off guard:
- A data transfer clause that ignores GDPR or China’s PIPL
- A royalty agreement that triggers unexpected withholding taxes
- A termination clause that doesn’t cover a pandemic or trade embargo
Your move: Treat regulation like gravity. You don’t negotiate with it; you build around it.
3. Who owns the IP when it’s made across three time zones?
In one deal, the buyer thought they owned the software. The developer disagreed. The result: a US$5 million write-off and a cancelled launch.
Why? The contract forgot to explicitly assign IP across borders.
Your move: Use annexes to define:
- Who owns what (before, during, and after)
- How it can be used (territory, duration, exclusivity)
- What happens if the relationship ends
Don’t assume logic will prevail. In law, what’s not written might as well not exist.
4. Get paid without begging
Cross-border payment delays aren’t just frustrating. They’re fatal. Your contract should think like a CFO.
- Define the currency, payment method, and penalties
- Use tools like Letters of Credit to de-risk payment
- Include clauses to handle currency shifts and volatile FX markets
Your move: Treat your contract like a financial dashboard, not just a legal document.
5. Your logistics clause isn’t boring. It’s life or death.
One client’s goods were held at customs for 21 days because the Incoterm was ambiguous. It cost them more than the shipment itself.
🛠 Your move: Use Incoterms® 2020, name the place, version, and responsibilities clearly. If it’s “FOB Shanghai, Incoterms® 2020”, say so.
Add:
- Technical specs (in an annex)
- Inspection and acceptance terms
- Warranty period and what triggers it
6. Culture is the clause you can’t write
In some countries, a signed contract is the deal. In others, it’s just a placeholder for a relationship.
One partner insisted on sticking to “the letter” of the contract. The other saw it as rigid and disrespectful. What followed wasn’t a dispute. It was a quiet exit.
Your move: Learn the cultural map before you draft. Sometimes a smile does more than a signature.
7. You’re not drafting. You’re designing for resilience.
Your contract should manage:
- Enforcement risk (arbitration wins over litigation)
- Regulatory risk (sanctions, data, corruption)
- Commercial risk (pricing, currency, tax)
- Operational risk (delivery, inspection, KPIs)
- Relationship risk (exit routes, human friction)
Your move: Use your contract as a dynamic risk register. Make it perform, not just exist.
Final thought
Your contract is not a filing exercise. It’s not just a legal requirement. It’s a performance asset.
It exists so your team can move faster, your partnerships can scale safer, and your outcomes aren’t held hostage to ambiguity.
And if you ever want to pressure test your cross-border deal—or design one that works across time zones, tax codes, and tension—we do this every day. Contact us below.
