Global contract disputes, unilateral termination notice? Law firm Veat’s successful legal response cases.

Law firm Veat comprehensively reviewed the legality and possibility of legal response regarding the unilateral contract termination notice received from a counterparty at the request of a global bio company A (hereinafter referred to as "the client").

In particular, we meticulously analyzed international private law and relevant Korean laws related to the governing law of the contract, and provided legal advice to protect the client's rights.

This case involved a situation where the client's counterparty unilaterally notified the contract termination without presenting a clear reason for termination.

Law firm Veat first meticulously analyzed the English contract between the client and the foreign entity. In particular, Law firm Veat meticulously reviewed the contract period and termination conditions stipulated in the English contract between the client and the foreign entity, and based on this, analyzed whether the client could resolve the dispute in a favorable position.

Also, a point that Veat particularly noted in this case was that the ‘governing law’ of the contract was set as foreign law. Since the governing law serves as the standard for contract interpretation in international contracts, Veat analyzed the legal system to be applied to the contract and the applicability of Korean laws based on international private law.

In particular, according to Article 45 of the Private International Law Act, the law expressly chosen by the parties to the contract shall be primarily applied. However, according to Article 20 of the Private International Law Act, Korean mandatory provisions that must be applied regardless of the governing law in accordance with the purpose of legislation may be applied even if foreign law is the governing law. Based on this, Law firm Veat reviewed whether this mandatory provision could actually help the client's contract termination dispute.

Important points to consider when drafting international contracts

When unexpected disputes arise during the conclusion and performance of an international contract, especially when the counterparty notifies the contract termination without prior notice, it may be disconcerting. Let’s look at what points to check in advance.

When drafting an international contract, it must adequately consider the legal differences and practices of each country so that the contract can be executed clearly and reliably. Important elements in an international contract include the governing law and jurisdiction, dispute resolution methods, contract language and interpretation, and payment terms.

First, the contract should clearly specify the law to be applied in the interpretation of the contract and in the event of a dispute, and the jurisdiction. The governing law means the law to be applied to the contract, which can prevent legal conflicts that may arise during contract performance.

Also, it is important to specify in advance the method for resolving disputes that may arise. International contracts often include methods such as mediation for resolution.

The choice of contract language is also important. English is generally used in international contracts, but a translated version in the local language may be necessary. Some countries require contracts in their own language, so it is advisable to review these factors in advance to maintain legal validity.

It is also important to clearly define the payment method according to the contract terms in an international contract. Specify payment methods, currencies, payment dates, and interest rates applicable in the event of delay to minimize unexpected exchange rate fluctuations and financial risks. Also, standardize the format to prevent confusion due to differences in date and time notation, and reflect cultural differences such as national holidays, if necessary.

Law firm Veat supports the client's global business success based on years of experience and in-depth expertise accumulated in drafting and responding to international contracts.

In particular, Law firm Veat has gained recognition and trust domestically and internationally through being selected as a finalist for the ALB Korea Law Award, and being recognized as a Leading lawyer by Legal Times. Veat’s legal advice, which excels in investment and M&A for startups and venture companies, serves as an important legal foundation for global business.

Through the comprehensive and systematic legal support of Law firm Veat, we help clients expand their business stably overseas and succeed on the global stage. If you need English contract drafting or international contract drafting, please contact Law firm Veat.

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Law firm Veat