by Ekaterina NAZAROVA
The effectiveness of international commercial agreements depends not only on clearly defined legal obligations but also on how parties interpret cultural expectations, communicate, and manage business relationships. A Cultural Protocol Appendix (CPA) could formalise these shared expectations, foster mutual trust, strengthen cooperation, and minimise the risk of misunderstandings and contractual disputes.
Every international business agreement contains two types of contracts such as the one written on paper and the one understood by the people signing it. The former sets out obligations, deadlines, risks and remedies while the latter is rarely discussed. It consists of expectations, communication styles, professional etiquette and assumptions that shape how each party interprets its commitments.
This unwritten dimension can be as influential as the legal document itself. A handshake may signal trust and long-term commitment to one party, while another sees it as a courteous gesture that does not settle the deal. A delayed response may indicate hesitation, or simply reflect workload or internal approval procedures. Such signals reflect more than national culture: individual expectations, organizational practices and the relationship’s history also matter.
Confusions arise when parties attach different meanings to the same words or actions. As Horacio Falcão and Thomas Wiegelmann argue in their Harvard Business Review article entitled “The Secret to Cross-Cultural Negotiations” that negotiators are required to focus on the individual rather than rely on cultural stereotypes. Yet these underlying expectations are not always made explicit in international contracts.
Let’s take into consideration the principle of “good faith”. The UNIDROIT Principles offer an international reference point: Article 1.7 states that each party must act in accordance with good faith and fair dealing in international trade. The principles also address pre-contractual conduct. Article 2.1.15 distinguishes the freedom to negotiate from liability for negotiating in bad faith: parties are not liable simply because no agreement is reached, but a party who negotiates or breaks off negotiations in bad faith is liable for the losses caused to the other party.
Similar uncertainty surrounds expressions such as “reasonable efforts”, “material breach”, “best endeavours” and “commercially reasonable”. Depending on the wording and applicable law, a phrase one party sees as allowing room for business judgment may be understood by another as a stricter commitment.
Partners may place different weight on relationship continuity, flexibility, formal approvals and detailed written obligations. These preferences vary between organizations and individuals, not just across countries. Neither approach is inherently superior; problems arise when parties assume their expectations are shared. When such assumptions remain unspoken, disagreements can affect not only contractual interpretation but also the performance of the agreement.
A hypothetical supplier-distributor dispute illustrates how these differences can affect a business relationship. During negotiations, both express a commitment to flexibility and mutual support. The supplier regards these statements as goodwill subject to the written agreement; the distributor understands them as assurances of additional support when market conditions change. When the distributor later requests revised delivery schedules or pricing, the supplier refuses, relying on the contract. Each party believes it is acting reasonably, but their different assumptions have damaged the relationship.
If negotiations fail, the dispute may proceed to mediation or arbitration, bringing legal costs, management time, delays and lost opportunities. In the 2025 International Arbitration Survey, respondents could select up to three reasons for choosing or considering expedited procedures; 65% cited cost minimization and 58% the need for a quick outcome. This example does not mean that cultural differences automatically cause legal disputes or determine an arbitrator’s interpretation. Rather, it shows how unclarified assumptions can complicate ordinary commercial decisions.
Businesses often assess financial, supply-chain and regulatory risks, yet cultural compatibility can still be left to intuition rather than addressed systematically. A more deliberate approach could help identify differences before they affect performance or escalate into disputes.
What if international contracts included an appendix addressing the parties’ cultural and operational expectations? In my opinion, a Cultural Protocol Appendix (CPA) is a practical document accompanying international commercial agreements to help parties establish a shared understanding of how they intend to work together. It would not replace the main contract or override applicable law. Rather, it would make the cross-cultural dimension of contract management explicit.
The CPA’s contribution is not to invent new contractual mechanisms, but to bring familiar areas of contract management into a single cross-cultural framework. It encourages parties to consider not only which procedures they agree to follow, but whether they interpret them in the same way.
A well-designed CPA could cover these five areas. First, communication: preferred channels, expected response times, meeting arrangements and procedures for urgent issues. Second, decision-making: who has authority to make commercial decisions, what approvals are needed and how internal processes affect timelines. Third, negotiation and relationship management: meeting etiquette, the role of informal discussions, expectations around personal relationships, and the distinction between preliminary understandings and formal commitments. Fourth, conflict prevention and resolution: initial consultation, designated representatives and escalation procedures. The International Chamber of Commerce (ICC) offers model mediation clauses that parties can adapt for commercial agreements. Fifth, commercial flexibility – which commitments are binding – where operational flexibility is possible, and how proposed changes should be discussed and documented.
The CPA should be developed collaboratively, not imposed by one party. Its scope should reflect the relationship’s nature, duration and complexity, and it should be reviewed as circumstances or personnel change. It would be voluntary rather than a standard requirement for every international transaction. Its legal status needs be clear. Provisions intended to create enforceable obligations should be clearly drafted as binding, expressly incorporated into the agreement and reviewed for consistency with its governing law and dispute-resolution provisions. Other elements may remain non-binding operational guidelines, provided their status is stated. The CPA could help parties manage their relationships with greater clarity by making expectations explicit without turning every cultural preference into a legal obligation.
International trade has sophisticated mechanisms for managing financial, legal and operational risks. Yet the expectations that shape business relationships often remain matters of personal intuition. Successful cooperation requires more than agreement on prices, delivery schedules and applicable law. It also depends on how partners communicate, make decisions and interpret commitments. The CPA offers a practical starting point. It cannot guarantee that disputes will disappear, but it can help parties identify differences before they become sources of conflict.
Thus, the strongest binding agreements are not necessarily those agreements which are the bulkiest. As a matter of fact, they are those in which parties understand not only what they have concluded, rectified and signed, but what they have expected from one another. The handshake may still work and the trust will always matter. However, neither should be left to assumptions alone. That’s the reason how the unwritten clause has shaped international business for generations. Consequently, the strength of an international commercial agreement lies not merely in what is written and signed, but in what both parties understand, expect, and commit to uphold throughout conducting their business.
