The risks are almost innumerable, especially in an emerging free-market economy. Wise foreign investors have a good grasp of both the legal and cultural climates of the country in which they are investing. International Contracts Contracts for the international sale of goods are not that different from those for selling goods domestically. In the absence of a treaty, foreign countries respect each other's court decisions, if at all, only as a matter of courtesy. Since contracting parties should anticipate the possibility of disputes, they should include provisions controlling which country's law should apply, which country's courts have jurisdiction and whether the parties agree to submit their disputes to arbitration.
Many international contracts begin as non-binding letters of intent.
The final contract should provide which language will control the transaction and which currency will govern it. Often, parties to international sales contracts stipulate to binding arbitration under one set of standard arbitration rules or another. The International Chamber of Commerce provides a good framework for dispute resolution. Manufacturers typically sell goods overseas through agents and distributors. An agent is usually commission-based, and works essentially as a broker.