Cross-border agreements fail on the mechanics — currency, payment routes and enforcement — long before anyone argues about the commercial terms.
Cross-border commercial agreements rarely come apart over the commercial bargain. They come apart over the mechanics that were treated as boilerplate: which currency, through which route, under whose law, enforced in which court.
Currency and payment routes
Where the parties transact in different currencies, the agreement must answer three questions: which currency is the obligation denominated in, which is it payable in, and who bears the difference. Silence defaults to argument. Foreign exchange availability adds a further layer — an obligation to pay in a currency the payer cannot lawfully source is an obligation to breach.
- State the currency of account and the currency of payment separately
- Fix the conversion rate source and the conversion date
- Address what happens if the payment route becomes unavailable
- Allocate bank charges and correspondent fees expressly
Governing law is not the whole answer
Choosing a governing law resolves how the contract is interpreted. It does not resolve which mandatory local rules still apply, and in most jurisdictions several will — competition, tax, exchange control, employment and data protection among them. A foreign governing law does not displace a domestic regulator.
Design for enforcement
The practical test of a cross-border agreement is what happens when a judgment or award needs to be enforced against assets in another jurisdiction. Where enforcement is likely to be difficult, structure around it: parent guarantees from an entity in a reachable jurisdiction, escrow arrangements, security over identifiable assets, or staged performance that limits exposure at any point in time.
Ask early where the assets are. It changes the drafting more than the choice of law does.
Cross-border work rewards specificity. Every term that could mean two things in two markets should be defined to mean one.
This article is general commentary, not legal advice. Speak to our team about how it applies to your circumstances.
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