Appunti integrati, International Business Law - Cavalieri

Contract Clauses

Minimum purchase quantity order: is meant to protect the seller, and there may be specific penalties.

Delivery terms: describes place, time and modality. Provisions about mean of transport, insurance, risks, delayed payment and other related issues may be included.

Tailored common clauses. These clauses are of only one gender, are necessary to every contract, but can be adapted to the needs of the parties for each transaction.

IP Protection, Confidentiality Exclusivity. Such as and IP Protection is usually very important, it regulates the reciprocal right of the parties on the intellectual property Ownership Trademark, Grant of concerned by the contracts, such as the of the and the Rights related to the Trademark. IP rights (trademark, patent, copyright, know-how, inventions, etc.) are also very influential to the bargaining power, so may often be the cause to an imbalanced negotiation. The Confidentiality clause, which is not that crucial in some sectors, regulates the disclosure of information.

exchanged throughout the life of the contract.

Exclusivity: is a clause that binds one or all the parties to accept the other as the only entity free to perform a certain task for them.

IP protection: regulates the rights on intellectual property of both parties. It often involves the right to use and dispose of related intangible assets.

Confidentiality: describes the obligation of keeping confidential part or all the information exchanged throughout the life of the contract, to such clauses may also be added the definition of what is considered confidential information. In other words, under an agreement with a confidentiality clause, it is mandatory for the Parties to deal with some data as a commercial secret and to not disclose these data to third subjects, especially not for lucrative purposes. Not only during the execution of obligation, but also during negotiation may be necessary to disclose some confidential information, and therefore these clauses can commonly be found on LOI. The respect

For confidentiality shares a strong bound with the Brocard principle of bona fides. We can assume that for the purpose of this agreement, it is necessary to disclose relevant data of one or both the Parties.

It would be wise, where convenient, not to define in detail the object of this clause, for instance, keeping this clause very general, and eventually add an exclusivity clause (for it to regulate which subjects are not involved by the confidentiality agreement).

Moreover, whether a breach of a confidentiality clause occurs, the affected party may suit the defaulting party for damages. Since it is hard to determine the proper amount of liquidated damages for each case, it would be worth considering adding a liquidated damages provision. Anyway, when parties decide to add such a clause, it should also be taken into consideration the approach of the applicable law towards penalty and liquidated damages (i.e. in common law systems the approach is generally very pragmatic and the liquidated damages).

shall be reasonable; in civil law systems the intentions are highly considered, a penalty clause may be used to encourage performance, therefore the forfeit may be higher). Also, if confidentiality is very important to one or both parties it would be worth considering adding an arbitration clause to the agreement. The Arbitration is in fact confidential… Also, other confidential ADR proceeding may be considered… Exclusivity: An exclusivity clause is an agreement between at least two parties by which is mandatory for one or both parties to purchase goods or services exclusively from another, or vice versa, dealing exclusively with the counterparty for a specific period. This ensures that the party providing or purchasing the product is the sole supplier or buyer of the product outlined in the agreement. This clause is often linked to a defined territory, especially in international contract, therefore limiting the freedom to perform in a certain area, with the aim of obtaining there.

A greater competitive advantage can be achieved through the inclusion of this clause. It is important to note that any breach of this clause can be easily proven, making the defaulting party responsible. Therefore, careful evaluation is necessary before accepting such a clause, taking into consideration various factors such as price, territory, and duration. This clause is closely tied to the bargaining power of the parties involved and may result in financial strain if future business opportunities are intentionally avoided due to exclusive partnerships with one party, typically the seller or distributor. Acceptance of such an agreement should only be considered if it can truly provide long-term advantages and profitability. In such cases, it may also be beneficial to include a set of risk allocation clauses, such as a price adaptation clause that allows for reasonable adjustments in pricing based on changes in production costs, or an hardship clause to protect the parties in case of unforeseen difficulties.

1. Occurrence of events would fundamentally alter the equilibrium of the agreement making its condition obsolete. When negotiating this clause, parties should make sure it works on both sides. In fact, the selling points of this clause may be interesting for both the supplier and the purchaser, by virtue of its power to limit who your partner works with, therefore obtaining a competitive advantage or becoming the sole exclusive provider of services or goods to a business. Both these obligations can be unilateral or mutual.
2. Duration, Validity and Effectiveness clauses. Related to the duration, validity, and effectiveness of the contractual cooperation itself, like the termination of the Duration/early termination, Right to withdraw, Execution and entry contract. Such as, into force, Non-assignment (or Favor Contractus), Severability, Notices. Duration and termination: it describes the period in which the Parties are obliged to perform their obligations. The life of a contracts usually ends with the

Discharge of obligations or for natural expiration. An early termination (like for force majeure) or pathological "death" of a contract occurs by mutual consent, because of default in performing obligations for one Party, or for breach of a contractual clause, etc. Duration of the contract is not always natural, early termination can happen because of an indispensable prerequisite is not fulfilled anymore, can be determined by a breach of the contract by one of the parties, a party may also have the Right to withdraw from a contract.

Right to withdraw: it is the right of the parties to terminate and exit an agreement. In some jurisdictions, it is possible to withdraw only by decision of one party or by occurrence of certain conditions.

Execution and entry into force: usually a contract is concluded/executed when signed or agreed orally, but inserting and adapting this clause to their needs, parties may change the conditions for the conclusion/execution and entry into force of a contract.

Also the moment of entry into force (when the Parties shall start to perform their obligations) can be further defined in this clause. Generally, this moment coincides with the execution, but it may also be postponed or subordinated to further conditions. Remember that, changes in factual circumstances may occur over time, and therefore it is not recommended to postpone the entry into force of a contract for excessively lengthy periods, increasing the risk of the contract to become null. In fact, the longer the period, the more likely is that economic and factual circumstances change. The Execution and the entry into force may not be contemporary. The conclusion or execution usually coincides with the signature. Generally, the Entry into Force coincides with the execution, and is the moment in which the contract starts to produce its effects. This moment can be postponed or subordinated to other conditions. Assignment/non-assignment clause: An assignment clause spells out which contractual obligations,rights, obligations, and duties may be transferred from one contractual party to another party. In this clause, the right of the assignor (one party) to transfer to the assignee, a third subject, his rights, obligations, and duties is expressed, subject to certain conditions. Anti-assignment clauses are commonly used to restrict the free assignability of contracts. However, in the case of intellectual property (IP) transfer, an exception to the assignment provision may apply, even if the contract is silent on the matter. This type of clause is particularly important in mergers and acquisitions (M&A) transactions, as these agreements often involve a long and closely intertwined relationship between the two parties, and a change in control may not be desirable. Additionally, the parties may have been attracted to the agreement based on specific selling points unique to one party, such as the nature of their relationship, the skills of their managers, or their distinctive personality. It is always possible to include an exclusivity clause to protect these unique aspects.theassignment clause not to be valid on an absolute term.

Severability/partial nullity: regulates the possibility and modality through which severea clause, in other words, what happens whether an agreement is partially or totally isdeemed invalid or declared as such in application of a law or regulation. It is possible toprovide whether the invalidity, nullity or voidability of any article or section shall orshall not affect or impair the enforceability of the remaining. Moreover, it is possible todetermine in advance the possibility to renegotiate that clause. Not in every law systema backup severability provision is provided in case of an invalid, null or void article in acontract. This is why it is important to consider the provisions of the applicable law, andalso to choose the most suitable jurisdiction to make up for the contract when mute.

This clause makes the contract stand even if some clauses become invalid.

Notices: define the form, modality of delivery and receipt under

which formal communication between parties takes place. - Risk allocation, are quite common in complex transaction and are aimed to minimize risk. (sono le più importanti sec il prof per il business) these clauses try to minimize two type of risks: the risks related to the transaction, the political or macroeconomic Adaptation:(inflation, currency,...) risks. The most important of these are: Hardship, Force Majeure; Penalty c./Liquidated damages clause.

Price, Currency;- Final clauses, try to diminish risks related to the enforcement, applicable law and relevant jurisdiction.

Risk allocation clauses

This set of clauses aims to allocate certain risks common to a business transaction of long duration. In fact, the longer is the time for the obligations to be performed, the more likely is that economic and factual circumstances may change by unforeseen factors. Since 11 these clauses not only should minimize related risks, but should also cover a wide range of scenarios, the possibility of

incurring in