In a globalized economy, cross-border trade has become an essential growth driver for Spanish companies. Whether entering new markets, sourcing from foreign suppliers, or establishing partnerships abroad, international contracts form the backbone of these relationships. However, drafting and negotiating such contracts in 2025 requires more than commercial acumen: it demands a deep understanding of private international law, compliance, and risk management. This article examines the key elements that Spanish companies should consider when negotiating and executing international contracts, highlighting current trends, legal challenges, and best practices to ensure security and predictability in an increasingly complex environment.
The Importance of Governing Law and Jurisdiction
One of the most critical aspects of any international contract is the selection of governing law and dispute resolution mechanisms. Poorly drafted clauses in this area can lead to prolonged and costly disputes.
Choice of Law: Clearly specify which jurisdiction’s laws will govern the contract. Spanish law may be appropriate in some cases, but there are scenarios where English law, Swiss law, or another neutral legal system is preferable.
Jurisdiction vs. Arbitration: Companies must decide whether disputes will be resolved before ordinary courts (and which ones) or through arbitration. In international contexts, arbitration is often preferred due to its neutrality, confidentiality, and enforceability of awards under the New York Convention.
Key Clauses in International Contracts
Certain clauses require special attention to protect a company’s interests: Payment Terms and Currency Risk
Clearly define payment schedules, currency, methods, and how exchange rate fluctuations will be handled.
Consider including mechanisms such as advance payments, letters of credit, or guarantees.
Force Majeure and Hardship
Modern clauses must address pandemics, cyber incidents, geopolitical risks, and disruptions in global supply chains.
Include provisions for renegotiating terms in case of severe changes in circumstances.
Intellectual Property and Confidentiality
Protect trade secrets, patents, and proprietary know-how by incorporating detailed confidentiality obligations.
Specify ownership and permitted uses of intellectual property developed jointly during the contract.
Termination and Penalties
Define clear conditions for termination, notice periods, and potential penalties or damages to avoid uncertainty.
Tools to Mitigate Risk in Cross-Border Transactions
Beyond contract clauses, companies should adopt complementary mechanisms to minimize exposure:
Incoterms: For contracts involving the international sale of goods, correctly using Incoterms clarifies responsibilities regarding transport, insurance, and customs.
Insurance: Policies covering political risk, credit risk, or non-payment can protect the company’s financial position.
Compliance with Export Controls and Sanctions: Ensure that your international transactions do not violate EU, U.S., or UN trade restrictions.
Digitalization and New Challenges
The rise of digital platforms, cloud services, and electronic contracting adds new dimensions to international contracts:
Electronic Signatures: Thanks to the eIDAS regulation, electronic signatures are valid across the EU, but it is important to confirm recognition in non-EU jurisdictions.
Cybersecurity: Contracts should include clauses addressing data protection and cybersecurity obligations, especially when sharing sensitive information or using cross-border cloud services.
AI and Data Use: Increasingly, commercial contracts must regulate the use of AI tools and large datasets, clarifying issues such as liability and intellectual property.
The Strategic Role of Legal Counsel
In 2025, international contracting is not just a legal process: it is a strategic exercise that can directly affect a company’s profitability and long-term relationships. Working with experienced legal advisors allows companies to:
Identify potential risks before entering new markets.
Negotiate balanced terms that protect their commercial and financial interests.
Stay up-to-date on changes in international trade law, sanctions, and digital regulations.
International contracts are the legal backbone of global business. For Spanish companies, the key to success in 2025 lies in anticipation, clarity, and professional advice. By carefully negotiating terms, understanding the legal implications of cross-border dealings, and relying on specialized counsel, businesses can reduce risk, ensure compliance, and seize opportunities in an increasingly interconnected world. At Dr. Frühbeck Abogados, we assist companies at every stage of the contracting process – from drafting and negotiation to risk assessment and dispute resolution – helping them expand internationally with confidence.