International trade contract

What aspects you need to pay attention to
An international agreement is a legally formalized deed between two or more parties, one of which is necessarily a non-resident, to supply goods of a certain quantity and quality under the terms agreed by the parties
Foreign economic activity is carried out based on the signing of relevant contracts, making it necessary to study the legal basis for the preparation, conclusion and execution/termination of contracts. An international agreement is a legally formalized deed between two or more parties, one of which is necessarily a non-resident, to supply goods of a certain quantity and quality under the terms agreed by the parties.

All changes to the international trade contracts are made in writing and are formalized by additional agreements reflecting the preamble, number, date, place of a conclusion, indicating the details and authorized persons. Only then can the changes be considered to have taken effect. Errors and inaccuracies in the preamble cancel out the entire contract. In this case, it becomes unclear who had the right to sign the contract, based on which document and on behalf of which company. It is highly likely to challenge the validity of such a contract in court.

The credentials of the person who signs the contract should be checked. It can be one of the directors, the head of the service, the head of the representative office / branch, etc. Here are the questions to answer:

· Based on what document does the authorized person act?

· Does the authorized person have this right at the time of signing?

· If the authorized person works based on a power of attorney, this document's authenticity should be verified.

The larger the contract's size, its importance and level, the more carefully such issues should be approached.
The subject of the contract must be clearly stated. It doesn't matter if you are selling or buying. You need to fully fulfill your obligations, and for this, it is essential to indicate everything correctly in the contract. Suppose the description, technical characteristics and features take up a lot of space. In that case, we advise you to put the descriptive part in a separate application with a link in the contract subject. That will allow you not to clutter the legal part of the contract with information about the product.

We also indicate the price per unit of goods, services and quantity in the application. It is better to spell the contract's total cost and the currency of payment in the body of the contract.

It should not be forgotten that the price is indicated on specific basic delivery conditions according to INCOTERMS, indicating the locality, warehouse or production. We recommend to mark the year of the edition of INCOTERMS; editions differ each year.
Payment terms should be unambiguously linked to specific actions. It will reduce financial risks. As a seller, it is most beneficial for you to receive 100% prepayment. In practice, this is not always possible. To find a compromise that suits all parties to the transaction, they often resort to breaking down payments into separate parts tied to the seller's specific actions. A suitable mechanism that guarantees payment for the goods is a letter of credit.

For example:

· 30% is paid as a guarantor of placing an order;

· 30% is paid within three banking days after the official notification of the readiness of the consignment for shipment;

· 40% is paid within three banking days against scanned copies of shipping documents.

Pre-signing contracts for scanned copies and subsequent exchange of originals is often used. To work with scanned documents as with originals, this should be indicated in the contract. It will significantly facilitate the work with banks and customs. A beneficial clause in the contract.

All this concerns the legal intricacies of concluding contracts.


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