Cross-border trade agreements: where deals succeed or quietly fall apart

By Ginen Moodley, Moodley Attorneys Inc. 

Cross-border trade has become part of the everyday reality for South African businesses. Whether it’s sourcing goods, expanding into new markets, or forming strategic partnerships, more companies are operating beyond local borders than ever before.

But while the commercial opportunity is clear, the legal complexity is often underestimated.

Too often, businesses approach cross-border agreements as if they are simply an extension of local contracts. They are not. What works in Johannesburg does not automatically translate in Nairobi, London or Dubai. And it is in that gap between expectation and reality where risk begins to build.

Recently, we advised on a cross-border supply agreement involving multiple jurisdictions, each with its own regulatory framework, enforcement environment and commercial norms. On paper, the deal looked straightforward. In practice, it required careful alignment across legal systems, tax considerations, delivery obligations and dispute mechanisms.

That experience reinforced a simple point. The success of a cross-border agreement is rarely determined by the headline terms. It is shaped by the detail that sits beneath them.

One of the most common mistakes businesses make is assuming that legal enforceability is universal. It is not. A clause that is standard in South Africa may be interpreted differently elsewhere, or worse, may not be enforceable at all. Jurisdiction clauses, governing law provisions and dispute resolution mechanisms need to be considered carefully, not copied across from precedent agreements.

Payment terms are another area where issues quietly emerge. Currency fluctuations, exchange controls and differing banking systems can all affect how and when money moves. Without clear provisions, what starts as a commercial arrangement can quickly become a cashflow problem.

Then there is the question of risk allocation. In local agreements, parties often have a shared understanding of operational realities. In cross-border deals, that shared understanding cannot be assumed. Delivery obligations, insurance, liability caps and force majeure provisions all need to be clearly defined, particularly where supply chains cross multiple territories.

Cultural and commercial differences also play a role. Negotiation styles, expectations around performance and even approaches to dispute resolution can vary significantly between jurisdictions. These are not just soft factors. They influence how agreements are interpreted and how relationships evolve over time.

What is striking is that many of these risks do not sit in obvious places. They sit in the assumptions businesses bring into the agreement.

This is why professional support is not a “nice to have” in cross-border transactions. It is a critical part of the process. Legal advisors are not there simply to draft documents. They are there to identify blind spots, stress-test assumptions and ensure that the agreement works in practice, not just in principle.

For businesses looking to expand beyond South Africa, the focus should not only be on getting the deal done. It should be on getting the deal right.

Because in cross-border trade, the real test of an agreement is not when it is signed. It is when something goes wrong.

That is when the quality of the drafting, the clarity of the terms and the strength of the advice behind it becomes evident.