Obtaining funding is becoming increasingly difficult for enterprises due to the current crisis.
It is therefore clear that it really is a pleasant surprise when the funding reaches the company directly with a very attractive proposal and a simple contract.
It goes without saying that the above circumstances should set the first alarm bell ringing for a business that operates on an international level. However, even the most cunning entrepreneur is often led to fall for the idea of finally finding the adequate support to his business, especially if the proposal comes from an economically strong country and is accompanied by elements which lead to believe in its reliability.
The Firm has recently assisted a client in verifying the contents of a finance contract received from an American organization which declared itself to be both non profit and internationally renowned. The contract offered the advance payment of the production costs and of the costs relating to the shipping abroad of the materials used in the business of the company, withholding in return a percentage on the profits of each sales transaction.
The offer was presented as the response to a specific funding request that had been made, and already partly negotiated, by some members of the client company operating abroad, and was subject to the advance payment of a sum of money equal to the government fees necessary to cover the issuing of the funding.
Through the assistance of the Firm ‒which verified the content of the contractual clauses and became involved in the negotiations‒ it became immediately clear that the organization was likely attempting to have the company sign as soon as possible a contract involving a substantial advance payment without any safeguards.
It has once again emerged that the negotiation and the signing of an international finance contract, or of any other kind of agreement, is a complex matter, especially as it involves legal entities on whose solvency it is not always possible to obtain reliable and secure information.
A proper professional legal assistance -which in addition to the traditional legal scrutiny offers the possibility to obtain the above information outside the national territory- can hence affect considerably the commercial and legal consequences of such transactions, significantly reducing the economic risk and the possibilities of disputes outside the EU.
(Bologna Office –Valentina Saviotti – 0039 (0)51 2750020)
