What to check before signing any contract abroad

Signing a contract in a foreign country adds layers of complexity that most people never think about until something goes wrong. Which country's law applies? What language version counts if there is a dispute? Can a clause follow you back to your home country?

Here is a practical checklist for anyone signing a contract abroad — whether you are renting a flat, taking a job, or starting a business in a new country.

1. The governing law clause

Every cross-border contract should specify which country's law governs the agreement. This is not a technicality — it determines which courts you can go to, which consumer protections apply, and how disputes are resolved.

If you are signing a rental lease in Germany, German law should govern it. If the contract says disputes will be handled under the laws of another country, that is a red flag. In the EU, consumer contracts generally cannot force you to litigate in a country other than where you reside, but the clause can still cause confusion and delays.

What to check: Find the "Governing Law" or "Applicable Law" clause. Make sure it matches the country where the contract will be performed. If it does not, ask why.

2. The language trap

Many contracts abroad are presented in a language you do not speak fluently. Some offer a translated version alongside the original. The critical question is: which version prevails in case of a conflict?

A contract might say "In case of discrepancy between the French and English versions, the French version shall prevail." If you signed based on the English translation and there is a subtle but important difference, you are bound by the French text you may not have fully understood.

What to check: If the contract exists in multiple languages, identify which version is legally binding. If only the local language version counts, get an independent translation of the key clauses before you sign.

3. Dispute resolution and jurisdiction

Where will disputes be heard? Some contracts include arbitration clauses that require disputes to be resolved privately rather than in court. Arbitration can be expensive, and the rules often favor the party that drafted the contract.

Others specify a particular court — for example, "Any disputes shall be brought before the courts of Zurich." If you have moved back to your home country by the time a dispute arises, litigating in Zurich becomes impractical and expensive.

What to check: Look for arbitration clauses, jurisdiction clauses, and venue clauses. In consumer contracts within the EU, you generally have the right to sue in your country of residence regardless of what the contract says.

4. Currency and exchange rate risk

If your contract specifies payments in a currency different from your income, you are exposed to exchange rate risk. A rent of 1,500 CHF per month might seem manageable when the rate is favorable, but currency fluctuations can increase your effective cost by 10-15% over a year.

What to check: What currency are payments denominated in? Is there a fixed exchange rate clause? Who bears the risk of currency fluctuations? Can payments be made in your home currency?

5. Clauses that follow you home

Some contractual obligations survive the end of the contract and can follow you across borders. Non-compete clauses, confidentiality obligations, and IP assignment clauses do not stop at national borders.

If you sign an employment contract in Luxembourg with a 12-month non-compete, that obligation may be enforceable even after you move back to France or Germany — depending on the governing law and the specific clause wording.

What to check: Identify all clauses with a "survival" or "post-termination" section. Understand which obligations continue after the contract ends, for how long, and in which territories they apply.

6. Local mandatory protections you might not know about

Every country has mandatory legal protections that apply regardless of what the contract says. In France, tenants cannot be evicted during the winter truce period (November to March). In Germany, many standard contract terms (AGB) are void even if you signed them. In the Netherlands, temporary employment contracts automatically convert to permanent after three renewals.

These protections exist to protect you, but you will not benefit from them if you do not know they exist.

What to check: Research the mandatory protections in the country where the contract will be performed. Focus on the areas most relevant to your contract type — tenant protections for rental leases, employee protections for work contracts.

7. Tax implications

Contracts abroad can create tax obligations in the foreign country. Employment income is typically taxed where you work. Rental income is typically taxed where the property is located. Business income depends on where you have a permanent establishment.

Some contracts include gross-up clauses or tax equalization provisions. Others leave the tax burden entirely on you without making it explicit.

What to check: Does the contract address tax? Will you be taxed in the foreign country, your home country, or both? Is there a double taxation treaty between the two countries? Consider consulting a cross-border tax advisor.

8. Exit terms and early termination

How do you get out of the contract if your circumstances change? Expats often face unexpected situations — a job offer falls through, a relationship ends, a family emergency requires returning home. Your contract should have clear exit terms.

What to check: What is the notice period for early termination? Are there financial penalties? Can you assign or transfer the contract to someone else? What happens to deposits or advance payments?

Before you sign

Signing a contract in a foreign country is inherently riskier than signing one at home. You may not speak the language fluently, you may not know the local legal protections, and enforcing your rights from another country is expensive and slow.

Take the time to understand what you are signing. Use a tool like ClauseCheck to get a plain-language analysis. And for significant contracts — employment, property, business partnerships — invest in a local lawyer who can explain the implications in your language.