In an increasingly global marketplace, it’s never been easier to do business internationally. But while securing a deal with an overseas client might feel like progress, the real question is — what happens when that client doesn’t pay? When your buyer is in another country, suddenly, your contract isn’t just a formality — it’s your first and last line of defence.
The truth is, not all contracts are created equal — and many are not nearly as enforceable as they seem. Whether you’re exporting software, licensing IP, manufacturing goods, or delivering services, understanding the enforceability of your agreements across borders is critical to getting paid, protecting your business, and avoiding costly international disputes.
Jurisdiction: Where Will the Dispute Be Heard?
The first thing that makes or breaks a cross-border contract is jurisdiction — the legal system under which disputes will be resolved. A UK-based business might naturally want English law to apply, but what happens if the client is based in Dubai, New York, or Singapore?
Without a clearly defined jurisdiction clause, you risk months of delays arguing about where a dispute should be heard before the real issue — non-payment — is even addressed. Even worse, the contract could fall under a jurisdiction that lacks transparency or favours local businesses, putting you at an automatic disadvantage.
Always specify the governing law and the venue for dispute resolution. And make sure it’s a country with a legal system you trust.
Clarity of Terms: Precision Protects You
One of the most common mistakes in international contracts is ambiguity. Vague payment terms, unclear delivery conditions, or loosely worded cancellation clauses can all create room for bad actors to delay or evade payment.
An enforceable contract must be clear, specific, and leave no room for interpretation. Spell out exactly what is being sold or delivered, the expected timelines, the payment structure, and what happens in the event of non-performance.
Cross-border deals require more than handshake assumptions or templated clauses. Tailored legal language — especially for foreign jurisdictions — is a must.
Enforcement Mechanism: Can You Actually Act on It?
Let’s say the contract is clear, and the buyer defaults. What’s next?
Even with a strong contract, enforcement depends on whether the buyer’s home country recognises and enforces foreign judgments. Some countries are part of international treaties (like the Hague Convention or the New York Convention for arbitration awards), which can speed up enforcement. Others may require local litigation, which can be slow, expensive, and uncertain.
That’s why many businesses include arbitration clauses in international contracts — they’re often more enforceable than court decisions. But arbitration isn’t a silver bullet. The structure, location, and scope of the arbitration must also be correctly drafted.
Due Diligence is the Other Half of the Equation
Even with the perfect contract, you can’t enforce it against a company that doesn’t legally exist anymore, has no assets, or was never legitimate to begin with. That’s where due diligence comes in.
Before you sign, you need to know who you’re really dealing with — who owns the company, whether they’re solvent, and if they have a history of default. An enforceable contract only works if there’s someone (and something) to enforce it against.
Secure Every Cross-Border Deal with VendSafe
At VendSafe, we specialise in international vendor due diligence and contract risk analysis — so your business can enter deals with eyes wide open. Our cross-border experts help you assess enforceability before the first invoice is even issued, giving you peace of mind and the legal edge you need to trade globally without exposing your cash flow to unnecessary risk.
If your clients are global, your protections must be too. Let VendSafe help you close smarter, not just faster. Contact us today!
