International Sales Contract

International Sales Contract in International Trade

Meaning of International Sales Contract, according to the Dictionary of International Trade (Global Negotiator): An agreement between a seller and a buyer for the sale of goods. The contract should, at a minimum, identify the seller and buyer, the quantity and type of product, delivery time, price and conditions of payment. In addition, a well-constructed international sales contract will reference the governing body of law, the forum where any disputes are to be resolved and the method of dispute resolution, such as arbitration as opposed to litigation.

For international sales of goods, the body of law will often be the UN Convention on Contracts for the International Sale of Goods (CISG), known as Vienna Convention. Contracts for the international sale of goods should also indicate the terms of sale, preferably one of the 11 Incoterms. Sales contracts covering goods that are not shipped under a negotiable marine bill of lading should also specify when (time and place) and/or how ownership passes from seller to buyer. Often international transactions are conducted without the benefit of an international sales contract. Instead the seller provides a quotation (often in the form of proforma invoice) and the buyer responds with a purchase order. This may be sufficient for repeat sales between well acquainted parties that have developed a basis of previous dealings. However, it can lead to unanticipated problems in case of disputes. Major issues not covered in the international sale contract and without precedence in previous dealings between the parties will be “filled in” by the dispute resolving authority, often with surprising consequences.

Contents

• Tax Issues
• Pricing
• Delivery, Storage, Shipment, and Insurance
• Liquidated Damages and Penalty Provisions
• Government Authorizations
• Excusable Delays and Exemption Clauses
• Terms of Payment
• Taxes and Duties
• Warranties
• Patent Indemnity
• Limitation of Liability
• Hazardous Applications: Nuclear and Other Applications
• Inspections, Tests, and Approvals
• Termination and Default
• Governing Law and Resolution of Disputes
• General Conditions
• Other Contract Clauses and Issues: Changes, Confidentiality, Indemnity Clauses, Training of Buyer Personnel
• Purchase Order Transactions
• Contract Proposals
• Revocability of Offers
• Pre-Contractual Liability: Letters of Intent
• Preventive Contracting: Better Business Through Good-Quality and Proactive Legal Care
• Contract Negotiations—Systems and Strategies
• Outsourcing
• Consortium Agreements
• International Contracting with Governments: Government Procurement
• Foreign Sales of Military Equipment
• Managing International Political Risk
• International Anti-Bribery Standards and Specific Risk Areas
• The United States Sarbanes-Oxley Act of 2002: The Non-U.S. Issuers
• Foreign Laws Applicable to Use of Representatives and Distributors
• Anti-Boycott Compliance
• United States Export Controls
• European Union Export Controls
• Regulation of Electrical and Electronic Equipment and Chemicals in the European Union
• Export of Hazardous Materials and Restricted Articles from the United States
• Antitrust Law
• United States Trade Laws
• European Union Trade Laws
• United States Customs Laws
• European Union Customs Laws
• Transfers of Customer and Employee Personal Data from the European Union

Resources

See Also

• Incoterms
• Proforma invoice
• Purchase order
• Vienna Convention
• Model of International Sales Contract.

Further Reading

Commentary on the Draft Convention on Contracts for the International Sale of Goods. Prepared by the Secretariat (A/CONF. 97/5) , O.R., S. 14-66.
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