International Contracts

Culture and Contracts for International Lawyers

Lawyers working in international law oftentimes interpret, review, and advise their clients on contracts written by other international lawyers in foreign countries. Considering the great possibility for legal, linguistic, and cultural misinterpretations, it is important for international lawyers to become familiar with the types of contractual clauses that they see in such diverse contexts.
In understanding the commonly used clauses in contracts drafted by lawyers in other countries, international lawyers will be better prepared to explain to their clients the consequences and implications of contract language written according to the laws and customs of other countries. International lawyers may do work with clients and their legal representatives across the world. However, the purpose of this article is to help guide those lawyers practicing outside of the U.S. toward understanding the common clauses used in contracts written by U.S. lawyers.

Common situation

The international-contract scenario is easy to identify. It begins with a party in Mexico, for example, who contracts with another party in Germany. Or it starts with a Spanish company wishing to employ a French agent to work in Spain. While the parties negotiate the contract terms, one party's lawyer may, in the end, write most of the contract due to the difference in the bargaining positions of the parties. The party whose lawyer drafts most of the contract has the advantage of including certain clauses with legal concepts that may be unknown to lawyers not practicing in that country. To avoid this situation of allowing unfavorable contract terms into a business deal, international lawyers should become familiar with - to the extent time and circumstances permit - the country's laws and customs where the other contracting party resides.
An understanding of the typical contractual clauses used in the U.S. legal system is beneficial to those international lawyers whose clients contract with parties represented by U.S. lawyers. Because the U.S. legal system is based on the common law (judge-made law), typical contractual clauses encompass legal concepts of well-developed case law of which international lawyers may not be aware. The following paragraph and examples provide the basic background about the standard terms and conditions clauses normally included in many contracts drafted by U.S. lawyers.

Standard terms and conditions

A contract contains the standard contractual clauses and performance deliverables to which both parties agree. While the performance deliverables section of a contract provides the parties with general ideas of expectations, the standard terms and conditions section of a contract is just as important. Signing the contract binds a party to the common contractual clauses as much as it does to the performance deliverables clauses. In summary, the standard terms and conditions section may contain just as many or more calls to action as the performance expectations. Therefore, while a French agent contracted to do work in Spain may be more aware of his or her duties to carry out performance, the standard terms and conditions that also bind the agent are critical to the agent's understanding of how to perform. This is because standard terms and conditions clauses in U.S. contracts generally lay the legal framework for how to interpret the contract, which law applies, dispute resolution options, etc.
The clauses contained in the standard terms and conditions section consist primarily of those clauses the parties include to protect themselves in case of breach of contract or potential litigation over contract terms or circumstances. A breach of contract may result, for example, from a breakdown in the parties' relationship or a misunderstanding about performance or enforceable promises. To assist international lawyers with identifying and understanding common contract clauses to prevent a breach of contract for their clients, listed below are some of the typical contract clauses normally contained in a standard terms and conditions section of contracts. This list is not exhaustive, but it does contain some of the more commonly included contract clauses in the U.S. legal system.
Commonly called: Merger/entire agreement/complete agreement clause
Effect: This clause indicates to the reader that the parties have no agreement other than the agreement containing the merger clause. A merger clause pronounces an agreement's completeness and restricts other prior agreements from consideration when determining the contract's terms. The function of the merger clause is to keep out any "side conversations" when determining the parties' intent captured in the contract at issue. The effect of this clause is that one agreement only governs the parties' relationship.
Example: "This agreement represents the parties' entire agreement."
Commonly called: Modification clause
Effect: This clause generally requests that two contracting parties memorialize their modification in a writing that both sign. Important to the modification clause and its effect is the general rule that contract modifications typically require new consideration. Consideration is a common-law concept that refers to a bargained-for exchange. However, some types of contracts may not require new consideration for modification, so it is important to check (1) the type of contract and (2) the laws in the jurisdiction governing the contract. While the consideration issue may be more complex, a modification clause simply requests that amendments to the contract be in a signed writing. This writing requirement of the clause encourages the parties to negotiate any modifications before reducing their changes to writing and obtain a similar and clear understanding of what will be modified before any change occurs. However, oral modifications - despite what a contract says - may be effective depending on the U.S. jurisdiction.
Example: "The parties may modify the contract only by an agreement in writing signed by both parties."
Commonly called: Employee or independent contractor clause
Effect: In a contract for services, this clause identifies whether one of the parties will be considered an employee or independent contractor. The greatest difference is that employers are responsible for certain financial and liability matters for employees, where those who hire independent contractors are not responsible for the same matters. In summary, an employee means more employer control but also more employer liability.
Example: "Mr. X will act only as an independent contractor for the ABC corporation. Mr. X is NOT considered an employee of the ABC corporation for the purpose of this contract for services."
Commonly called:Confidentiality clause
Effect: A confidentiality clause or agreement defines what confidential information is, who must keep it private, and what the consequences of disclosure are. Confidentiality clauses may have exceptions relating to publicly known information or where the other contracting party consents to the disclosure of otherwise confidential information.
Example: "Mr. X, independent contractor, will not disclose confidential information obtained through Mr. X's scope of services for ABC corporation."
Commonly called: Conflict of interest clause
Effect: A conflict of interest clause restricts a contracting party from engaging in relationships, transactions, or circumstances external to the contract at issue. The purpose of the clause is to prevent a conflict of interest from arising between the contracting parties. A conflict of interest issue may arise due to a party's personal situation or position.
Example: "Contractor has disclosed any interest that presents or may present a conflict of interest. Contractor will disclose any actual, apparent, or potential conflict of interest that arises throughout the term of the parties' contractual relationship."
Commonly called: Choice of law clause
Effect: A choice of law clause identifies where the contracting parties prefer to litigate issues arising from the contract. Usually, the party who drafts the contract chooses the applicable law. Other jurisdictional issues may become relevant in the future if litigation arises.
Example: "The laws of the State of Delaware will govern this contract."
Commonly called: Dispute resolution clause (commonly involving arbitration and waiver of jury trial)
Effect: These clauses tell the reader whether either party has waived some type of dispute resolution option. A contracting party may want the other party to opt out of certain dispute resolution options in light of likely costs and inconveniences.
Example: "ABC corporation agrees to resolve all matters arising from this contract through arbitration."
Commonly called: Severance clause
Effect: This clause refers to the situation where a court determines that part of the contract is illegal or unenforceable. The clause states that in this case, the validity of the remaining portions of the contract is unaffected.
Example: "If any of the provisions of this agreement contravene or are invalid under state or federal laws, this finding will not invalidate the whole agreement."
Commonly called: Indemnification clause
Effect: This clause states that one contracting party will indemnify (reimburse) the other for failure to meet a contractual obligation or other illegal or damage-causing action.
Example: "ABC corporation shall indemnify, defend, and hold DEF corporation harmless from any and all liabilities, damages, penalties, claims and expenses (including defense and settlement costs) resulting from any breach of this agreement."
Conclusion
This article clarifies some of the most common clauses found in the standard terms and conditions section of a contract drafted by a U.S. lawyer. While the explanations and examples of the clauses are generally consistent across a wide variety of U.S. contracts, these clauses vary depending on the U.S. jurisdiction in which the drafting lawyer is licensed or the interests of the party drafting the clause. As a result, international lawyers should carefully read and assess the standard terms and conditions of the contracts that guide their clients' contractual obligations. Even if U.S. law does not govern the contract at issue, understanding and recognizing common U.S. contract clauses will allow international lawyers to better help clients to perform on contracts in a way that does not offend U.S. cultural notions of compliance and fairness.
In understanding contractual clauses common to any particular legal system, both international lawyers and clients will be more prepared to fulfill contractual obligations and maintain healthy international business interests and relations.
Melanie Glover & Marina Bugallal

Marina Bugallal
Partner of Mariscal & Asociados Abogados, Ms. Bugallal graduated in Law at the University San Pablo CEU, with a specialisation in EC Law.
After collaborating with the London-based Sinclair Roche & Temperley firm in 1995, she joined Mariscal's team in 1996.
Ms. Bugallal is a specialist in handling international projects. She has a large experience in insolvency and bankruptcy proceedings, including assistance in Spain related to foreign bankruptcy proceedings, as well as representation of foreign creditors before Spanish companies in insolvency and bankruptcy proceedings. In 2005, she participated in the Aliter Master by teaching the course on the legal aspects of investments in China. Her legal articles are published on a regular basis in several financial and specialised journals.
She is also the President of Eurojuris España, a Spanish network integrated into Eurojuris International (the first network of European law firms).
E-mail: mbugallal@mariscal-abogados.com
http://spanishlawyers.mariscal-abogados.com/

Bankruptcy: What and Why

It is a word that everyone has heard and shudders to consider. But what actually happens and what it actually is are largely undefined in the public mind. To relieve some of that anxiety, here is an overview of the types of bankruptcy and how they can potentially help your situation.
Bankruptcy exists as two types: the first requires individuals to sell their assets in order to pay the debt and the second requires individuals to make payments, without the sale of assets, over the course of a specified period of time to pay off the debt.
The first type of bankruptcy is known as a Chapter 7 bankruptcy. Filed either by individuals or businesses there are four criteria that must be met in order to file. The first criterion is that income must be at or below the median monthly income for your particular area. If your income is above the median, the second criterion is that you must calculate whether you have sufficient disposable income to repay unsecured debts over a five year period by subtracting the allowed expenses and required payments from your monthly income. The third criterion is that if you have filed for Chapter 7 bankruptcy in the last eight years or Chapter 13 bankruptcy in the last six years you cannot file for bankruptcy again.And the fourth criterion is that if a previous bankruptcy case, either Chapter 7 or Chapter 13, was dismissed within the last 180 days because you violated a court order, your filing was fraudulent, or you requested the dismissal, you cannot file for Chapter 7 bankruptcy.
The second type of bankruptcy is referred to as Chapter 13 bankruptcy. In order to file for Chapter 13, you must have a reliable source of income. This is required because in order to file you must submit a repayment plan that will have all of your debts paid off within three to five years. The amount to be repaid during that time is determined based on income and the amount of debt. However, there are limits to how much debt you can have. In order to file Chapter 13 you may not exceed $1,010,650 in secured debt and $336,900 in unsecured debt. For secured debts, where a possession is the direct object of the debt such as a car as the object of a car loan, Chapter 13 allows you to make up missed payments by incorporating them into your repayment plan.
The question of whether or not to file for bankruptcy boils down to whether or not the type of debt you have will be benefited by doing so. If you have credit card or similar unsecured debt, meaning the creditor does not have your property as collateral, then bankruptcy will most likely be very helpful in eliminating it, or at least getting rid of the majority of it. In fact, that is what it was designed to do. If you have debts like these, bankruptcy usually allows you to clear those debts in order to focus on the debts that it will not erase.
The types of debts that bankruptcy will not erase are tax debts, student loans, any court ordered payments like alimony or child support, and any secured debts where the creditor does have the right to repossess your property for failure to pay. After you file bankruptcy, all of these debts will remain. The court ordered payments must be factored into your repayment plan under Chapter 13. Student loans and tax debt are possible to be discharged, but only under extremely rare circumstances and only if you fulfill extremely difficult to prove criteria.

No two bankruptcy cases are the same. With that in mind you should always consult a licensed attorney before making any decisions regarding filing for bankruptcy, but this information will give you a place to start when determining whether or not you should consider the possibility that bankruptcy may be in your best interest.

My Bicycle Accident - A Detailed Account Of a Woman Who Didn't Care

It was Monday at 6:05 p.m. when I was finishing up the last leg of my bicycle ride. It was 54 degrees outside and was raining intermittently. Nevertheless, I needed to go for a ride, knowing that I would be safe and careful during the entire trip.
All went well for the majority of the ride. I traveled through Kings Point where the trees were in bloom. The rain drops were hitting my day-glo bright orange bicycle pants. The wind was rejuvenating through my bicycle helmet ventilation system. The excitement of pushing two pedals up and down repeatedly was invigorating. The scenery was magnificent despite the cloudy, overcast and slightly cool day. Being an experienced bike rider I can tell when it's a good day for biking and when it's not. Today, despite the minimal weather, it was still a good day for a short ride. Little did I know what awaited me as I headed back through the center of town into Great Neck.
As I pedaled South on Middle Neck Road, the main strip of road through the center of Great Neck, I marveled at the number of stores that opened like the blooming tulips this Spring, and shortly thereafter wither away and close for lack of steady business. Middle Neck Road is a street usually teeming with car traffic, especially during rush hour at 6:00 p.m. In most parts of Great Neck it's a two lane road with two lanes of traffic in each direction. At some points the street narrows and only can accommodate one lane of traffic in each direction. The entire length of Middle Neck Road is extremely commercialized and parked cars can always be found on both sides of the street at parking meters.
I had just passed Cedar Drive near the police station. I was heading straight intending to go to the Chinese restaurant to pick up dinner for my family, only two blocks away. When I ride in the street, I always ride with traffic, as I'm supposed to do, and as close to the parked cars as possible, to avoid the traffic in the street. I was pedaling at 12 miles per hour with excellent visibility on a slight upgrade. There were no cars behind me as I entered the main section of town. Nor were there any cars pulling out of their parking spot.
In a split second, right in front of me, I saw an arm fling open the driver's side door of a parked Toyota. The woman who threw open the door never looked behind her to see if anyone was there. Had I been driving a car, I would have effortlessly torn off her driver's door and seriously injured the woman whose arm had just carelessly flung open fully the driver's door. Unfortunately for me, I wasn't in my car. I was on my bike. The momentum of the moving door together with the impact of the edge of the car door with my right leg and was devastating. The door opened directly in my path. I had nowhere to go. The car door flung out so quickly that it threw me and my bike directly into the center of the road. My forward momentum was no longer straight. Instead, I was now diverted with extreme force right into the middle of traffic of an extremely busy road. My bike, which until that moment had been able to propel me down many a street at comfortable speeds ranging between 15 to 30 miles per hour, now became suddenly immobile.
As with any accident, when you stop a moving vehicle suddenly, the people inside the car or train or bike still continue to move forward at the speed at which they were traveling at the moment of impact. When that person comes into contact with a fixed immovable object, that's when injury occurs.
My bike stopped still. I didn't. I went flying over the handlebars with no place to go but forward and down. My arms flew out in front of me to brace the impact with the ground. Only days later did I remember that you are never supposed to put your hands or arms out in front of you to break your fall, because that results in fractured wrists, and arms. Instead, bike riders going over the handlebars are reminded to try and roll with their momentum and roll over, like a tumble-salt you did when you were a kid (without hitting or bending your head or neck). The problem is that when you're in the middle of a shattering impact between steel, metal and glass, you have no time to think about what you're supposed to be doing, only why you're now lying on the ground in the middle of the street that cars are currently using.
Luckily for me there were no cars directly behind me. If there were, I probably wouldn't be writing this account of what happened to me, rather one of the obituary reporters probably would. I didn't hit my head, nor did I lose consciousness. I do remember very clearly letting out loud screams of curses directed mostly toward the middle aged woman who had opened her car door without the slightest of cares. I didn't notice it immediately, but there were two women who witnessed the collision of the car door with my moving form. The look of shock on their faces told volumes about what they just saw, without either of them saying a word. One woman proclaimed "Oh my God! I've never seen anything like that! You just flew over your bike when she hit you with her car door." The woman who opened her car door, to her minimal credit, immediately came over and apologized profusely, not once but multiple times. I got up from the street within moments and began limping horribly to the sidewalk where I tried to gather my wits and see if all of my bodily parts were still attached. They were. But I noticed immediately burning and stinging in various parts of my body including my right leg, both my arms, and my left shoulder. What made matters even worse was that I was trying to convince myself that despite this impact I was totally fine even though it was obvious to everyone at the scene that I couldn't walk very well. I happened to glance toward the street while taking stock of body, that I noticed my bike was smack in the center of the road, blocking all traffic in the southbound lane. I hobbled over to my bike and gingerly carried it to the sidewalk.
To a biker, a trusty bike is worthy of trust and respect. It gets you from point A to point B with little or no problem. If properly maintained it will take you places you've only dreamed of. A broken bike can probably be as upsetting to a biker as their own physical injuries. In any event, it's just a bike, and like every material item we own, can eventually be replaced. We, as people, cannot.
Both witnesses volunteered to call an ambulance or the police (the station was literally 30 yards away). I declined, still opting to convince myself that I was alright. My hands moved, I was conscious, I could feel and I could talk. I knew I was bruised and banged up, but didn't feel I broke anything major. My right thigh, also known as the femur- the longest and strongest bone in our bodies, didn't act or feel as if it was broken. I assumed that if it was broken, I wouldn't be able to walk at all and would be in excruciating pain. One of the witnesses suggested I see a doctor right away- good advice, but I still had to get dinner home to my family and still convince myself I was ok. This same witness also suggested I obtain the woman's insurance information in case I decided to file a claim. I now looked at the car for the first time. It was a red Toyota convertible, two-door. The woman with dirty blond hair hesitated and instead offered to pay me for my troubles right then and there. Still not being able to fully comprehend what was happening, I was about to open my mouth to let her know what I do for a living when the witness blurted out, "Oh no! Don't you let her get away with that! You might have some significant injury that you don't know about yet and by taking her money now you'd be doing a terrible thing." I looked from one woman to the next to the next. Three women in all. Two were witnesses, the other, the careless woman who caused me to be in a slightly perplexed state. I finally figured it out. She wanted to buy me off right there. She even asked to see my leg and asked me to roll up my pants. The other witness said "You're not a doctor, what good would that do?"
When I came to my senses, I finally told my audience what I do for a living. "I'm a personal injury and medical malpractice attorney," I said. The red Toyota woman dropped her mouth in shock. The eyewitness expressed shock as well. "Well how about that? You hit the worst person you could ever expect- a personal injury attorney." I collected the Toyota woman's information, then looked her straight in the eye and said "I could understand if this was my fault. But it wasn't. You never looked to see if anyone was behind you when you opened your g*damned door. If you had, you'd have seen me and waited for a moment until I passed you." With that, she again apologized, got into her car and drove away, forgetting about whatever it was that she had gotten out of the car to do in the first place.
There is a book called The Kindness of Strangers that my wife has on her shelf that I never bothered to read. I mention it only to contrast my years as a trial attorney representing tragically injured people where I never truly appreciated what happens to a person at an accident scene. The eyewitness, who turned out to advocate for my well- being offered to take me and my broken bike home, without knowing anything about me, or even where I lived. Even more impressive was that she insisted that we stop at the Chinese restaurant to pick up the dinner my family so eagerly awaited. Finished with that task, this stranger deposited my bruised and injured body to my front door, Chinese food in hand and my bike huddled in the corner without a second thought. All I could say was "Thank you so much for your kindness." Without another word she drove out of my driveway, back to her daily activities while I walked in the front door with a sense of foreboding knowing that my large family would start assaulting me with questions the moment I told them what had happened.
After recounting in detail the events that had just transpired, I showered and hobbled my way downstairs to partake in the Chinese food I had just picked up. I knew that later and even the next few days, I'd feel every bump and bruise where previously I was healthy. Looking back on this moment in time, I can only be thankful that I wasn't seriously hurt. I will live for another day and long to see the sunrise and the sunset. I was fortunate today and recognize that when we're injured, it's not what we have left that matters, but really what has been taken away from us that is most important. That's the true element of damages.
Thanks for being a captive audience.

Gerry Oginski is a personal injury accident attorney who practices exclusively in the State of New York. This account is totally true and happend to Gerry while he was riding his bike earlier this week. He has represented bicyclists injured in accidents with cars and pedestrians. He handles cases involving car accidents, trip and falls, dog bite cases and medical malpractice cases. His practice takes him to all five boroughs in the Greater New York area including the Bronx, Brooklyn, Queens, Manhattan and Staten Island and Nassau & Suffolk counties.
Take a look at Gerry's website to learn more about accident and injury law. Free special reports and over 200 frequently asked questions and answers to legal questions about accidents and lawsuits. We've had thousands of hits each month. I guarantee there's something there for you. http://www.oginski-law.com 516-487-8207
Also, take a look at Gerry's FREE NY Medical Malpractice Video tutorials: http://medicalmalpracticetutorial.blogspot.com