Upheaval of the Global Economic Order: Five Important Legal Tips to Diversify Your Markets

Looking to explore new markets? Here are five key legal tips you can implement now to successfully address this challenge:

1. Register Your Trademarks

Identify the most promising markets today, verify the availability of your trademarks and proceed with their registration in selected markets, while treating the associated costs as an investment rather than an expense. Mature markets like the European Union already have millions of registered trademarks, which will take priority over yours. This can help you avoid prosecution for infringement or even the seizure of your products. If one of your trademarks is not available, rebranding will require significant additional time and costs, which you should prepare for now. You should also note that these processes can take several months or even years, depending on the country.

2. Review Your Sales Documents

Review your terms and conditions to ensure they remain relevant in an international sales environment beyond the United States. For instance, it is important to move away from older U.S. incoterms such as “FOB factory” or?“FOB destination”?and adopt the Incoterms 2020 of the International Chamber of Commerce (ICC), which are now used globally. While Incoterms 2020 also include a “FOB”, it cannot be used for ground or intermodal shipping.

3. Beware of Incoterms DDP If You Are the Seller

As a seller, avoid accepting delivery terms with the Incoterms DDP, as you will be responsible for all customs duties and tariffs at the place of destination. The United States is not the only country that imposes tariffs; China is another example.

4. Choose Your Representatives and Distributors Carefully as it May be More Difficult to Terminate Their Contract

It is essential to review your contracts with manufacturing agents (independent sales representatives) and make informed decisions. Several jurisdictions have mandatory legal provisions that can pose significant challenges if you choose to terminate the contract. This is particularly true in the European Union, the United Kingdom and Brazil, and is also sometimes the case for distributors (for example, in Belgium or Turkey). In either scenario, extended notices of termination, penalties and other forms of compensation may apply. As such, it is crucial to adapt your contract templates to meet the specific requirements of these jurisdictions.

5. Review Your Force Majeure and Pricing Clauses

Currency fluctuations, tariffs and supply chain disruptions are now frequent and, therefore, predictable. That is why it is essential to take steps to protect yourself. For instance, your current contract templates may not allow you to raise prices, even if there is a substantial increase in the costs of raw materials and components, as well as their transportation and importation, particularly due to potential tariffs and their global consequences. These increases will also affect the resale price of your final product. Adaptability and agility are key to responding quickly and revising your contract templates when needed, thereby preventing your business from facing financial difficulties.

Our firm can assist you in the development and implementation of your global projects. We can also leverage the local expertise of affiliated firms within our international networks, providing comprehensive coverage and insights into local jurisdictions.