What changes in your contracts when you sell offshore

Your first offshore contract will probably be over-lawyered in the wrong places. I watch founders spend three weeks arguing an indemnity cap that will almost never be tested, then sign a governing-law clause that quietly moves every future dispute to a courtroom on the other side of the world. The terms that feel scary are rarely the ones that bite.

A handful of ordinary-looking clauses decide what actually happens when a deal goes sideways. Those are the ones worth your attention, and most of them are not the ones founders lose sleep over.

Governing law decides whose afternoon it ruins

Every cross-border contract answers two quiet questions: whose law applies, and whose courts hear the fight. Founders skim both, because nothing goes wrong on day one. The trouble is that these clauses only matter on the worst day, and by then you cannot change them.

If your contract runs under the customer's law, in the customer's courts, a dispute means hiring lawyers in a country you have never worked in, under rules you do not know, on their clock. For a small New Zealand vendor, that cost alone can dwarf the amount in dispute, which is exactly why a larger customer is content to leave the clause as it is.

You will not always win this point. A big enough buyer will insist on home turf. But know what you are trading, and if you cannot get New Zealand law, push for a neutral venue and arbitration rather than their local courts. Decide it on purpose, not by skimming.

Where the data lives is now a contract term

Ten years ago, where your customer's data sat was an engineering detail. Now it is a clause, and sometimes a law. If you hold personal data on European customers, the GDPR lets regulators fine a company up to 20 million euros or 4 percent of total worldwide annual turnover, whichever is higher, for the most serious breaches, including unlawful transfers of data out of the EU.

New Zealand has its own rule pointing the other way. Under the Privacy Act 2020, principle 12 says you may send personal information to someone overseas only if you reasonably believe they are covered by comparable privacy safeguards, or the person has agreed knowing they might not be.

You do not need to become a privacy lawyer. You do need to know where your customer's data physically lives, what you have promised about it in writing, and who carries the cost if that promise breaks. Put it in the contract before the customer's procurement team puts their version in for you.

Payment terms are a currency bet you did not mean to make

The clause founders read most carefully is price. The one they read least carefully is when, and in what currency, they get paid. That is the one that quietly moves real money.

Sell to a United States customer on net-60 terms, priced in your own dollars, and you have handed them two months of free credit and taken on a currency bet for the privilege. If the exchange rate moves against you between signing and payment, the deal you modelled is not the deal you bank. On one invoice it is noise. Across a year of offshore revenue it is a margin line you never chose.

You cannot remove the risk, but you can decide who holds it. Price in your currency and the customer carries the swing. Price in theirs and you do, which can be worth it to win the deal, as long as you have said so out loud and built it into the number.

So what should you actually over-lawyer?

Keep the list short and spend your energy there:

• Governing law and jurisdiction - whose rules, and whose courts.
• Data location and privacy obligations - where it sits, and who pays if it leaks.
• Payment terms and currency - when you are paid, in what, and who holds the exchange-rate risk.
• Termination and auto-renewal - how either side gets out, and what happens to the data when they do.

The clauses founders tend to over-lawyer - elaborate indemnity caps, bespoke liability wording, warranty lists copied from a deal ten times your size - are mostly there to be argued over, not invoked. None of this is legal advice, and when it comes to the actual drafting you want a lawyer in the customer's market, not a template off the internet. But the judgment about which terms are worth fighting for is a revenue decision, not a legal one, and that part is yours.

So before you send back the redline on your next offshore deal: are you spending your ink on the clause that will cost you, or the one that just looks frightening?

Sources. GDPR penalties: the maximum administrative fine for the most serious infringements, including unlawful transfers of personal data out of the EU, is up to 20 million euros or 4 percent of total worldwide annual turnover of the preceding financial year, whichever is higher - Regulation (EU) 2016/679 (General Data Protection Regulation), Article 83(5). New Zealand cross-border rule: an agency may disclose personal information to a recipient outside New Zealand only where that recipient is subject to comparable privacy safeguards, or the individual authorises it after being told the information may not be comparably protected - Privacy Act 2020, Information Privacy Principle 12, Office of the Privacy Commissioner. The guidance on governing law, jurisdiction, payment terms, currency exposure and which clauses founders tend to over-lawyer draws on my own experience helping New Zealand tech companies contract with offshore customers, not a single study. It is commercial judgment, not legal advice.

Nick Burns is a fractional CRO for New Zealand B2B tech companies, at home and expanding internationally. He co-founded Emendo and sold it to McKesson, then the 14th-largest company on the Fortune 500, and has since helped 60+ tech companies grow sales.