Running an international business ? A note about debtors - Housesit Match

Running an international business ? A note about debtors

1 Jun, 2020

Running an international business ? A note about debtors

Spread the love

If you run an international business either as one of our expat homeowners , housesitters or a national in the UK you need to be mindful of certain challenges. Debtors present similar problems at home and abroad. We’ve asked UK expert Martin Kingman of PLC Debt  to share his insights on the matter.

It Can Pay To Play A “Home” Fixture

international business

If you are thinking of trading internationally, it is worth remembering you face the same problems with overseas debtors that you do on home soil. Plus there is the added headache of defining whose laws govern the agreement.  Before you enter into any contracts overseas you need to establish who it is you are dealing with. Be confident that the business order is a legitimate request and be aware of the company status. It also helps to understand the legal process of the country. There maybe potential political issues which could arise to cause you further problems and complications.

Your standard terms and international business

Generally, you want to do business on your standard terms. Standard terms of business are usually prepared by an expert who has a thorough knowledge of your business and your exact processes.  If the other company has its terms, then the rule of thumb is that the final one sent to the other before the contract is formed becomes the terms of the agreement.  Of course, the terms have to be incorporated into the contract (but we will take it as read that they have been).  Let’s assume that your terms apply to the contract. Let’s examine how they can assist you in recovering your money:

Jurisdiction Clause

This is the daddy of all clauses if you are trading overseas.  It needs to be specified that the contract is governed by the English law and that the English courts have the exclusive jurisdiction to hear and determine any claims or disputes.  In essence, this means that you get a home game if the matter is disputed. Moreover, you will not have the inconvenience of trying to find an advisor in another country. It can be a challenge tryng to understand the finer points of a different commercial legal system in order to bring a claim.  This also avoids any additional complication with translations.

Other Clauses

Your terms should include:

  • Full recovery of your legal costs and expenses in the events that your invoices are not paid within the terms;
  • Provisions that interest and compensation are added on to the outstanding balance; and
  • if you are providing goods, a retention of title clause over any goods until paid in full means you can collect any of your items if they have not been paid for.

If you are doing a lot of international trading you may want to use incoterms. The International Chamber of Commerce established these trading guidelines. They define where the risk and liability take place and passes from one party to the other.  We always recommend you seek specialist advice on this.

You also can consider arbitration under the New York Convention. Formally this is called title The Convention on the Recognition and Enforcement of Foreign Arbitral Awards. This has wide application as 163 countries are currently signatories. This is an attractive option where enforcing a judgement in the jurisdiction of your debtor may be difficult. Certainly, it may be cheaper to arbitrate than to issue legal proceedings.

Using a quality set of drafted terms will offer a whole scope of protection whether you are operating a domestic or international business. Seek expert advice should you wish to have your terms of business for either domestic or international business either overhauled or completely rewritten.

Profile – Martin Kingman – PLC Debt

Martin is a Fellow of the Chartered Institute of Legal Executives and the Chartered Institute of Credit Management. He has worked in the legal civil litigation/dispute resolution field for 20 years. Martin specialises in UK and Worldwide Debt Recovery and Insolvency.

A lawyer with high competency in IT systems, Martin supports clients with experience as a business and management consultant. He offers a unique blend of practical, commercial and legally astute advice which is in demand from a wide range of clients. Many clients find that the insolvency expertise is essential in evaluating plans and ensuring that all decisions are considered from angles not within mainstream thinking.
22 May 2020


Spread the love
LamiaW

LamiaW

Founder and Director of HouseSitMatch - I'm a hands-on Admin on the site. Please ask any questions and as soon as I can I'll happily answer and assist where I can.

Leave a Reply

You must be logged in to post a comment.