The United States remains the world’s largest and most dynamic market, offering immense opportunities for multinational companies. But entering into commercial relationships with US counterparties requires navigating a distinctive—and often challenging—legal landscape.
When disputes arise, litigation in the US can be costly and at times unpredictable. Unlike many jurisdictions, parties usually bear their own legal costs, regardless of outcome. Discovery can be expensive and expansive, and companies may find themselves subject to overlapping authority of multiple state and federal courts. And the public nature of US litigation may expose companies to reputational risks and may trigger regulatory scrutiny or follow-on litigation.
These dynamics can encourage parties to bring lawsuits even when their claims are weak, knowing the cost and uncertainty alone may pressure defendants to settle meritless claims.
The best defense? Understanding the US legal system and carefully drafting contracts with these risks in mind.
In response to these challenges, we are launching a new blog series focused on the primary issues for companies contracting—or seeking to contract—with US counterparties. Our goal is to provide in-house counsel and business leaders with practical guidance to negotiate and manage US contracts confidently.
What to Expect in This Series
- US Contract Law Basics for Non-US Companies: We’ll explain some of the distinctive aspects of US contract law and the common pitfalls that arise for non-US companies entering into US contracts.
- Due Diligence on Counterparties: We’ll explore the unique diligence considerations in cross-border contracting and some of the red flags to recognize when conducting due diligence.
- Key Contract Clauses: We’ll dig into some of the critical clauses that can limit risk around dispute resolution and contract interpretation.
- Contractual Scope: We’ll outline some of the risks that may arise from oral or informal arrangements, how US courts interpret conduct outside a written contract, and best practices for keeping all services within the contract scope.
- Relationship Changes: We’ll share guidance on navigating transitions and using contract provisions to anticipate evolving business needs.
Why This Matters
In today’s landscape of geopolitical uncertainty and rapid regulatory change, a well-negotiated, clearly-drafted contract is more critical than ever. Understanding and proactively addressing these US-focused issues is an essential risk management tool.
Stay tuned for upcoming posts, and please reach out with topics, questions, or experiences you’d like us to cover as part of this ongoing conversation.
For a collection of related previous posts and webinars, please click this link.
