Contracts involving parties located in different States — international sales, distribution, agency, licensing, service agreements, financing, joint ventures — add a layer of private international law to the ordinary complexity of contract drafting. The parties must determine which law will govern the contract, which courts or arbitral tribunal will resolve disputes, in what currency obligations will be expressed, and how the contract will be enforced in each jurisdiction.
The Argentine Civil and Commercial Code, in Articles 2649 to 2655, recognises party autonomy in the choice of applicable law and jurisdiction, subject to public policy limitations and internationally mandatory rules. Experience consistently shows that all such clauses must be carefully drafted at the outset: attempting to negotiate them in the middle of a dispute is always too late.
The parties may choose the law governing the contract, except in matters regulated by mandatory rules. It is advisable to select a legal system that is familiar to both parties and their advisers. The choice must be express.
Disputes may be submitted to state courts (of either country) or to international arbitration (ICC, ICDR, LCIA, CIAR, Buenos Aires Arbitration Tribunal). Arbitration is generally more efficient for international commercial disputes, and awards are enforceable under the 1958 New York Convention.
The contract language must be specified (and, if bilingual, which version prevails), along with the payment currency. Where one party is based in Argentina, Argentine foreign exchange regulations (BCRA) must be taken into account.
Long-term contracts should provide for extraordinary circumstances and include mechanisms for adaptation or termination.
Particularly important in technology transfers, NDAs, trademark and software licences, and know-how agreements. Argentine Law No. 22,426 applies where relevant.
Where one party is based in Argentina, consideration must be given to BCRA regulations on access to the foreign exchange market for payments abroad, applicable withholding taxes (income tax for foreign beneficiaries, VAT, gross income tax), and existing double taxation treaties. A well-structured transaction addresses these issues from the contract design stage.