Internal And International Contract

Definition Of Internal And International Contract

A contract is an agreement between two or more individuals which includes a legal benefit

When all elements of a contract is related to one country, this known as an internal contract

When the parties have different nationalities or the subject of contract or the place of the performance is abroad, this is an international contract. In other words, the act of putting the property on the market and spreading of the investment from one country to the other one would happen international contract. International contracts are under the internal law unless parties agreed on other laws in particular situations.

In internal contracts, the legal expert by using her/his knowledge about rules, judicial process, and also his/her experience can recognize the legal matter and present practical solutions solving the issues.

Sale contract, labour contract, lease contract, partnership contract, indemnification Agreement, rescission contract are samples of internal contracts.

In the International contract, presence of a legal consultant is needed in all phases in order to prevent the parties facing problems in the future because the legal expert knows the different countries’ laws so she/he can anticipate problems which may be caused in performance of a contract and could solve them easily.

Primary Negotiation

The primary discussion which parties hold in order to content each other to conclude a contract called primary negotiation.

Gaining benefit is the main goal of any commercial contracts. However sometimes, the loss which will make is more than the probable benefit that is because of the domination of one party or situations which have not been considered. Therefore an experienced consultant can predict probable profit, loss and all the risks in the contract so that the party can make his decision considering the necessary information.

Breaching the rules of negotiations or breaking off negotiations, without good faith by one party, sometimes causes damages for the other party. This kind of negotiations sometimes have the

legal affects. If each one of the parties discloses the confidential information of the other party which is gained during the negotiations, the party who reveals the confidential information is responsible for compensation even though the negotiation will not be concluded to the contract.

Preparing the Draft

When parties reach to a general agreement in order to sign a contract, then they should prepare a draft. The importance of drafting is because of determination of parties’ rights in the final contract.

An experienced consultant plays a great role in this part; because after oral negotiations, were oral but in this phase parties make their agreement in written form and after that they shall fulfil the obligations. Draft of a contract almost is the last chance of parties to reflect more rights because when the main text is written they are not allowed to make essential changes.

In this phase, parties may consult with an expert for considering the benefits and the losses of the contract or they may consult for preparing a draft. In this case, the legal consultant prepares the draft in regard to all circumstance and provides it to the client. The experienced consultant can write a draft gaining the client more benefits which increase the power of client for bargaining and/or performing the contract this is the most excellence of having a consultant in this phases.

Hiring a consultant accompanies by being completely informed of all laws and legal solutions during entering into the contracts.

To prepare the first draft of a contract

1-The party who knows details in the contract would have high hand.

2-Important items should be mentioned in draft.

3-Parties should read final text carefully to check the wording whether they are the ones which agreed on.

4-Parties can make general amendments in draft but they can’t make essential changes in the text of final contract. Although parties are not under an obligation as long as they have not signed the contract.

5-There is no need to sign the draft but if parties want to do so, they should mention in the minutes that they are signing a final draft, and if the negotiations do not lead to the final contract, this agreement will be ineffective.

Amendment of a contract

After signing a contract, the parties are bound to act under the terms and conditions of that contract; however sometimes parties decide to change some details, eliminate or add a new obligation to the contract. In this case, parties can meet an experienced consultant who evaluates probable profit and loss of the contract for parties so that no one will lose his rights.

Contract performance supervision

After signing a contract, it’s time to enforce the agreement which is time consuming and needs supervision. Supervising contract enforcement is important to assure the quality and decreasing the risks and expenses and saving time. Consultant is a supervisor in this phase that should dominate over contents of the contract and follow the progress of it that is based on activities, time schedule and aim of project and report it to the client in case. If the project has a time schedule, supervisor should oversees the progress according to schedule and report increase or decrease the time. If the progress is not match with schedule, consultant should suggest solutions. Consultant prepare an amendments and hold meeting between parties if it is necessary.