Doing Business in the United States

Foreign companies doing business in the United States should be cognizant of the fact that the terms and conditions to which they are accustomed or that are set forth in their documentation may not ultimately govern under US law. Moreover, even if they do govern, such foreign-oriented terms may not be sufficient to address the issues and pitfalls that typically arise under commercial agreements and arrangements in the United States. When purchase documentation of a buyer directly contradicts the sale documentation of a seller, for example, a situation referred to as the “battle of the forms” results. To the extent such disputes are ever litigated in the United States, foreign companies are frequently disappointed with the outcome.

Likewise, foreign companies that are inclined to rely on the documentation of their US counterpart (customer or supplier) to memorialize the business relationship need to understand that such documentation, as a matter of practice, is very favorable to the drafting party, and in the event of a dispute will almost always work to the advantage of their US counterpart. Simply translating or attempting to “Americanize” a non-US company’s standard form will in most cases be insufficient to address issues that may arise in the United States. Instead, such companies are best served by preparing a US standard purchase or sales form on the basis of which they may negotiate and define in writing the applicable Baker & McKenzie