Top Ten Tips in Drafting and Negotiating Contract (Part 5)
18/6/18 Top Ten Tips in Drafting and Negotiating Contract (Part 5)
9. Contract-Signing Formalities
In some jurisdictions, for a contract to be valid, the parties have to go through formalities that might seem almost ritualistic to those familiar with the relatively informal U.S. way of doing things. For example, each party might prove that whoever is signing is authorized. And be prepared for only original signatures to be accepted, or for signatories to wield corporate seals.
Some of these formalities might seem quaint, but they might equally be appropriate in the context of legal systems that offer limited protection against fraud.
10. Using Local Counsel
Generally, it’s essential to engage local counsel if you want to avoid tripping over local rules. But be clear with them about their role. In some countries, local counsel might be so concerned about exceeding their brief that they fail to think creatively. Or out of respect for your role as managing attorney, they might analyze a situation from both sides without actually recommending what they would do if they were in your client’s position.
And if you have in mind engaging in no-holds-barred negotiations, remember that after your deal is done, your local counsel and the people on the other side of the deal will have to continue to live together in that particular pond.
A theme that runs through these points is, be alert! Don’t assume that a transaction will proceed in the same manner as it would in your home jurisdiction. Instead, assume that it won’t, unless you confirm otherwise.