Demystifying international healthcare contracting

Distribution agreement: this is an agreement between a supplier of goods and a distributor, where the distributor agrees to sell the supplier's products in a specific territory.

Agency agreement: this is an agreement between a company and an agent, where the agent agrees to act on behalf of the principal in a specific territory to generate business and sales for a fee.

A non-disclosure agreement or NDA, also known as a Confidentiality Agreement is a legal contract between at least 2 parties that outlines that the parties wish to share confidential information but with restricted access to that information.

The parties agree not to disclose any information covered by the agreement and the contract creates a confidential relationship between the parties to protect confidential or proprietary information or trade secrets.

These are a very common first step in international contracting and it is a good idea to have a template document which you are comfortable with which you can suggest using when entering into early stage discussion (or at least cross check where the other party wishes to use their form of NDA).

A heads of terms or HoT is an agreement in principle between two parties but which is subject to a formal contract. It sets out the key commercial principles which the parties have discussed during their negotiations and which they intend will form the basis of a future, more detailed contract.

Whilst heads of terms evidence serious intent and have moral force, they do not normally legally compel the parties to conclude the deal on those terms (or at all). But they can be a useful first step to document the key principles of an agreement and be used when drafting the legal agreement to put things in place.

A MOU is a document that describes the broad outlines of an agreement that two or more parties have reached. It communicates the mutually accepted expectations of the parties involved in a negotiation.

It will not necessarily be legally binding (unless expressed to be so and often certain terms are expressed to be legally binding e.g. confidentiality, anything to do with payment, governing law/jurisdiction). It signals that a binding contract is imminent.

MOUs are often used when contracting internationally to document the first stage of discussions and express an agreement to proceed, indicating that the parties have reached an understanding and are moving forwards.

This type of agreement would be used where an organisation is providing its services/ expertise/training/knowledge to another.

A services agreement may also be called a partnership or collaboration agreement, but often this type of agreement denotes more of a partnership arrangement where both parties to the agreement are contributing and gaining advantage from each other and the joint working (for example maybe relating to research and development activities).

This type of agreement would be used where an organisation is selling its products or goods to another.

This is an agreement where one person or organisation, the licensor, grants another, the licensee, the right to use its intellectual property.

This is an agreement where the one person or organisation, the franchisor, grants another, the franchisee, the right to use its business model, trademarks, and other intellectual property to operate a business in a different territory.

When considering international contracting, it is important to determine which countries you want to work in and whether there are any ethical considerations to keep in mind. For example, some countries may have different laws and regulations related to employment practices, environmental protection, and human rights. It is important to consider the values of your business and keeping aligned to those.

Consideration should also be given to the political and economic stability of the country where the other party is located. This may include assessing the risk of political instability, currency fluctuations, and economic downturns and should include a search of international sanctions lists.

You should consider the language and cultural differences of the other party. This may require translation services or cultural training to ensure effective communication and understanding. It will often also mean face to face time on the ground.

The laws and regulations of the country you are working with need to be understood and the contract will need to comply with those. This may include regulations related to healthcare, data protection, and privacy.

Payment terms and currency of the contract will be key issues. This may include understanding foreign exchange risks and the need for international banking services. Are there withholding taxes? How easy is it to get money out of the country? Are the expenses covered within the contract fee or in addition?

You will want to ensure that your intellectual property rights are protected in the country where the other party is located. This may require registration of trademarks, patents, and copyrights and ensuring that the contract has strong and clear IPR clauses.

Protection of personal data will need to be ensured and in line with the relevant data protection laws. This includes ensuring that any personal data is collected, processed, and stored in a secure and lawful manner. In this context we will also need to be aware of any cross-border data transfer restrictions that may apply. Some countries have strict rules around the transfer of personal data outside of their borders, so it is important to ensure that any transfers comply with these rules.

You would need to ensure that any third-party service providers that you use to process personal data are also compliant with relevant data protection laws. This includes ensuring that they have appropriate security measures in place to protect personal data and finally you will need to sure appropriate data protection policies and procedures are in place to ensure compliance with relevant data protection laws. This includes having a clear data protection policy, providing training to staff on data protection issues, and regularly reviewing and updating your policies and procedures to ensure ongoing compliance.

You will need to consider the insurance and liability issues related to the contract. This will likely include obtaining additional and appropriate insurance coverage and limiting your maximum liability in the contract to the extent possible.

It is prudent to conduct some due diligence on the other party to ensure that it is reputable and financially stable. This may include reviewing financial statements, credit reports, and references and asking for various checks to be done on your counterparty to flag any issues of concern.

When entering into international contracts, it is important to consider the governing law and jurisdiction of the agreement. This determines which country’s laws will apply to the agreement and where any disputes will be resolved. Your starting point will always be that you want the laws and courts of the country you are based in. (Whilst acknowledging in the contract that you will of course comply with the law and regulations of the country you are providing goods/services to).

Consider your preferred method of dispute resolution in case of any disputes. This may include an internal escalation procedure within the parties’ own organisations initially followed by mediation or international arbitration or litigation. You will want to try and ensure that any litigation would take place in your own country rather than that of the other contracting party’s.