It’s About the Process…

When Irish and Northern Irish companies ask if there is *one* thing they can or should do to minimize the risk of operating in the US, I channel my inner Mr. McGuire (from the movie The Graduate) and say ‘process.’ It’s not quite as pithy as ‘plastics,’ but it works. What I mean by that remark is this: adopting and consistently using a process for developing and executing US contracts will go a long way in terms of risk mitigation. Comprehensive, American-style contracts, and the process by which they are built, are the most powerful defenses in an Irish or Northern Irish company’s risk-avoidance arsenal.

More specifically, to mitigate the risk of US operations ‘visiting’ the Irish or Northern Irish parent, those companies should:

  • Implement Standard Terms and Conditions, including:
    • Choice of forum (picking the court in advance, or including carefully drafted arbitration clause);
    • Choice of law;
    • Required mediation / good faith conferral;
    • Waiver of jury trial (depending on jurisdiction);
    • Limitation of remedies (limiting consequential damages, including lost profits, and punitive damages);
    • Indemnification provision for suits arising from activity of counter-party;
    • No written modification of contract; and
    • Allocation of Attorney’s Fees in dispute.
  • Centralize final review of any contracts involving the US market.
  • Make clear to counter-party that the discussions are not final until final approval secured.
  • If Terms and Conditions are referenced in contract, make sure they are available (website) or supplied to the other party.
  • Resolve the “Battle of the Forms,” noting and addressing competing provisions in the other party’s terms and conditions.
  • Decide whether CISG (Convention on Contracts for the International Sale of Goods) should apply. If not, must include an explicit opt-out in the contract.
  • For ongoing business, consider a Master Agreement with controlling terms, under which individual purchase orders or statements of work will issue.