Reinier Russell

managing partner

Reinier advises national and international companies
+31 20 301 55 55

International contracting

Publication date 20 December 2018

Usually the law of one of the countries applies in disputes on international contracts. Thus the other party will immediately be lagging behind: it does not know the law and often does not speak the language. In order to prevent this, the UNIDROIT Principles can be applied: a neutral set of rules regels, drawn up for international contracts. In addition, a choice can be made for a neutral arbitration institution or court to deal with a potential dispute.

international contract - social media

International contracting is the order of the day. However, parties will be faced with different legal systems from which a choice has to be made. This could be a problem, particularly if one of the parties is used to the common law system where everything must be covered by a contract, whereas the other party is used to continental law where many things are provided for in legislation. A choice of law will then be to the detriment of the party that is not familiar with the chosen type of contracting. Not being at the same level as the other is not beneficial for the parties’ negotiations and may adversely affect the relationship right from the start. The UNIDROIT Principles of International Commercial Contracts can be an appropriate alternative to prevent this problem.

UNIDROIT Principles

In addition to the equivalence of the contracting parties, the UNIDROIT Principles offer various other benefits:

  • The Principles were drawn up for international contracts, whereas the national legal systems are (primarily) aimed at the national market.
  • Both ‘common law’ and ‘civil law’ lawyers are able to use the principles. The Principles were in fact composed by 150 experts from different judicial systems and countries. They drew up a well-considered, neutral set of rules.
  • The Principles are available in 15 languages, so that most people can read the rules in their own language. This reduces the risk that words and terms will be interpreted in a different way than expected.

International arbitration

In addition to declaring the Principles applicable, it is advisable to include an arbitration clause in the contract. This clause stipulates that, in the event that the parties have a disagreement, an arbitrator will assess the issue. Besides, it is prudent to also include a choice-of-court clause, where a choice will be made for an international arbitrator or a court specializing in international commercial matters. Soon, the Netherlands Commercial Court will be available for this.

What can we do for you?

With its extensive knowledge and experience in international business, Russell Advocaten can advise you on how to put down in writing arrangements that were made. Through our Primerus network, we can also make an appeal to one of the most important specialists regarding the UNIDROIT Principles of International Commercial Contracts, Prof. Dr. Eckart Brödermann, LL.M., who has recently published an article-by-article commentary on these Principles. Please contact us:

    We process the personal data above with your permission. You can withdraw your permission at any time. For more information please see our Privacy Statement.

    Related publications

    6 tips on using standard terms in international contracts

    What do you have to consider when using general terms & conditions in international contracts?

    Read more

    What does the Homologation Act (WHOA) mean for creditors?

    The WHOA makes it easier for a company facing bankruptcy to avoid bankruptcy. This can be done through a binding agreement with all creditors, even if they do not all agree to the arrangement. What rights do creditors have in WHOA proceedings?

    Read more

    New EU General Product Safety Regulation

    On 12 June 2023, the new EU General Product Safety Regulation entered into force. As of 13 December 2024, products must comply with this regulation. What are the consequences of the new Product Safety Regulation? Which entrepreneurs should start taking measures now?

    Read more

    Fraud prevention in the company

    Fraud causes billions in damages each year. Companies face, for example, fraudulent contracting parties, directors and employees. The management and supervisory board might play the most important role in a company when it comes to fraud prevention. In this newsletter we will give them some legal tools to prevent fraud.

    Read more

    Protecting your company’s assets and interests. The importance of getting it right from the start

    Company directors and company owners are more than ever reliant on assets such as a company’s brand name, patented inventions, trade secrets, customer data base and skillful employees. Yet, all too often, when faced with a potential infringement or misappropriation, companies find themselves woefully underprepared in terms of risk management. This may prove highly detrimental to the company’s best interests.

    Read more

    Doing business in Europe: Changes in European Union legislation and their impact on EU member state law

    During the summer months of 2022, the necessary relevant changes at the European level for, in particular, suppliers and distributors, founders of legal entities and employers came into force. It is therefore time for these distributors and employers to update their distribution and labor agreements, while it becomes easier for foreign founders of companies to establish themselves in the Netherlands for the first time or expand their presence here.

    Read more