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.