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The Importance of Selected Clauses in International Sales Contracts from the Point of View of Risk Perception and Attitude

Author

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  • Hinčica Vít

    (Prague University of Economics and Business, Department of International Business, Faculty of International Relations)

  • Řezanková Hana

    (Prague University of Economics and Business Department of Statistics and Probability Faculty of Informatics and Statistics)

  • Janků Dominika

    (Prague University of Economics and Business Department of International Business Faculty of International Relations)

Abstract

Research background Universally, it remains unknown which clauses used in international sales contracts are seen by the business sector as crucial for reducing perceived risks. It is also unknown whether there is a relationship between companies’ attitudes toward risks and the number of clauses they consider essential in international sales contracts for this purpose. Purpose The paper surveys how Czech companies assess the importance of selected clauses in an international sales contract when trying to reduce the risks they perceive. The primary purpose is to learn whether there is a concordance with the available literature on the number of clauses considered important, key, or necessary for reducing risks. Research methodology Companies were offered nine clauses commonly used in international sales contracts and were asked to rate them according to their importance for reducing risks. Furthermore, possible relationships between companies’ attitudes toward risk and the number of clauses these companies perceive as important from the point of view of their risk attitude were investigated. Results Whereas the existing literature provides different numbers of key clauses a sales contract shall include to make such a contract safe enough from the perspective of the perceived risks, the 114 surveyed Czech companies mostly gave the highest level of importance to four of the nine assessed clauses only. These clauses are the identification of parties, price setting, the object of sale and payment terms. There is an indication that companies with an aggressive attitude toward risks could consider fewer clauses as important. Novelty The study suggests that the number of clauses that are formulated with enough care for the sake of risk reduction is lower than the numbers proposed by the existing sources. The authors contradict extant academic business literature and expert texts on the issue in question by launching the first survey among companies ever. Note This paper is a significantly modified and extended version of a text presented at the 48th EIBA Annual Conference – Oslo, in December 2022.

Suggested Citation

  • Hinčica Vít & Řezanková Hana & Janků Dominika, 2024. "The Importance of Selected Clauses in International Sales Contracts from the Point of View of Risk Perception and Attitude," Folia Oeconomica Stetinensia, Sciendo, vol. 24(2), pages 125-140.
    • Handle: RePEc:vrs:foeste:v:24:y:2024:i:2:p:125-140:n:1007
    DOI: 10.2478/foli-2024-0019
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    References listed on IDEAS

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    1. Joost M. E. Pennings & Brian Wansink, 2004. "Channel Contract Behavior: The Role of Risk Attitudes, Risk Perceptions, And Channel Members' Market Structures," The Journal of Business, University of Chicago Press, vol. 77(4), pages 697-724, October.
    2. Bazil Oglinda & Cristina Olariu, 2018. "Risky business: distribution of risk in contracts for international sales of goods," Juridical Tribune - Review of Comparative and International Law, Bucharest Academy of Economic Studies, vol. 8(1), pages 103-113, March.
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    More about this item

    Keywords

    business; risks; Czech Republic; companies; clauses; risk perception;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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