Legal Structure of Offset Contracts

Offset agreements are legal trade practices، common in the aerospace and military industries. The international names for these commercial practices are various: industrial compensations، industrial cooperation، offsets، industrial and regional benefits، balances and equilibrium. An offset agreement is an agreement between two parties whereby a supplier agrees to buy products from the party to whom it is selling، in order to win the buyer as a customer and offset the buyer''s outlay. Generally the seller is a foreign company and the buyer is a government that stipulates that the seller must then agree to buy products from companies within their country. Indeed، industrial compensation practices required as a condition of purchase in either government-to-government or commercial sales of articles and/or services. Often، the aim of this process is to even-up a country''s balance of trade. Although the offset agreement is so significant، it has been rarely known for inner academic associations; in this work، after brief introducing of the mechanism، variations and compensatory obligations of these contracts، we discuss about the structure of them and the tendency of their parties to bind independent contracts related to each other throughout a document called the protocol.