Export Contract

Export Contract

Export Contract in International Trade

Meaning of Export Contract, according to the Dictionary of International Trade (Global Negotiator): The export contract is used for the international sale of certain products (industrial supplies, raw materials, manufactured goods), which are projected for resale, where the buyer is a trader, importer, distributor or wholesaler that will sell the products to another company or merchant. Though it is common practice to export products based a proforma invoice or quotation received from exporters, it is a safe practice to use written and legal export contracts. Some of the essential elements of an export contract are:

Products, standards and specifications.

Units of measure in both figures and words.

Total value. The total contract value in words and figures, and in a specific currency.

Terms of delivery. Delivery terms, based on the Incoterms.

Terms of payment. Amount, mode and currency.

Documentary requirements. Documents needed for international trade transactions.

Delay in delivery. Damages due to the importer from the exporter in the event of late delivery owing to reasons other that force majeure.

A contract should provide for the insurance of goods against loss, damage or destruction during transportation.

Force majeure. Provisions in the contract defining circumstances that would relieve partners of their liability for non-performance of the contract.

Applicable law. The law of the country that is to govern the contract.

Arbitration clause to facilitate amicable and quick settlement of disputes or differences that may arise between the parties.

See also International sale contract. Model of Export Contract.