Negotiating contracts in the U.S.: a necessity, not a formality

Many Italian companies doing business with American partners still underestimate the importance of putting their commercial agreements in writing. Relying on trust, informal emails or basic purchase orders may work domestically, but it can be very risky across the Atlantic, where the legal system operates under a completely different logic.

Italy, like most of Europe, follows a Civil Law system based on codified rules and general principles that apply even without detailed contracts. The U.S., by contrast, follows Common Law, where precedence, custom and, above all, the express language of the contract govern the relationship. This is why contracts in the U.S. are often described as “self-sufficient” — they must cover every aspect in detail, leaving as little as possible to judicial interpretation.

Failing to formalize an agreement exposes the Italian business to two major risks: not knowing which law governs the contract, and leaving key issues to the interpretation of judges, who in the U.S. have broad discretion and may interpret ambiguities in unexpected (and expensive) ways.

The myth of the “too long” contract

Many Italian entrepreneurs, used to more informal relationships, see American contracts as overly long or rigid. In truth, that detail exists to prevent misunderstandings, avoid grey areas, and clearly define roles, risks and remedies. In Common Law systems, if it’s not written, it doesn’t exist. Better to negotiate it now than litigate it later.

Contracts as a competitive asset

A robust contract is more than just legal protection — it’s a tool for efficiency and a signal of professionalism. U.S. partners expect detailed, well-structured agreements. Showing up prepared is a sign of reliability and improves your standing in the market.

Key clauses you can’t ignore

Certain clauses are crucial when contracting with U.S. partners, especially due to common U.S. commercial practices:

  • governing law and jurisdiction, to avoid litigation in inconvenient or unpredictable courts.

  • payment terms: “Net 30” or “Net 60” are common — specify timing, method, early payment discounts and late penalties.

  • incoterms and transfer of risk, to clarify who bears responsibility during shipment.

  • warranty exclusions and limitations, to avoid open-ended liability for post-sale issues.

  • liability limitations, especially for consequential damages, lost profits or reputational harm.

  • indemnification: often requested by U.S. companies, and often overly broad — negotiate carefully.

  • termination clauses: “termination for convenience” is standard in the U.S., but must be balanced with protections.

  • force majeure and supply chain disruptions, which must be defined in detail post-Covid and in times of geopolitical instability.

  • confidentiality clauses, to protect trade secrets and client data.

  • dispute resolution, considering whether international arbitration is preferable to court litigation.

The hidden cost of informal agreements

Not having a contract — or having a vague one — doesn’t save money. It creates hidden costs: disputes, delays, non-payments, and reputational damage. A contract is not a burden — it’s an investment in clarity, continuity and peace of mind.

Written contracts show professionalism — not mistrust

Drafting a thorough contract is not a sign of mistrust, but of mutual respect and clarity. In the U.S., it’s expected. Refusing to sign or insisting on vague terms may signal inexperience or unpreparedness.