The United States is a strategic partner of Georgia, and trade relations between the two countries are deepening. Concluding contracts with American companies requires special caution because the US legal system (Common Law) is fundamentally different from Georgia's Civil Law system. Terms, concepts, and liability standards often do not align. Furthermore, US legislation has extraterritorial reach in certain areas (e.g., corruption, sanctions, financial regulations), creating additional risks for Georgian companies.
For Georgian businesses wishing to benefit from the Generalized System of Preferences (GSP) or attract American investment, drafting contracts that are clear and enforceable in both jurisdictions is critical. The biggest challenge is often selecting the dispute resolution mechanism, as litigation in US courts involves enormous costs. Specialists featured on Legal.ge will assist you in negotiations with US partners and in preparing contracts that protect your interests and mitigate transatlantic trade risks.
What does the Georgia-US Contracts service cover?
- Harmonization of Legal Systems: Correctly adapting "Common Law" terms (e.g., Indemnification, Warranties, Representations) to the Georgian reality to avoid interpretation problems.
- Utilizing GSP Regime: Consulting on which Georgian products qualify for duty-free entry into the US and preparing relevant documentation.
- FCPA and Sanctions: Including anti-corruption (FCPA) and sanctions compliance clauses in the contract, which is a mandatory requirement for American partners.
- Intellectual Property: Developing a strategy for protecting trademarks and patents when entering the US market.
- Dispute Resolution and Arbitration: Drafting a neutral arbitration clause (e.g., New York, London, or Paris) to avoid expensive US court litigation.
- Tech Startups (Delaware Flip): Supporting Georgian startups in moving to US jurisdiction (often Delaware) and concluding agreements with American investors.
Common scenarios requiring this service
A typical scenario is the export of Georgian wine to the US. Here, the distribution agreement must account for the specifics of each state's alcohol regulation (Three-tier system). A second scenario is a Georgian tech startup raising venture capital from the US; the investor requires a Shareholders' Agreement regulated by US law and the transfer of IP rights. A third case involves a franchising agreement with an American brand (hotel, fast food), where the franchisee in Georgia must detail their rights and obligations.
Georgian Legal Framework
A Bilateral Investment Treaty (BIT) is in force between Georgia and the US, protecting investors. In terms of trade, Georgia benefits from the US Generalized System of Preferences (GSP), which implies zero tariffs on thousands of products. In private legal relations, the Law of Georgia on Private International Law is crucial, determining the applicable law unless the parties agree otherwise in the contract.
Step-by-step service process
The process begins with analyzing the draft contract provided by the American side (as they usually offer their own forms). The lawyer identifies "red lines" (e.g., disproportionate liability, unacceptable jurisdiction). Then negotiations proceed to balance the terms. Special attention is paid to tax aspects (FATCA, withholding tax). The final stage is signing and monitoring performance.
Why choose a specialist on Legal.ge?
Business with the US holds great promise but also carries significant risks. On Legal.ge, you will find lawyers who have experience collaborating with American law firms or have received education in the US. They speak the "language" of American partners and will help you avoid costly legal mistakes.
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