An overseas company sent you a contract: what to check before signing

In brief

Before signing a contract with an overseas company, check who must do what, when payment is due, which rights you receive or transfer, how much you could lose if things go wrong, and how to end the relationship. Separately, check which country's law governs the contract and where disputes will be resolved. These questions matter whether you sell your product or buy services or software.

Start with the deal you actually agreed

You have agreed the price and deadlines, then receive a twenty-page contract in English. The title looks familiar and the figures match. But other sections may change the deal: payment only after approval with no deadline for a response, a transfer of rights in your entire product, or another year's fees even if you no longer need the service.

Start by describing the deal in your own words. What should happen? What will you receive? What must you do? Which terms are essential to you? Then check whether the document reflects that understanding.

The questions below concern business-to-business contracts for products, development and services. Legal examples are identified separately: a rule from one country cannot automatically be applied in another.

1 Which company are you dealing with, and what makes up the contract?

Check the company's full name, country of registration and registration number. Compare them with the official register and payment details. If one company signs but another must pay, establish and record how that will work. Also check who is signing and their authority to act for the company.

Collect all documents incorporated into the contract: the scope of work, prices, support terms and service rules. Open the links, save the agreed versions and check which document takes priority if they conflict.

Pay particular attention to any ability to change online terms without your agreement. Establish how you will be notified and whether you can stop using the service before new prices or rules take effect.

2 What must each party do?

The contract should make the expected result and the way to check it clear. Phrases such as “project support” or “integration development” leave too much unanswered.

Additional work needs a clear process: who approves it, how the price is set and when the deadline changes. This helps avoid a situation in which both parties sincerely regard the same task as either already paid for or an extra.

3 When is payment due, and what does it cover?

Find the event that triggers payment: signing, invoicing, completing a milestone or approving a result. Then check the payment period, currency, taxes and bank charges.

If you receive payment, look for terms that allow it to be postponed. Must your customer pay you if its own customer has not paid? Can it withhold the entire payment over a comment on a small part of the work?

If you are paying, check what happens to an advance if the project is delayed or cancelled. For a subscription, check automatic renewal, the deadline for opting out of the next period and any right to increase the price.

The draft contract

The customer pays after approving the result. But there is no review deadline or grounds for rejection.

What to agree

Acceptance criteria, a response period and a process for correcting issues.

If silence counts as approval

Both parties need to understand when that rule applies and how to raise a problem in time.

4 Which rights do you receive or transfer?

The development fee and rights in the result are connected but distinct questions. Check what the other party may do with the result: use it internally, modify it, pass it to customers or sell it as part of a product.

If you build a product for a customer: separate work created specifically for it from your existing code, tools and solutions used on other projects. Also check that you are not promising to assign rights in third-party libraries that can only be used on specified terms.

If you pay for development: establish whether you receive source code, can ask another team to make changes and can keep using the result when the engagement ends. A transfer of rights does not itself describe which files and access credentials must be handed over.

For example, under UK copyright law, payment for development does not itself transfer copyright. An assignment requires a written document signed by or on behalf of the copyright owner. The contract should therefore identify the rights passing to your company. UK Intellectual Property Office guidance; Copyright, Designs and Patents Act 1988, section 90(3).

Read more: who owns customer-funded software developments.

5 Who pays when something goes wrong, and how much?

Compare the possible consequences with the value of the deal. Which losses of the other party do you promise to cover? Is there an overall limit? Which claims fall outside it?

Read liability provisions together with promises about the product, its rights and data protection. If payments are limited to the service fees but a key risk is excluded from that limit, the cap may not protect you against that particular claim.

You may encounter the term indemnity. Check what triggers your obligation to cover another party's losses or costs, who handles the claim and who can approve a settlement. The clause's title does not answer those questions.

This also matters to a buyer. You may have a contract for a critical service but receive only a small discount on the next bill after a prolonged outage. Check whether other remedies are available and whether they meet your business needs.

The appropriate amount and exceptions depend on the deal. Their legal effect must be assessed under the applicable law.

6 How can you end the relationship, and what happens next?

Check whether you can end the contract early, how much notice is required and what it will cost. Separately, check what happens after a breach: is there time to fix it, and when can the other party terminate?

For a buyer, key points include unused advance payments, delivery of paid-for materials, data export and moving to another service. For a seller, they include payment for completed work, agreed expenses and how current tasks will be closed out.

Check how notices must be given. The contract may require a notice sent to a particular address. Record the relevant deadlines and addresses after signing, especially where renewal is automatic.

7 Which law applies, and where will disputes be resolved?

Find two separate provisions:

• The governing law. This matters to interpreting the contract and assessing the parties' rights and obligations.
• Who resolves disputes. This may be a court or arbitration before arbitrators chosen under the parties' agreed procedure.

Choice of law and choice of forum serve different purposes. This distinction is explained, for example, in the introduction to the Hague Principles on Choice of Law, paragraph I.7. The Principles are non-binding guidance; the applicable legal rules still need to be established.

For the business, the practical questions include the possible cost of a dispute, its language and where enforcement may be needed. The name of a familiar court or arbitration institution does not itself show that it suits your deal.

A contract written in English is not necessarily governed by the law of England and Wales. Find the relevant clause; if it is missing, the applicable law needs a separate assessment.

Which changes should you raise first?

After reviewing the contract, make a short list of terms that affect the decision to proceed. Prioritise those that could prevent you receiving payment or the required result, cost you important rights or expose you to excessive risk.

Explain the consequence of each proposed change and suggest specific wording or an approach. For example: “Without a deadline for reviewing the work, we cannot plan payment. We suggest agreeing a review period and a process for raising issues.” This is easier to assess than a general comment that a clause is “too risky”.

Before signing, compare the final version with all agreed changes and attachments. Afterwards, save the complete set and record payment, review and renewal opt-out dates in your calendar.

Common questions

Do I need a Russian translation of the entire contract?

A translation can help if you find it easier to read and discuss the document in Russian. The meaning and consequences of the obligations still need a separate review. If both language versions will be signed, agree which text prevails if they differ.

Can I sign electronically?

This depends on the applicable law and document type. In England and Wales, for example, an electronic signature can be used to execute a document if the signer intends to authenticate it and the necessary formalities are satisfied. Check the requirements for the particular document and the signer's authority before signing. Law Commission, Electronic execution of documents.

What if the company says its template cannot be changed?

Ask whether exceptions can be agreed in a schedule or statement of work, and which text would take priority. If changes really are unavailable, assess the remaining terms alongside the price, deal size and alternatives. Acceptable terms may differ between a pilot project and a contract on which the whole business depends.

If you sell a cloud subscription, read the separate guide to SaaS contracts with business customers: subscription scope, SLA, data and exit.

Need help with a contract?

I help assess proposed terms, prepare changes and agree them with the other party. I draft documents and negotiate in English and Russian.

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Sources

• UK Intellectual Property Office, Ownership of copyright works. Commissioned works: commissioning development does not itself transfer copyright; a right to use the work is distinct from ownership.
• Copyright, Designs and Patents Act 1988, section 90(3). Written form and signature requirements for an assignment of copyright.
• HCCH, Principles on Choice of Law in International Commercial Contracts. Introduction I.7–I.9: the distinction between governing law and dispute resolution, and the non-binding nature of the Principles.
• Law Commission, Electronic execution of documents. England and Wales: intention to authenticate and compliance with formalities when signing electronically.