Business contracts with foreign partners under Ukrainian law

[Law-Analytics]

During the procedure of concluding sale and purchase agreements or barter contracts between Ukrainian entrepreneurs and foreign business entities, regardless of their ownership and activities, the parties wish to resolve their contractual relationships. Article 1 of the Law of Ukraine “On Foreign Economic Activity” terms this particular form, as foreign economic agreement (contract). Due to this legislative rule, we define it as a material contract of two or more economic entities and their foreign counterparts, aiming the establishment, modification or termination of their mutual rights and duties in foreign economic activity.

The subjects of foreign economic activity are entitled to conclude any kind of foreign economic agreements (contracts), except those which are directly and in exclusively form prohibited by the
Ukrainian legislation.

There is no need for subjects of foreign economic activity to get permission from any governmental body, department or superior organization for concluding of economic contracts, except cases provided by Ukrainian legislation.

Foreign economic agreement (contract) is concluded by the subjects of foreign economic activity or their representative in written form, except cases provided by international agreement or Ukrainian legislation. The representative can be entitled to conclude foreign economic agreement (contract) by the orders, statutes, treaties or other reasons that are not contradictory to the Law of Ukraine “On Foreign Economic Activity”. Actions that are undertaken in the name of the subjects of foreign economic activity are to be considered as their own acts.

The rights and duties of foreign economic agreement (contract) are stated in contract and determined by the substantive and procedural law of the conclusion place, except the parties have agreed some conditions in other way.

Conditions that must be provided in the foreign economic agreement (contract):

Title, number of the agreement (contract), date and place of its conclusion

Preamble
The preamble states the full names of the parties indicating the country’s short definition of the parties as contractors (“Seller” “Buyer”, “Customer”, “Supplier”, etc.)

Subject of the agreement
Goods (works or services) delivered from one party to another shall be identified in this section of the agreement with specifying the exact name, brand, variety or end-result of work.

Number and quality of goods (scale of works or services).
Here parties to the contract shall determine, accordingly to the nomenclature, the accepted for this type of goods measure unit (tonnes, kilograms, etc.), its total quantity and quality characteristics.

Basic terms of goods delivery
In this section the type of a transport and the basic delivery provisions should be determined (according to Incoterms rules).

The price and general value of the agreement (contract)
This part is dedicated to the one unit price, general value of goods, works or services and to the currency, which will be used in these contract relations.

The terms of payment
Here the parties have to state what method, procedure, terms of financial settlement and guarantees will be used in the agreement.

Conditions of goods (works, services) acceptance and delivery
In this section transfer of goods terms and place and the list of consignment details shall be determined.

Packaging and labeling
This section contains information on product packaging (boxes, bags, containers, etc.), labeling (name of the seller and buyer, the agreement (contract) destination, special terms of storage and transportation, etc.), and terms of the return if necessary.

Acts of God
This section contains information about the conditions under which terms of the agreement (contract) can not be executed by the parties (natural disasters, war, embargo, government interference, etc.)

Sanctions and complaints
This section establishes the procedure of penalties, damages and claims enforcement.

Settlement of disputes in court
Conditions and the procedure for settling disputes in court on the interpretation, failure and /or improper execution of the agreement (contract) shall be determined In this section.

The parties’ location, mailing and billing information
By the mutual consent of the parties, they may specify additional conditions: insurance, quality assurance, agents, carriers, defining standards of delivery, the terms of the transfer of technical documentation for the goods, brands, order of taxes payment, customs duties, the number of signed copies of the agreement, opportunity and procedure for introducing amendments to the contract and others.

Be attentive and careful! The agreement (contract) may be invalidated in court, if it is inadequate to the Ukrainian legislation or international treaties of Ukraine.

Business contracts with foreign partners under Ukrainian law | Law Analytics

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