Terms of trade for doing business with America How to set them up to protect your business in international trade

21.4.2026 | ARROWS law firm

Trading with the USA offers Czech companies significant opportunities, but also legal differences. The American legal system (common law) differs from the Czech (civil law) system by placing emphasis on a strict written contract—what is not expressly stated does not legally exist. This article explains how to properly set up terms and conditions to avoid pitfalls and financial losses in international trade with the USA.

In the image, we see a specialist discussing the topic of setting up terms and conditions for the U.S. market.

Why US and Czech commercial contracts must not be mixed up
Commercial terms (Incoterms): What Czech companies overlook
Payment terms: How to protect yourself against non-payment
Dispute resolution: Arbitration versus US courts
How to trade safely with the United States: strategies to minimise risk
Final summary

US law (common law) operates differently from the Czech continental system: a contract is usually treated as the absolute law between the parties, and anything not expressly stated in it legally does not exist – oral promises and emails after signing carry limited or no legal weight.
The biggest risk is the absence of detailed commercial terms (e.g., Incoterms, payment terms, limitation of liability for damages, dispute resolution), which can lead to significant financial losses or a legal defeat with no chance of effective enforcement of rights.
Czech companies often underestimate key clauses such as "Entire Agreement", "Limitation of Liability" and "Force Majeure"—if these are missing from a US contract, US courts will not be helpful, even though similar situations in the Czech Republic could be resolved more favourably thanks to statutory provisions under Czech law.
From 2026, conditions in US trade policy may tighten significantly due to new objectives (e.g., speculative 15% tariffs on imports from the EU, new investigations under Section 301) – old business models are ceasing to work and companies must urgently update their contracts with potential changes in mind.

Why US and Czech commercial contracts must not be mixed up

When a Czech company takes a US contract template and signs it without modifications, it usually does not realise it, but it may be depriving itself of a range of protections that would otherwise be guaranteed by the Czech legal system.

In the Czech Republic, a continental legal system applies. This means that the Czech Civil Code contains a number of default provisions that apply unless the parties agree otherwise in the contract.

It also contains mandatory provisions that cannot be contractually excluded, and within the limits of these rules it automatically provides a range of rights and obligations. If your counterparty acts contrary to the basic principles of good faith or fair dealing, Czech courts can take this into account.

Even if you forget something important in the contract, Czech law often addresses it for you through its default rules. When the contract is governed by US law or performance is tied to the US market, it is usually safer to assume you will need to negotiate and draft every key term explicitly—an approach covered in ARROWS’ International Law practice. If a commercial agent verbally promises you exclusivity for your country and later excuses themselves by saying it is not in the written contract, Czech courts may, in some cases, recognise that such a promise carried weight—especially if the oral agreement was confirmed by the parties’ subsequent conduct.

In the United States, it works in exactly the opposite way. US law is built on the common law principle, which means that the contract is absolute between the parties and represents the only binding source of rights and obligations.

If something is not expressly stated in it, it practically does not exist. This is a consequence of the principle known as the "Parol Evidence Rule"—what is not in the written contract cannot later be enforced before a US court by claiming that "we agreed on it verbally" or "it was in an email before signing".

If the contract does not expressly include an agreed discount and you sign it with an "Entire Agreement" clause, your promise of a discount will be ignored and you are at a legal disadvantage. Your promise of a discount will be ignored. For a practical checklist of clauses that commonly fail in cross-border deals, see How to Prepare a Company for Sale: Legal and Tax Issues That Most Often Derail the Entire Transaction.

The attorneys at ARROWS, a Prague-based law firm, repeatedly encounter Czech businesses that have lost substantial funds by signing contracts that weakened their negotiating position. This is not a coincidence, but an understandable clash of two different legal cultures.

Legal differences that matter in practice

Oral promises versus written text

In the Czech Republic, rights and obligations can be based on oral agreements or even established business practice. If you have traded with a partner for decades and always followed a certain rule, Czech law may recognise it. If the partner then breaches this "informal" rule, the court may grant you relief.

In the United States, once you sign a contract with an "Entire Agreement" clause, all prior emails, calls and oral promises are legally irrelevant and you must rely solely on the written document. This is a direct consequence of the "Parol Evidence Rule". If a dispute arises over what was (or was not) included in the written agreement, the procedural strategy and evidence handling typically falls under Commercial Litigation & Arbitration in the Czech Republic.

A practical example: A Czech engineering company manufactures components for a US manufacturer. During negotiations, the American’s sales director says: "We will give you a 5% discount on the price if you supply us with at least 500 units per month." They shake hands, confirm it by email, and start doing business.

If the contract contains an "Entire Agreement" clause and the discount is not expressly stated, a US court will not consider it legally enforceable. If not, the promise of a discount will not be legally enforceable. Relatedly, the moment when negotiations or an order crosses the line into a binding agreement is discussed in When an Order Becomes a Contract: Legal Distinctions and Practical Risks.

"Consideration" – consideration in a US contract

US law includes a mandatory element referred to as "consideration". This means that for a contract to be valid, both parties must give something and receive something; there must be a mutual exchange of value. If one party gives something to the other free of charge (for example, promises a gift), the contract may not be legally valid in the United States as a contractual obligation because "consideration" is missing.

In the Czech Republic, you can enter into a gift agreement or agree on a unilateral obligation, for which Czech law provides a solution.

In the United States, without "consideration" you are lost. If you promised something for free and later believe the situation has changed, a US lawyer will explain why the contract is invalid or why you became bound without your counterparty being bound as well.

Key US clauses that Czech companies often underestimate

"Entire Agreement" – the contract is the law

This clause appears in virtually all US contracts. It usually reads as follows: "This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, representations, or agreements, either written or oral."

Once you sign the "Entire Agreement" clause, prior emails, oral promises and presentations are legally irrelevant and a US court will follow only the content of the written contract.

US courts are consistent in this—they apply the "Four Corners Rule", meaning "everything you need to know is within the four corners of this document".

If they promised you "best effort support" (maximum effort in technical support) in an email, but it is not in the contract itself with an "Entire Agreement" clause, then under US law that support does not exist as an enforceable obligation. You can argue about what the words "best effort" mean, but the court will object that you should have put it in the contract.

The attorneys at ARROWS, a Prague-based law firm, systematically review every US contract and identify "hidden traps" to ensure the Czech company is protected. They always point out what is missing and what should be added to protect the Czech company.

"Limitation of Liability" – limitation of liability

In the Czech Republic, you are entitled to compensation for actual damages and lost profit. If a counterparty breaches a contract and causes you a significant loss, you can sue them for that amount. Limiting liability is possible in B2B relationships under Czech law, but with certain restrictions—for example, liability for intentionally caused damage or damage caused by gross negligence cannot be fully excluded, nor can liability for personal injury be limited.

In the United States, limitation of liability (Limitation of Liability) is common and expected, and contracts almost always limit liability to a certain type of damage or an amount. US contracts almost always include a clause that says: "Neither party shall be liable for any indirect, incidental, consequential, or punitive damages." Or: "Liability of either party shall not exceed the amount paid in the preceding 12 months."

This means that even if the counterparty causes enormous damage, their liability is automatically limited to a certain amount or type of damage. For example: if you have an annual contract for USD 100,000 and the counterparty breaches it in a way that causes you USD 5 million in damages, their liability may be “capped” at the USD 100,000 you paid per year.

In the US, limitations of liability typically do not apply to fraud, gross negligence, or wilful misconduct, which creates room for legal disputes over how these terms are defined. But that, too, creates a legal battleground—how exactly are “gross negligence” and “wilful misconduct” defined in the specific context?

The attorneys at ARROWS know US practice and understand how to draft limitation of liability clauses so that they protect your business against excessive claims. At the same time, they aim to ensure the clauses do not unreasonably limit liability for ordinary mistakes.

"Force Majeure" – force majeure

In the Czech Republic, you are protected by the concept of an “insurmountable obstacle” (force majeure), as regulated by the Czech Civil Code. If something entirely beyond your control happens—war, an earthquake, a pandemic, an embargo—and you cannot perform your obligation, the court will usually understand and will not impose sanctions, provided the obstacle was beyond your control and makes performance unreasonably burdensome.

In the United States, “Force Majeure” is not automatically provided by law; if you do not have this clause in the contract, a US court will not excuse you from performance and you will have to perform or pay damages. It is not presumed automatically and is purely a matter of contractual agreement.

Practical example: A Czech company undertakes to deliver goods within three months. In the second month, war breaks out and transport becomes impossible. The Czech company writes to the American: “War! We can’t supply you!” The US counterparty replies: “I don’t care, you have an obligation under our contract. If you don’t deliver, you will pay me USD 500,000 as a contractual penalty for non-delivery.”

Without a Force Majeure clause with an explicit reference to an event such as war, a US court will not help you and you will be required to pay.

This is why, in US contracts, it is critical to have a precisely drafted Force Majeure clause. It should list specific situations (war, natural disasters, pandemics, embargoes, material changes in the regulatory environment) and state what impact they have on the performance of contractual obligations. Without this, you are left without reliable protection.

Commercial terms (Incoterms): What Czech companies overlook

Incoterms are international commercial terms issued by the International Chamber of Commerce (ICC). They clearly determine who is responsible for transport, insurance, customs duties, and other costs in international trade. In the United States, Incoterms are relied on primarily in sea and air transport, as in most of the world.

The problem: Many Czech companies are not aware of Incoterms or use them incorrectly. It is crucial that Incoterms are expressly stated in the sales contract, including the version (e.g., Incoterms 2020), otherwise disputes over interpretation may arise.

EXW (Ex Works – ex works)

This means the buyer picks up the goods at your warehouse or another agreed location and from that moment bears all risks and costs associated with transport. You (the seller) have minimal responsibility—only for making the goods available for collection.

Suitable for: Small orders, a buyer who wants full control over transport, or where the buyer is located nearby.

Not suitable for: US counterparties if you do not want the risk of complaints about damage to the goods in transit, for which the buyer is responsible but may still challenge. Even though the risk is on the buyer, in the US this often means the American customer will demand a refund, claiming you delivered defective goods because you did not secure them for transport.

FCA (Free Carrier – delivered to the carrier)

You hand over the goods to the first carrier (for example, a road haulier or an aircraft) at the agreed place, and from that moment the buyer bears the risks and costs. You pay for transport to the agreed place of delivery (which is usually arranged by the buyer), but not the main leg of transport to the United States.

Suitable for: Sales to the United States if you want less responsibility than under FOB, but still retain control over the goods until they are handed over to the first carrier.

Risk: If the goods are damaged in transit (for which the buyer is already responsible), a dispute may arise as to who is liable if the transport terms were not clearly specified or the buyer failed to arrange insurance.

FOB (Free On Board – delivered on board the vessel)

Used exclusively for maritime and inland waterway transport. You pay for the transport of the goods up to the ship’s deck at the agreed port of shipment. Once the goods pass the ship’s rail, all risks and costs (including loading costs) transfer to the buyer.

Suitable for: Ensures a clear allocation of responsibility in sea transport. The moment the goods pass the ship’s rail, it becomes the buyer’s problem.

Not suitable for: If you do not want to deal with sea transport all the way to the port. If you have issues with the transport (your goods fall off the deck and sink) before crossing the ship’s rail, you are responsible. For container transport, FCA is generally recommended instead.

CIF (Cost, Insurance and Freight – costs, insurance and freight)

Also used exclusively for maritime and inland waterway transport. You pay for the transport and insurance of the goods up to the agreed port of destination in the USA. The buyer pays you the price for the goods plus CIF. However, the risk of loss or damage to the goods transfers to the buyer already at the moment the goods pass the ship’s rail at the port of shipment, even though you have still been paying the insurance for them up to the port of destination.

Suitable for: When you want to arrange transport and insurance, but want it to be clear that from a certain point the risk lies with the buyer.

Most common mistake made by Czech companies: Not knowing which Incoterm to choose, or misinterpreting them, and then being surprised in litigation when the debate starts about who was supposed to insure the goods and who is liable for loss during transport.

Attorneys from ARROWS advokátní kancelář often see that a Czech company never discussed with an American which Incoterm they would use, and then, in a dispute, they find out that their US partner believed something completely different. This leads to legal disputes that could easily be avoided through a simple and clear agreement from the outset.

Payment terms: How to protect yourself against non-payment

A documentary letter of credit (Letter of Credit – L/C) is a banking instrument where a bank (usually a US bank) issues a guarantee that it will pay the seller. The Czech company delivers the goods, submits the documents to the bank, and the bank pays from the US partner’s account once all L/C conditions have been met.

Advantage: You have a high level of payment certainty if you meet the L/C conditions. The bank will pay you if you submit the correct documents—regardless of what the US customer is dealing with in relation to the US bank or the goods.

Disadvantage: It is expensive. Banks charge fees (typically 0.5–1.5% of the amount, but it can be more depending on complexity and risk). In addition, you must meet all L/C conditions precisely—even a small discrepancy in the documents may lead the bank to refuse payment.

Suitable for: Large orders, new business partners, or where the US partner is financially uncertain or has a poor credit history.

Documentary collection (Documentary Collection): Instead of a bank guarantee, banks act only as intermediaries for the exchange of documents and payment.

You send the documents (e.g., the bill of lading) through your bank to the US partner’s bank. The US partner pays its bank, which then releases the documents and sends the funds to your bank.

Suitable for: Second or third orders from a partner, where you already trust each other more, but you want certainty that the US partner will pay before the documents for collecting the goods are handed over.

Advance payment (Advance Payment): The US partner sends you the money before you ship the goods. This is the safest option for you (the seller), but the least safe for the buyer.

Problem: Very few US companies will accept this, because they fear that the Czech company will take the money and never ship the goods. In US business practice, it is traditionally expected that the buyer has a certain degree of control or protection.

Open account payment (Open Account): The Czech company delivers the goods and the invoice, and the US partner pays later, usually within the agreed period (e.g., 30, 60, or 90 days). This is the most common model in the USA for established partners—companies trust each other or agree it contractually.

Risk: You have very little protection. If the US partner does not pay, you must sue them in the USA—which is expensive and time-consuming. The lack of security is greatest here.

Important: Regardless of which payment term you choose, it must be stated clearly and precisely in the purchase agreement. If you rely on “but I said I wanted a three-day payment deadline,” the US partner can respond: “That’s not in the contract, so I don’t recognise it.”

Questions on unpaid invoices:

1. How do you protect yourself in the USA against a situation where a US partner buys goods, but then the delay in paying the invoice lasts, say, 6 months? You must put it in the contract: “Payment is due within [e.g., 30] days of invoice date. If payment is not received by that date, interest accrues at [e.g., 1.5%] per month on the outstanding balance.” Without this, the US partner will often “forget” to pay on time. Attorneys from ARROWS advokátní kancelář advise that the contract should also include a contractual penalty for delays—either in the form of default interest or explicit “Liquidated Damages” for each day of delay (if the amount is not excessive, a US court will uphold it).

2. Why does a Czech company not receive the money when it thinks it “agreed” a 30-day term with an American? Because it is not in a written contract. Regardless of what you think you agreed, US law and US business practice are governed primarily by what is recorded in writing and signed. If the purchase agreement contains the sentence “Payment Terms: Net 30,” but the US partner never signed it or “forgot” to enter it into their system, their accounting department may pay after 90 days and, legally, it may be defensible for them.

3. What is the difference between “Liquidated Damages” and a Czech “contractual penalty”? A contractual penalty in the Czech Republic is generally automatically enforceable if agreed in the contract. “Liquidated Damages” in the USA must be a “reasonable estimate of actual loss”—it must not be too high or serve as a punishment. Attorneys from ARROWS advokátní kancelář know how to set amounts so that they are recognised by US courts while still being high enough to motivate the US partner to pay on time.

US export controls and sanctions: Pitfalls that come as a surprise

If you sell something to the USA or to a US partner, you must be aware that US export controls are very strict and have extraterritorial reach. They apply not only to US entities, but, under certain conditions, also to foreign companies that trade in US products, technologies, or services.

OFAC – Office of Foreign Assets Control

OFAC administers US sanctions against countries, businesses, and individuals. If you trade with a sanctioned state (for example, Russia, Iran, North Korea) or with individuals/companies on OFAC sanctions lists (e.g., the Specially Designated Nationals and Blocked Persons List – SDN List), you will violate US law. The risk increases if the transaction involves US dollars, US banks, or US products or technologies.

The consequences of violating US law include high fines (in the hundreds of thousands to millions of dollars per violation), loss of the ability to import from the USA, and potentially criminal prosecution of key individuals.

Attorneys from ARROWS advokátní kancelář, the network of partners ARROWS International, can help verify whether your products are subject to US export controls, which is critical for protection against legal issues. This is critical to avoid unexpected legal problems and to protect against enormous fines.

ITAR and EAR – export controls for military goods and technologies

If you export or distribute “defense articles” (military goods), “defense services” (services related to the defense industry) under ITAR (International Traffic in Arms Regulations) or “dual-use items” (items that can be used both for civilian and military purposes) under EAR (Export Administration Regulations), you must obtain a licence for them from the relevant US authorities, even if you are a Czech company.

Example: If you sell software that includes advanced encryption (“encryption”) or data processing, it may be classified as “subject to export control” under EAR. The same applies to certain manufacturing technologies or machine components.

Consequences: If you export without a licence, you face fines of up to USD 1 million per violation and potentially a ban on doing business with US entities or US technologies.

A Czech IT company selling software with technology subject to EAR may become involved in an investigation even if it did not intend to breach the rules, if a US partner resells the software to a restricted country. In these areas, US law has “extraterritorial” reach—it applies even outside the territory of the USA.

New US trade policy from 2026: Changes that will affect your contract

From 2026, US trade policy may change dramatically in response to global economic and geopolitical trends. Hypothetically, new tariffs (e.g., 15% on imports from the EU), new investigations under Section 301 of the Trade Act, and a general effort to “improve” the US trade position could mean that existing contracts and business models stop working without adjustments.

Hypothetical new 15% tariffs on imports from the EU

Let us assume that in February 2026 it is decided that imports of selected categories of goods from the EU into the USA will be subject to a 15% tariff. This would mean that all your prices calculated without taking this tariff into account would become unprofitable. The US partner would logically push you to reduce the price.

What this means in practice (hypothetically): If you sold goods for USD 100 without a tariff, the US partner would now receive an invoice for USD 115 (100 + 15% tariff). The US partner would argue: “That’s expensive! You have to lower the price!” Without a “price adjustment clause” in the contract addressing what happens if tariffs or taxes change, you would be under strong pressure. Either you would reduce the price and lose your margin, or you would argue with the partner about who bears the tariff risk.

Hypothetical new Section 301 investigations focused on “overcapacity”

Let us assume that the USTR (Office of the United States Trade Representative) launched new investigations under Section 301 of the Trade Act against the EU, China, and other countries in March 2026, focused on “excess production capacity” in certain sectors.

This would mean that the US government and US companies would put pressure on introducing additional tariffs or import restrictions from the EU to “protect” US workers and domestic industry. If you sell industrial goods, machinery, chemicals, or automotive parts to America, you could be directly in the crosshairs of these measures.

Hypothetical changes in supply chains

Given potential new tariffs and uncertainty, US companies might try to “diversify” their suppliers outside the USA and the EU. This would mean that a Czech company that has so far been the “main supplier” could suddenly become a “second choice” or a “backup supplier”. Order volumes could drop dramatically.

What this means in practice (hypothetically): You have a contract for 1 million units per year. The US partner suddenly wants “flexibility”—the option to order only 500,000 units because it wants to rely more on suppliers from Mexico or Vietnam. Without a “minimum purchase commitment” in the contract, this would cost you half your profit. With this clause (if you had it and negotiated it), the US partner would have to reserve at least a certain volume or pay a penalty for non-compliance.

Dispute resolution: Arbitration versus US courts

If you end up in a dispute with a US partner, you have several options. Each has different costs, timeframes, and risks.

Litigation in the USA

If you have a dispute, the US partner may sue you in the USA. Or you may sue them. Typically, the dispute is heard in the state specified in the “forum selection clause” in the contract—most often New York, Delaware, California, or where the US partner is based.

The time required for litigation in the USA is 2–5 years and costs are in the tens to hundreds of thousands of dollars in legal fees.

Risk: US litigation is highly formal, lengthy, and expensive. It also includes “discovery” (extensive evidence gathering), where the US partner may request all your emails, messages, and documents, which can lead to the disclosure of additional issues.

Arbitration

Two parties choose an arbitrator (usually a lawyer or a panel of lawyers) and submit their dispute to them. The arbitrator decides, and the decision is binding and usually final.

Arbitration is faster (6–18 months) and usually cheaper (USD 30,000–200,000+) than litigation. However, it depends on complexity and on the choice of arbitral institution and rules.

Advantage: Arbitration is private (you do not have to worry about publicity), faster, and the arbitrator can choose which law to apply (e.g., the UNCITRAL Model Law or the CISG). Arbitral awards are also easier to enforce internationally.

The disadvantage of arbitration is that it does not provide the same appeal options as court proceedings and usually does not allow extensive evidence gathering (“discovery”).

Mediation

A neutral person (a mediator) tries to help the two parties reach an agreement. The mediator does not decide—only facilitates the discussion and helps the parties find a compromise. If you reach an agreement, it is very effective.

Mediation is faster (weeks to months) and cheaper than arbitration or court proceedings, and it represents a non-binding attempt to reach an agreement without risk.

The attorneys at ARROWS, a Prague-based law firm, recommend that the contract include an “escalation clause” (an escalation clause) defining the dispute-resolution process from negotiations through to arbitration, which is the smartest way to structure it. Only then should the matter proceed to arbitration.

How to trade safely with the United States: strategies to minimize risk

Understandably—you want to do business with the USA, but safely. Here is an overview of strategies on how to do it:

Strategy 1: Maximum contractual protection

Put everything into the contract: payment terms, Incoterms, Force Majeure, Limitation of Liability, an arbitration clause, which law will apply, dispute-resolution mechanisms, etc. Being detailed is not a sign of “distrust”—it is standard in U.S. business and a sign of professionalism.

Advantage: You will be protected even if a dispute arises with your partner, because everything will be clearly agreed in advance.

Disadvantage: The partner may label the contract as “too legalistic” and will want to “simplify” it. You will have to negotiate, but with the support of an experienced attorney.

The attorneys at ARROWS, a Prague-based law firm, will prepare a “first draft” of the contract that is detailed, professional, and “fair,” without the U.S. partner rejecting it at first glance.

Strategy 2: Risk insurance

Purchase “trade credit insurance”—insurance against non-payment by your U.S. partner. Also consider “product liability insurance”—insurance in case your product causes damage in the United States.

Advantage: If something happens, the insurer will pay you, which minimizes your financial risk; however, insurance costs money, which is an investment in your security.

The attorneys at ARROWS, a Prague-based law firm, work with insurers and will advise you on which insurance is most suitable for your specific situation and business model.

Strategy 3: Gradual scaling of business and due diligence

Start with a smaller order, carefully vet the U.S. partner (its creditworthiness, any litigation, reputation, financial standing, etc.), and only then increase the volume of cooperation.

Advantage: You reduce risk in the initial phase and gain valuable experience.

Disadvantage: The partner may think you do not trust them and consider another supplier.

The attorneys at ARROWS, a Prague-based law firm, can carry out in-depth due diligence of the U.S. partner, verifying its financial stability, legal disputes, or presence on sanctions lists.

Final summary

Doing business with America is not dangerous in itself—but without proper preparation of commercial terms and legal safeguards, it is like playing roulette. The U.S. legal system, unlike the Czech legal system, does not recognize “good faith” as an emergency brake if the contractual text is clear. The contract is absolute between the parties. Anything that is not in the written document does not legally exist or is only very difficult to enforce.

Typical mistakes made by Czech companies include underestimating the Entire Agreement clause, setting Incoterms incorrectly, and the absence of a Force Majeure clause, which leads to legal problems.

All of these mistakes are cheaper to prevent than to fix; the simplest step is to contact an attorney at ARROWS, a Prague-based law firm, who understands the issues and will protect your company. ARROWS attorneys are thoroughly familiar with this area and know how to set up a contract so that it protects your company while still being “fair” and acceptable to a U.S. partner.

Without proper legal safeguards, the costs of delays, disputes, and legal defeat can be a thousand times higher, which is why it is smarter to address this with ARROWS, a Prague-based law firm, in advance rather than dealing with it in a courtroom. Contact us at office@arws.cz and we will help you set up commercial terms that protect you.

Most common questions about U.S. contracts:

1. What happens if I sign a U.S. contract without a lawyer and later find out it contains unfavorable terms? You have very few options. Under U.S. law (common law), you are responsible for your signature and for reading the contract carefully. If there is no legally recognized reason such as “fraud,” “duress,” or “impossibility”—where the obligations became legally impossible to perform—the court generally will not help you. The attorneys at ARROWS, a Prague-based law firm, will help you identify whether your situation has any legal avenue, but the easiest solution is to be cautious and have a lawyer before you sign the contract.

2. If I am a small Czech company and the U.S. partner is a large corporation, can I negotiate anything in the terms at all, or will they just use their “standard terms”? You have more options than you think. Large U.S. companies usually have “standard terms,” but if you are an important supplier with a unique product or service, they are often willing to negotiate. The attorneys at ARROWS, a Prague-based law firm, know tactics for negotiating effectively—for example, let the partner see that you have noticed risks in their contract, or propose a mutual Force Majeure clause, not one-sided. You can also refer to “standards of the industry”—“this is common in U.S. business; let’s add it.” The result is often small but key changes that protect you without making the partner feel “pressured.”

3. How much does it cost to have ARROWS, a Prague-based law firm, review a U.S. contract that I am about to sign? The price varies depending on the scope and complexity of the contract. A simple review (reading, identifying the main issues and risks) is usually in the range of thousands to tens of thousands of Czech crowns. A more detailed legal opinion with specific recommendations and proposed amendments is more expensive. However, compared to the risk and potential costs that a bad contract could cause (in the hundreds of thousands to millions of Czech crowns), the investment in a legal review is negligible. Contact office@arws.cz and you will receive a specific fee quote based on your situation.

4. Can I take certain clauses from a U.S. contract template and add them to my own contract with Czech partners? Yes, but with caution. Some U.S. clauses make sense under Czech law and can be useful to strengthen your contractual position. Others do not, or they require careful adaptation. For example, an “Entire Agreement” clause can be drafted in the Czech Republic, but it will not have the same absolute force as in the United States. “Limitation of Liability” in the Czech Republic must be set carefully and in compliance with mandatory provisions of the Czech Civil Code so that Czech courts do not declare it invalid. The attorneys at ARROWS, a Prague-based law firm, will help you adapt U.S. “best practices” to a Czech contract so that it is legally safe and locally relevant.

5. If I believe that a U.S. partner has breached a U.S. contract, should I sue immediately or speak with the partner first? You should speak with them first and document all communication. Litigation should always be a last resort. The correct approach: 1. Send a formal notice (a “notice letter”) – a letter from an attorney that notifies the U.S. partner of the breach and sets a deadline to remedy it. 2. If the partner does not remedy the breach, contact a mediator or arbitrator, if the contract allows it. 3. Only then consider filing a lawsuit. The attorneys at ARROWS advokátní kancelář can help you draft the formal notice and structure your claim so that it is legally “clean” and has a chance of success.

6. Is it true that “in America business is done without contracts” and people rely only on trust? That is a myth. Yes, some smaller companies may do business on a “handshake” – but when a problem arises, they are lost without a contract. Large companies in the U.S. always have contracts – and they are usually very detailed. “Trust” is nice, but legal certainty is better and more professional. The attorneys at ARROWS advokátní kancelář advise: always have a contract, even if you trust your partner. A contract is not about distrust – it is about clarity, risk minimization, and predictability of legal relationships.

Notice: The information contained in this article is of a general informational nature only and is intended to provide basic guidance on the topic based on the legal situation as of 2026. Although we take the utmost care to ensure accuracy, legal regulations and their interpretation evolve over time. We are ARROWS advokátní kancelář, an entity registered with the Czech Bar Association (our supervisory authority), and for maximum client security we are insured for professional liability with a limit of CZK 400,000,000. To verify the current wording of regulations and their application to your specific situation, it is necessary to contact ARROWS advokátní kancelář directly (office@arws.cz). We accept no liability for any damages arising from the independent use of the information in this article without prior individual legal consultation.

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