It is difficult to provide a comprehensive standard contract form which is applicable to all export agreements; however, it is important to be aware of certain minimum general requirements or general conditions in the export contract which will help the exporter and importer in developing an export contract. These conditions can serve as the basic elements of an export contract.
Name and addresses of the parties
Product, standards, and specifications: The export contract should explicitly state the product name including any technical names; sizes, if any, in which the product is to be supplied; national or international standards and specifications; specific buyer requirements; and sample specifications.
Quantity: The quantity should be clearly stated both in figures and words, specifying whether it is in terms of number, weight, or volume. If the quantity refers to goods by weight or by measurement, the nature of the same should be specified.
Total value of the contract: The total value of the contract should be put in both words and figures specifying the currency along with the name of the country.
Terms of delivery: Terms of delivery (under Incoterms 1990) should be put in both words and figures specifying the currency along with the name of the country.
Period of delivery/shipment, etc.: The place of dispatch and delivery should be clearly specified. The time for delivery should be also specified, either as stating from, 1) the date of the contract, 2) the date of notification of the issue of an irrevocable confirmed letter of credit, or 3) the date of receipt of the notice issuing the import license by the seller.
Inspection: Although a number of goods are now subject to pre-shipment inspection by designated agencies, foreign buyers may still stipulate their own conditions and manner of inspection by any other agency. Therefore, the parties must clearly state the nature, manner, aspects, and agency for inspection of goods which are different from those articulated under the quality control and pre-shipment inspection rules.
Packaging, labeling and marking: The packaging, labeling and marking requirements are normally quite different in case of export consignments and should be clearly stated in the contract.
Terms of payment – amount, mode & currency: While quoting different payment terms the exporter should specify whether the prices are based on a current rate of exchange of the Omani Riyal on the basis of another currency (e.g., US dollar). Fluctuations in the rate of exchange should be addressed as well.
Discounts and commissions: The contract should specify the amount of discount or commission to be paid and by whom (i.e. by the exporter or by the importer). The basis of calculation of commission and rate of the same may also be clearly stipulated. Discount or commission rates may or may not be included in the export price to be agreed to by the exporter and importer.
Licences and permits: Obtaining import licences in the buyer’s country may be more difficult in some countries than others. Parties to the contract should therefore clearly state whether the export transaction will require any export or import licenses and whose responsibility and expense it will be to obtain them.
Insurance: A contract should explicitly provide for insurance of goods against loss, damage, or destruction during voyage. The contract should cover the extent of insurance risk and its incidence.
Documentary requirements: Documents required for international trade transactions can be divided into four broad categories:
· Documents required for exportation and subsequent importation of goods
· Documents needed by the buyer for taking delivery of the goods
· Documents relating to payment
· Special documents depending upon the nature of goods and conditions of sale (e.g., certain engineering goods may involve documents relating to assembly, repair, and maintenance)
Common export documents include the bill of exchange; commercial invoice or any other kind of invoice; bill of lading or air way bill; insurance policy; and letter of credit.
Force majeure or excuse for non-performance of contract: Parties should include certain provisions in the contract defining the circumstances which would relieve them of their liability for non-performance of the contract. Such provisions are called “force majeure” and are intended to identify the relief which may be available to either party to the contract in the event of supervening circumstances occurring after the conclusion of the contract.
Guarantee: The length of the period of guarantee should be fixed.
Remedies: In the event of different defaults of contractual obligations by any of the parties, it is always advisable to include in the sale or purchase contracts certain specific remedies. These remedies should reflect the mandatory provisions of applicable law to the contract.
Arbitration: The contract should include an arbitration clause for amicable and quick settlement of disputes or differences that may arise between the parties.
Applicable law: The contract should state the law of the country which is to govern the contract.
Delay in delivery: The contract should define the damages due to the buyer from the seller in the event of late delivery owing to reasons other than force majeure.
reference:
TRADE
The Export Answer Book
reference:
No comments:
Post a Comment