Signing contacts with overseas vendor: which country's laws would govern the contract?


1

I'm confused on how contracts with overseas vendors would work in the event there is a dispute.

Lets assume I'm working with a development vendor in India. We have a contract and they decide to not honor it by making our source code public on GitHub.

Which country would the resolution need to take place in? Is that something that must be explicitly mentioned on the contract? Or is are contracts with overseas vendors completely useless?

Contract Outsourcing Legal Vendors

asked Apr 8 '14 at 22:57
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Gordon Hughes
7 points

2 Answers


3

1. Any well-drafted agreement will address (a) venue (where a suit must be filed) and (b) choice of law (which jurisdiction's law will govern). Generally, the party with greater negotiating power gets to make these (and other) decisions. Please see International Contracts: Choice of Law when the Parties Disagree.

2. However, unless a huge amount of money is at stake, and one has a high likelihood of prevailing, and one has the time and money to pursue litigation that may last for years (which especially is the case in India), it is unlikely one will be able to enforce an agreement against a foreign contractor.

You might find Three Ways to Protect Yourself when Developing Software Offshore helpful.

Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.

answered Apr 9 '14 at 02:31
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Dana Shultz
6,015 points

0

Unless your IP is worth millions and you have the legal resources to do so, litigation (especially in a foreign country) is never a good option. It's a distraction from running your business and often doesn't result in any recovery that justifies the resources (and your own time) spent on the matter.

answered Apr 10 '14 at 14:19
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Chrissie Gray
1,067 points

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Contract Outsourcing Legal Vendors