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  • December 08, 2017

    Essential Elements for Success in International Transactions

    What are the steps lawyers should take to increase the chance of a successful international transaction? James Casey offers his top essential elements for success in executing and managing international contracts.

    James Casey

    My years in law and research management have taught me to appreciate the complexity and challenge of drafting, negotiating, signing, and managing international transactions.

    Jim Casey James Casey, Dayton 1988, is a research and development advisor and attorney based in Washington, D.C. With more than 20 years’ experience with international transactions, he concentrates on transactions, domestic and international partnerships, research compliance, and intellectual property.

    My higher education career in universities that have global relationships and projects with non-U.S. governments, universities, private for-profit companies, and NGOs has provided a richly rewarding professional experience that continues to provide dividends today.

    The area of international transactions lies at the nexus of a dizzying array of disciplines, including but not limited to contract law and international law. In higher education, the area of export controls is an important topic for the future of graduate education and research and development in the U.S. The rewarding experience I have had also presents challenges and issues that must be met head-on, to execute and manage international transactions.

    What are the key issues to keep in mind when executing international transactions? How to rise above the challenges? What may come down the road during contract implementation and management?

    Read on.

    Finalizing and Executing International Transactions: The Challenges

    In the world of higher education contracting, the following areas are often called “troublesome” – they require additional negotiation and language finesse before a contract may be finalized.

    While this list is not exhaustive or inclusive (and hopefully prompts the reader to consider each more fully), these are essential elements when drafting international contracts:

    • A Governing Law or Choice of Law Clause. In an international contract, this clause identifies which state’s laws will be used to interpret the contract – even if the parties live in (or the agreement is signed in) a different state. While the parties could agree to stay silent on this issue at contract formation and execution, I always insist on this clause with specificity.

    • The Choice of Forum or Jurisdiction Clause. This clause provides that any lawsuit between the parties arising from the contract shall be litigated before a specific court or in a specific jurisdiction. Being specific here is the main consideration.

    • An Arbitration Clause and/or a Mediation Clause should be inserted within all international agreements. Alternative Dispute Resolution (ADR) is a vital component of legal practice today.

    • The area of Export Controls is increasingly important in international transactions. The United States maintains an extensive network of regulations and controls on the export and re-export of U.S. origin goods and technology to global destinations. Ensure that international transactions contain an appropriately scoped export controls section.

    • The area of Anti-corruption laws and regulations continues to grow on an international scale. The U.S. Federal Corrupt Practices Act of 1977 (and as amended to this date) remains one of the bedrocks of influence in this area, and sits at the intersection of corporate governance, accounting transparency, and U.S. foreign policy. The fight against bribery and corruption is a global one. Global anti-corruption regimes are discussed within this excellent 2009 German Law Journal article.

    How to Rise Above the Challenges

    How may one rise above these challenges so that the resulting international transaction is acceptable to all parties? Will the transaction encourage long-term collaboration between the parties?

    A positive and humble perspective coupled with effective advocacy for your client’s needs as exemplified by the contract is required. Don’t mistake “humble” for being a pushover – it is really a perspective that encourages mutual negotiation so that all parties can achieve their requirements in the agreement. While there is no one right way to finalize an international transaction, and each negotiation is different, I prefer to agree on the easy contract terms first before proceeding to the more contentious issues. Early wins provide momentum to resolve the more complex disagreements.

    Management of the Contract after Signature

    Signing an international contract is only the beginning and often the easier part.

    When implementing the agreement, always keep the contract in mind. Lawyers should serve in a counseling function while the project is underway – always keeping the contract in the forefront of his/her mind. In research administration, and in the practice of law, it is advisable for lawyers to take a backseat and allow the technical/business experts to talk to, and work with, each other.

    Lawyers should provide a supporting service role and allow the corporate leadership to make the business decisions. This is analogous to higher education, where university general counsel should advise and leave the business decisions to university leadership.

    Effective management of the contract during implementation is akin to project management on the technical/business side. In both areas, the principles of planning, scanning the horizon, and ensuring the contract is followed, are key to project success.

    Creating Success

    What makes for successful international transactions and successful contract implementation? Well, it comes down to an appropriate and judicious mix of interpersonal and legal technical skills.

    Interpersonal skills that focus on building long-term relationships, coupled with a socio-cultural understanding of your negotiating partner(s), go a long way toward successfully completing international transactions and seeing the successful implementation of them.

    As lawyers, we know that our reputations are our calling card, so we should conduct ourselves with the highest level of professionalism and humanity. During contract implementation, there will be challenging times that test even the most professional of attorneys. It is especially during those times when one must maintain their professionalism. Rising above will always pay dividends over the long run.

    International transactions are fascinating, and I wish you much success as you pursue your international passion.

    The author thanks Claudia Ward for her assistance proofing a prior version of this article.

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