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How do the U.S. and South America negotiate business contracts differently?

On Behalf of | Oct 10, 2023 | Business, International Business Contracts, Quito |

Understanding cultural differences is crucial when negotiating business contracts. While the United States and South America may share some similarities, their approach to contract negotiations can vary significantly. Companies seeking to expand into South America should be aware of these differences to ensure successful negotiations.

Relationship Building

In the United States, business negotiations often prioritize efficiency and focus on reaching an agreement quickly. This approach is rooted in the emphasis on individualism and task-oriented work culture. Conversely, South American countries place a greater emphasis on relationship building, favoring long-term connections over quick deals. Building trust and personal connections are crucial in South American business culture, often leading to more time spent in negotiations to nurture these relationships.


Another key difference lies in the level of formality during negotiations. In the U.S., negotiations tend to follow a structured agenda, where each party’s expectations and terms are clearly defined. Contracts are typically detailed and include precise legal language to ensure clarity and enforceability. On the other hand, South American negotiations can be less formal, with a greater emphasis on face-to-face interactions and verbal agreements. Contracts may be less detailed and rely more on the mutual understanding between the parties involved.

Hierarchy and Decision-Making

The hierarchical nature of South American business culture significantly influences contract negotiations. Decision-making processes often involve multiple stakeholders, with higher-ranking individuals having the final say. It is essential to understand the power dynamics within the South American business environment and adapt negotiation strategies accordingly. In contrast, U.S. negotiations typically involve decision-makers directly, enabling faster decision-making processes.

Flexibility and Adaptability

Flexibility and adaptability are crucial when negotiating contracts in South America. Change is expected throughout the negotiation process, and parties should be prepared to accommodate evolving circumstances. The ability to adapt to unexpected changes without disrupting the negotiation process is highly valued in South American business culture. In the U.S., negotiations generally follow a more structured and predefined approach, with less room for spontaneous adjustments.

Legal Considerations

Navigating international law and local regulations is essential when negotiating contracts in South America. Understanding the legal framework of each country is vital to avoid any potential legal pitfalls.

Negotiating business contracts in South America differs significantly from the US. The importance of relationship building, flexibility, and understanding cultural nuances cannot be overstated. Urban Thier & Federer with their deep understanding of both cultures and extensive legal expertise, can seamlessly navigate these differences and assist companies in bridging the gap between the U.S. and South American business cultures. Trust and effective communication are key to successful negotiations, and seeking expert guidance ensures a favorable outcome for businesses venturing into South America.