The International Sale Contract is the most used among those governing trade relations between companies in different countries. This agreement sets out the rights and obligations of the parties (buyer and seller) and the remedies for breach.
This contract is greatly influenced by the United Convention on Contracts for the International Sale of Goods (CISG), widely accepted by lawyers of different traditions and backgrounds. It articulates practical requirements arising from commercial practice with the general rules of CISG. Besides CISG, other sources of uniform contract law used in drafting this contract are the following: Uniform Law on the International Sale of Goods (ULIS), UNIDROIT Principles of International Commercial Contracts and the Principles of European Contract Law.
The International Sale Contract can be divided into four parts:
First Part: Lays down rules of on the goods: delivery, price, payment conditions and documents to be provided.
Second Part: Governs the remedies of the seller in case of nonpayment at the agreed time, lack of conformity of goods, transfer of property and legal effects.
Third Part: Contains the rules on avoidance of contract and damages, avoidance procedure, effects of avoidance, as well as rules on restitution, damages and mitigation of harms.
Fourth Part: Contains the standard clauses.
Regardless of who drafts the contract, sellers and buyers need to be aware and thoroughly review the most important clauses to protect their own interests. Although the law of many countries will imply certain terms to encourage fair dealing, this law is generally applied through costly and time-consuming legal processes, whether court or arbitration. Accordingly, the best way to control of your contract is to clarify each party´s responsibility in the agreement by paying close attention to every contract term.
For instance, when you agree to buy a certain amount of merchandise raises several questions to be addressed in the contract: Where will deliver the goods? At what moment the payment will be made? What happens if the merchandise does not meet the agreed conditions?.
Below, we offer a checklist of 30 key elements that must be clearly defined in an international sales contract.
International Sale Contract Checklist
|✔||Contract date||✔||Tariffs and taxes|
|✔||Identification of Parties||✔||Insurances|
|✔||Goods – description||✔||Inspection rights|
|✔||Goods – quantity||✔||Intellectual property rights|
|✔||Price of goods||✔||Re-exportation prohibition|
|✔||Method of payment||✔||Termination due to breach of contract|
|✔||Payment – currency||✔||Indemnities|
|✔||Payment – term||✔||Granting rights and obligations|
|✔||Payment – method of payment||✔||Term of contract|
|✔||Delivery – date||✔||Ownership|
|✔||Delivery – date||✔||Force Majeure|
|✔||Transportation – carrier||✔||Notices|
|✔||Transportation – handling charges||✔||Arbitration|
|✔||Transportation – shipping time||✔||Applicable legislation|
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