Elements of a Contract General Provisions The

Elements of a Contract

General Provisions The exporter’s (seller’s) registered name and address.

General Provisions l The importer’s (buyer’s) registered name and address

General Provisions A short title of each party quoted in items (1) and (2).

General Provisions l Purpose of the contract

General Provisions l The number and quantity of goods precisely and fully described to avoid any later misunderstanding or dispute. One must mention details of any batches and reconcile goods description with customs tariff specification

General Provisions l Price. This may be in the seller’s currency depending on its general stability, or some other currency which is not likely to vary in value significantly throughout the contract duration. To counter inflation, particularly in a long-term contract, it is usual to incorporate an escalation clause.

General Provisions Terms of delivery. It is important that the correct Incoterm 2010 is selected.

Terms of Payment l Terms of payment, for example, open account, cash with order, letter of credit, or payment for collection against shipping documents or acceptance.

Delivery (dates) l Delivery date/shipment date or period. The exporter should check with his production department that the delivery date quoted is realistic and the shipping or air freight space will be available on the date or period specified. The exporter’s obligations regarding the latter will depend on the terms of delivery.

Delivery (methods) l Methods of shipment, for example, container, cargo, wagon, Ro/Ro or air freight. An increasing volume of trade is now conveyed under combined transport operation arrangements

Delivery (Packing) Methods of packing. It is desirable both parties are fully aware and agree on the packing specification to ensure no dispute later arises regarding packing or any variation to it, as packing must conform to international standards and must comply with customs regulations.

Delivery (Insurance) l Cargo insurance policy or certificate terms.

Delivery (licences) l Import or export licence details or other instructions. The period of their validity must be reconciled with the terms of payment and delivery date/shipment date or period.

Delivery(documentary requirements) Shipping/freight/documentary requirements and/or instructions. This includes marking of cargo.

Basic Terms and Conditions l Contract conditions, for example, sale, delivery, performance (quality) of goods, arbitration etc. With regard to arbitration, this tends to speed settlement of any disputes without costly litigation.

Basic Terms and Conditions l Included in the contract must be the law of the country under which it will be enforced.

Basic Terms and Conditions l Signature. Both parties to sign the contract by a responsible person at director or managerial level, and the date recorded.