Why Clear Contracts Are Non-Negotiable in Cross-Border Contracts

 

Cross-Border Contracts are Sweet, but contractual Protection matters.

In cross-border business, opportunities are often exciting, fast-moving, and high-value. However, without clear, well-documented agreements, these same opportunities can morph into complex disputes where recovery becomes difficult—if not impossible. At Kabbiz Legal & Advisory, we routinely review potential claims arising from loosely framed arrangements where one party is seeking to enforce obligations from the other party but their arrangements are loosely framed as to create ambiguity in the arrangement. The pattern is familiar: one party insists they are owed, while the other denies ever agreeing to pay and even denying the issue of payment or invoices entirely. And without proper documentation, the claim crumbles before it even reaches court as the claimant has nothing to hold on to anchor their claims, thus rendering enforceability either impossible or an uphill task to navigate.

The Role of Documentation in Enforceability of Cross-Border Contracts

Courts and partner law firms in international jurisdictions operate on one principle: what you can prove, not what you believe. It simply translates to: we can only work with what you can prove and not what you believe or think is the case. Proof comes from clear, contemporaneous agreements or at least clear correspondence between parties—not from assumptions, memory, or one-sided email trails usually from the part of the claimant in such enforceability claims.

We understand that emotions run high during negotiations and even value add, especially when the prospects of working on cross-border deals which can potentially pay well are on the table, beyond the initial adrenaline rush and push to get hands working on the deal, it is extremely important to set aside the initial adrenaline rush and strictly streamline a contract between the involved parties.

A solid cross-border contract should outline the following:

• Scope of services – what is being provided, by whom, and to what standard. This should be clear and leave no room for ambiguities especially when it comes to enforcement, as cases arise where only the claimant seems sure of the services they rendered while the counterparty denies same in very strong terms, disclaiming such services. If you fail to define your scope of services, it becomes difficult to prove, especially in cross-border transactions involving international contracting where parties do not have physical anchors for their work.
• Payment terms – the amount, timing, and method of payment. Leave nothing to oral discussions; such discussions should be followed with actionable invoices made out clearly to the counterparty defining payment sums, time, payment method.
• Jurisdiction – which court or arbitral body will have authority over disputes.
• Dispute resolution mechanisms – mediation, arbitration, or litigation clauses. Depending on what type of contract you are dealing with and the parties involved (in different jurisdictions), jurisdictional challenges may crop up. As such, choosing the seat of jurisdiction and applicable laws, alongside dispute resolution mechanisms/chains will save a lot of time should disputes arise.

Absent these, even a claim with moral weight can fail in law as Courts will not act purely on speculation and hearsay.

Why Vague Agreements Are a Risk Multiplier

When agreements are vague—or worse, never formalized—disputes tend to arise around multiple issues, including:

• Fee structures – Was it commission-based? Flat-rate? Deferred payment? Was payment even discussed? Was one party expecting payment when there were no stated deliverables in the engagement?
• Performance obligations – Did the service provider actually deliver? What are the key performance indicators that can be used to actually measure against what a claimant argues they delivered on?
• Jurisdictional uncertainty – Should the claim be heard in London, New Jersey, Lagos—or nowhere? When issues regarding conflict of laws arise, what happens then? How will parties sort this out?

Once these uncertainties surface, counterparties often dig in and deny liability. Litigation becomes expensive, time-consuming, and—crucially—unlikely to succeed. Why? The reason is simple: too much uncertainties delay justice or leads to no justice at all, as Courts cannot deliver favourable verdicts in a vacuum.

Cross-Border Matters Require Higher Standards

International disputes are not only harder to prove—they are costlier to pursue. Filing fees in London or New Jersey can run into thousands of dollars, and these fees sometimes require the intervention of litigation funders or insurance companies. Enforcement actions may require certified translations, notarized evidence, and partner counsel involvement from other jurisdictions. All these ultimately keep the fees jacked up, no matter the efforts made to keep them low.

Law firms, particularly those handling cross-border matters, are expected to assess viability before committing resources to cases, no matter whatever huge amounts a claimant claims they are entitled to. Without strong documentary proof, no reputable firm—or court—will greenlight proceedings. Doing so would be tantamount to speculative litigation, which carries professional and ethical risks as Courts are becoming increasingly hostile to such speculations and Bar Associations are ever ready to sanction counsel they consider to have erred in their professional duties.

What Proper Engagement Looks Like

A properly drafted cross-border contract framework should leave no room for doubt from any angle. At a minimum, it should include:

1. A Signed Agreement – clearly setting out scope, fees, timelines, and governing law. No matter how brief such a contract might be, what matters is that same covers all the necessary basics a claimant can anchor their claim to in case of arising disputes.
2. Acknowledgement of Obligations – from all parties involved, ideally via formal correspondence or executed contracts. The correspondence could be in the form of e-mail exchanges between the parties, letters on firm stationery, or correspondence delivered and exchanged electronically through electronic channels. What matters most is that the parties acknowledge their obligations to each other.
3. Fee Security – upfront retainer or escrow arrangement, especially for matters requiring cross-border enforcement. The reason is simple and not far-fetched: parties are usually situate at different parts of the world, and collecting on fees later down the line especially when the claimant is in the lesser financial position, might become an issue.
4. Confidentiality & Dispute Resolution – provisions that secure sensitive information and streamline resolution processes, especially if parties would prefer speedy arbitration proceedings over lenghthy court proceedings.

Such a framework not only protects the client but also gives legal counsel the confidence to invest time and resources in case claims/disputes arise out of such engagements. Without these, most reputable law firms would issue negative feedback on viability of claims and move on from the engagement as it would be both financially and reputationally risky for them to engage.

Lessons for Consultants, Service Providers & Businesses

1. Put It in Writing – No matter how promising an opportunity, confirm all key terms in writing before performing services. Even if parties do not issue and sign formal contracts, having parties’ obligations in writing leave room for little ambiguities. Like we say in legal circles: if it is not in writing, it did not happen.
2. Keep Records – Maintain clear correspondence showing acknowledgment and acceptance of your role, fees, and obligations. These records become important in case of future disputes or disagreements on obligations, fees and roles. Even when such frameworks are performed without hitches, we encourage parties to keep records for a certain period of time afterwards, as you may never know when you might need it.
3. Understand Jurisdictional Realities – Engage legal counsel early to structure agreements that hold weight in the jurisdictions where enforcement may be required. What applies to one jurisdiction may not apply to the other, and vice versa; it is important to research jurisdictions before putting pen to paper so you are sure of what you are up against.

Our Approach at Kabbiz Legal & Advisory

Our firm applies strict due diligence when reviewing potential cross-border debt recovery cases. We assess:

• Whether there is an enforceable contract. And, even if there is no signed agreement/contract ab initio, whether the circumstances of the case lend credence to the existence of an enforceable contract.
• Whether there are realistic prospects of recovery (including whether the debtor has assets that can be seized or enforced against in the jurisdiction where they are domiciled).

Where gaps exist, we guide clients on how to structure future agreements to avoid costly disputes. Prevention, in our experience, is far more effective than litigation after the fact.

Closing Thought

In cross-border business, clarity isn’t a luxury—it’s the cornerstone of enforceability. Without it, even the most persistent demands risk becoming unenforceable claims.

For businesses and consultants operating internationally, the takeaway is simple: secure your agreements from the start, and work with legal counsel who understand the commercial and jurisdictional complexities of global transactions. At Kabbiz Legal & Advisory, that is precisely what we do.

This article does not constitute legal advice. We encourage you to seek specialist guidance for your circumstances.

For guidance on the subject matter, you can contact us at contact@kabbizlegal.com or call +2348064231176.

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