RELATORE LOREDANA GATT WORKSHOP CONFINDUSTRIA PESCARA 13 LUGLIO

RELATORE - LOREDANA GATT WORKSHOP CONFINDUSTRIA PESCARA 13 LUGLIO 2017 WWW. SYNPRO-AVVOCATI. IT

IMPORTANCE OF LANGUAGE USE IN INTERNATIONAL COMMERCIAL TRANSACTIONS

DIFFERENCES TO TAKE INTO CONSIDERATION BEHAVIOUR - COMPORTAMENTO LEGAL SYSTEM - IL SISTEMA GIURIDICO CULTURE - LA CULTURA POLITICAL SITUATION - LA POLITICA ECONOMY - L’ECONOMIA

How do we obtain necessary insight? LOCAL EXPERTS INTERNATIONALISATION CONSULTANCIES Accountants Law firms Ongoing dialogue between consultants

ENTERING INTO COMMERCIAL RELATIONS v CORRESPONDENCE – LETTER –EMAIL v NEGOTIATION v MEMORANDUM OF UNDERSTANDING v LETTER OF INTENT v PRELIMINARY AGREEMENT v AGREEMENT OR CONTRACT

CORRESPONDENCE

NEGOTIATION TERMINOLOGY

AGREE PROPOSE INTERRUPT DISAGREE TO AVOID !!

AGREE This is acceptable I can work with this This /Tha tl good ooks That sounds great

PROPOSE My expectation is in the range of…… I was thinking…. . Would you consider? What about……? Is…. . At all possible?

INTERRUPT May I say something? Before you move on, I’d like to say something. Can I jump in here? Can I just say something here? One second……. let me see if I get this right…. .

DISAGREE Our main concern is…. Our intention is…. . I don’t see it that way Well …. . In my opinion It is important that we consider…. I’m afraid I disagree

TO AVOID MAYBE PERHAPS COULD YOU? SORRY I THINK

PRELIMINARY DOCUMENTATION • LETTER OF INTENT • MEMORANDUM OF UNDERSTANDING • PRELIMINARY AGREEMENT

LETTER OF INTENT Interim agreement that summarizes the main points of a proposed deal or confirms that a certain course of action is to be taken. Normally it does not constitute a definite contract but signifies a genuine interest in reaching the final agreement subject to due diligence, added information or fulfilment of certain conditions. The language used in writing a letter of intent is of vital importance and determines whether it is only an expression of intent or an enforceable undertaking. Also called “memorandum of undertaking” or “precontract”.

LETTER OF INTENT Letter of Intent (LOI) Date: day/month/year Ref. No: To: whom it may concern Through: I …………. . …………under signed, as Managing Director of (company name here) hereby confirm with full legal and corporate responsibility and under penalty of perjury that we are ready, willing and able to enter into a contract for the purchase of the following commodity as specified below and that funding is available including any import/export permits needed to fulfill the purchase of the commodity as specified below. Also, hereby we introduce our exclusive purchase representative as specified below for this purchase by which any negotiations by the suppliers must be handled and finalized; Commodity: Our Company Information: We understand that any and all offer and/or contracts are subject to successful Seller verification of funds availability. We hereby give our written permission for the Seller to conduct a soft probe of our account and that our Bank has been informed to this effect. Signature Person Name Managing Director Company name

MEMORANDUM OF UNDERSTANDING A document that expresses mutual accord on an issue between two or more parties. Memoranda of understanding are generally recognized as binding, even if no legal claim could be based on the rights and obligations laid down in them. To be legally operative, a memorandum of understanding must (1) identify the contracting parties, (2) spell out the subject matter of the agreement and its objectives, (3) summarize the essential terms of the agreement, and (4) must be signed by the contracting parties.

Contratti internazionali più utilizzati dalle aziende v v v DISTRIBUTION AGENCY JOINT VENTURE SALE LICENSING

INTENTION TO CREATE LEGAL RELATIONS A contract does not exist simply because there is an agreement between people. The parties to the agreement must intend to enter into a legally binding agreement. This will rarely be stated explicitly but will usually be able to be inferred from the circumstances in which the agreement was made.

OFFER AND ACCEPTANCE A contract is formed when an offer by one party is accepted by the other party. An offer is a definite promise to be bound, provided the terms of the offer are accepted. This means that there must be acceptance of precisely what has been offered.

CONSIDERATION Consideration is the price paid for the promise of the other party. The price must be something of value, although it need not be money. Consideration may be some right, interest or benefit going to one party.

WHY IS LANGUAGE IMPORTANT ? Language of CONSENT Language of NEGOTIATION Language of DISCRETION Language of OBLIGATION

AGREEMENT STRUCTURE FRONT OF AGREEMENT LEAD IN BODY OF AGREEMENT BOILERPLATE CLAUSES

THE FRONT OF THE AGREEMENT 1. TITLE 2. THE PARTIES 3. RECITALS

1. TITLE v KEEP IT SIMPLE SALE AGREEMENT v TO REFLECT BOTH TRANSACTIONS IF MORE THAN ONE TRANSACTION LICENSING AND MAINTENANCE SERVICES AGREEMENT

2. THE PARTIES 1. HOW TO REFER TO INDIVIDUALS 2. COMPANIES 3. REPRESENTATIVES OF COMPANIES

2. THE PARTIES - EXAMPLE “ This sales agreement entered into today the 9 th of May 2017 between Nuova Società Limited, a company registered in Italy with company registration no. 1111, herein represented by Mr. Paolo Rossi (Italian tax registration no. XXXXX)…. Hereinafter referred to as the“Seller”

3. RECITALS Preliminary parts of a contract or deed that only declare or explain particular background facts of the transaction, but prescribe no conditions.

Why are recitals used? What kind of language do we use in recitals? Are they binding?

3. RECITALS - example “ Whereas the Seller is a wholly owned subsidiary of Madre Societa Sp. A; Whereas the parties entered into a letter of intent dated …… Whereas the Purchaser intends to purchase from the seller the ------”

LEAD-IN « now therefore, the parties agree as follows…. »

DEFINITIONS Avoid unnecessary definitions. The main purpose of a definition is to achieve clarity without needless repetition. For this reason, "it is unnecessary" to define ordinary words that are used in their usual dictionary meaning. Do not define in a way that conflicts with ordinary or accepted usage Do not define a term that is used only once or infrequently. Place a definition where it is most easily found by the reader. Do not use "must" in a definition

DEFINITIONS - EXAMPLES Act means the Surface Mining Control and Reclamation Act of 1977. OSMRE Director means the head of the Office of Surface Mining Reclamation and Enforcement. Regional Director means the head of the Office of Surface Mining Reclamation and Enforcement in the region in which the state applying for a grant under this part is located.

THE BODY OF THE AGREEMENT OBLIGATIONS AND DUTIES THE LANGUAGE OF OBLIGATIONS CHOICES THE LANGUAGE OF DISCRETION FACTS THE LANGUAGE OF POLICY

THE BODY OF THE AGREEMENT IMPORTANT CLAUSES • • TERM OF AGREEMENT OBLIGATIONS OF THE PARTIES CONDITIONS PRECEDENT REPRESENTATION AND WARRANTIES INDEMNITY LIMITATION OF LIABILITY EARLY TERMINATION/ WITHDRAWAL CONFIDENTIALITY

LANGUAGE OF OBLIGATION What is an obligation? A formal, binding agreement or acknowledgment of a liability to pay a certain amount or to do a certain thing for a particular person or set of persons; esp. , a duty arising by contract

THE LANGUAGE OF OBLIGATIONS MUST/MUST NOT THE PARTIES AGREE TO SHALL/SHALL NOT HAVE TO DO NOT HAVE TO BINDS ITSELF TO….

LANGUAGE OF OBLIGATION RESPONSIBILITY LIABILITY PERFORM - DISCHARGE - CARRY OUT – FULFIL BREACH

LANGUAGE OF OBLIGATION- EXAMPLES The Purchaser shall pay the Seller the Purchase Price within seven Working Days from the date of receipt of Goods. When "shall" is used to describe a status, to describe future actions, or to seemingly impose an obligation on an inanimate object, it's being used incorrectly. Landlord will clean and maintain all common areas. The Principal must provide all necessary documentation to the Contractor.

LANGUAGE OF DISCRETION Discretion is normally conveyed by use of “may” “Is entitled to” “Is not required to”

LANGUAGE OF DISCRETION - Examples If it receives Acme’s prior written consent, the Vendor may cause one or more subcontractors to perform Services. The Contractor is not entitled to receive a reimbursement of expenses

LANGUAGE OF POLICY In addition to stating what to do, what not to do and choices a contract also usually contains policy. How do we express policy? PRESENT TENSE OR WILL

LANGUAGE OF POLICY - EXAMPLES Any attempted transfer of shares in violation of this agreement is void The laws of the State of New York govern all matters arising out of this agreement The agreement will terminate on 20 June 2020 Interest is payable at the rate of 8% per year.

Boilerplate provisions or clauses usually appear at the end of a contract. Sometimes they are referred to as the “miscellaneous” provisions. Because they are at the end, people sometimes don’t feel they are important and don’t read or pay any attention to them. Big mistake! Boilerplate provisions are important because they affect your legal rights under the contract as much as all other clauses. The purpose of boilerplate provisions is to save the parties and drafters of contracts time with commonly used and understood language.

Entire Agreement Entire agreement clauses provide that the contract in question constitutes the entire agreement and understanding between the parties with regard to the subject matter of the contract. By having an entire agreement clause, the contract will supersede any previous agreements and understandings between the parties, and therefore avoids the risk of any agreement made orally or in writing prior to the execution of the written contract being interpreted as being part of the legal contract between the parties.

No waiver clauses generally provide that a failure or delay in exercising a right will not constitute a waiver of that right and thus aim to preserve termination (and other) rights, and can avoid inconsistent acts constituting a waiver of a contractual right of termination.

Severance At times, certain clauses of a contract may be held void or unenforceable due to illegality, invalidity or unenforceability. This may occur for example by a change in regulatory laws after a contract is signed which make certain obligations set out in such contract illegal to perform, or if a restrictive covenant in an employment agreement is considered to be too broad. Without a severance clause, a void clause may cause the entire contract to become void. A severance clause provides that, instead of the entire contract terminating or becoming void, only the offending clauses will be void or unenforceable and the rest of the contract will remain intact.

Force Majeure A Force Majeure clause (French for "superior force") is a contract provision that allows a party to suspend or terminate the performance of its obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible. The provision may state that the contract is temporarily suspended, or that it is terminated if the event of force majeure continues for a prescribed period of time.

LANGUAGE OF CONTRACT If an international contract is in two o more languages (English, Spanish, French, German, Chinese, etc. ), the language clause has to establish which version prevails over the others in case of disputes. The whole text of the present Contract, as well as the documents derived from it, including those in the Annexes, have been written in . . . . and English, both versions being deemed authentic, but for legal purposes the text in. . is to be given priority of interpretation.

GOVERNING LAW The Governing Law or Choice of Law clause specifies that the laws of a mutually agreed upon jurisdiction will govern the interpretation and enforcement of the terms of the contract. This Agreement shall be governed by and construed in accordance with the laws of the Republic of Italy, without regard to its conflict of laws rules.

JURISDICTION By the use of a jurisdiction clause or forum clause, the parties to a contract elect which courts will have the right to adjudicate disputes under the contract. For example, the courts of Delaware or the courts of New Zealand. A clause may purport to grant jurisdictional rights to the courts of more than one jurisdiction. Jurisdiction is commonly granted on an exclusive basis (meaning that no other courts except those specified should be able to adjudicate disputes) or a non-exclusive basis (meaning that other courts may have the right to adjudicate disputes, in addition to the named courts). An example of a straightforward exclusive jurisdiction clause is set out below. The courts of. . have exclusive jurisdiction to adjudicate any dispute arising under or in connection with this Agreement.

ARBITRATION CLAUSE Some contracts include language specifying that all disputes under the contract will be resolved by arbitration. All disputes, controversies, or claims arising out of or relating to this contract shall be submitted binding arbitration in accordance with the applicable rules of the American Arbitration Association then in effect.

Contract drafting tips. .

1. Be precise (accurate, complete and, exact), clear, specific, and focused. 2. Balance precision with simplicity. 3. Use plain English. 4. Avoid jargon. 5. Use sentences with less than 25 words. 6. Avoid double negatives. 7. Keep subject and verb together. 8. Use active not passive voice (“Buyer terminated the contract”. . . not. . . ”contract was terminated by Buyer”). 9. Sequence logically by chronology of events.

10. Cut the non-essential. 11. Avoid sexist language. 12. The entire document counts, not isolated provisions. 13. Specific words control general ones. 14. No Latinisms. 15. When in doubt, punctuate. Punctuate to prevent misreading.

16. Write numbers as both words and numerals such as "ten (10)" to reduce the chance of errors. 17. Contract writing is not creative writing; be clear, direct, and precise, not reflective, provocative or entertaining. 18. Be consistent in using the terms of art like " Licensed Product" and "Licensed Software". Don't call them items, goods, products, etc. , elsewhere in the contract. 19. Write as if a judge and jury would have to understand it. 20. Define important words when first used. 21. Consider "what if" scenarios to flush-out issues. 22. When you write "including", consider adding "but not limited to. ”

FALSE FRIENDLY TERMS Ecco alcuni esempi: in ambito legale-contrattuale, il termine “instrument” significa “documento e non “strumento”, mentre “executed” andrà tradotto con “firmato” (o “perfezionato”) e non “eseguito” “counterpart” non è la “controparte” (che si traduce invece con “counterparty”) parte non è “part” ma party Società non è “society” ma company