Multinational companies generally have their own specific international sales contracts as well as general terms of sale and purchase. On the contrary, small and medium-sized enterprises tend to use general forms or contract models, which is why it is important to negotiate and design the most important clauses. The International Chamber of Commerce (ICC) and the Federation of Oils, Seeds and Fats Associations (FOSFA) offer a wide range of international commercial contracts. However, to obtain these forms, you have to pay a fee. If you are a distributor, the terms of your international sales contract should include: Below, we select and describe the 10 key clauses of an international sales contract: Minimum purchase quantities: In most sales contracts, the supplier expects a bond for a significant amount to buy. Before a trader submits an exclusive agreement in an area, the distribution agreement contains a provision for minimum quantities of purchase. The contract should allow the use of all international payment methods, including at least: prepayment, open account, documentary collection and documentary credit (also known as accreditor). Current legislation is an important part of an international commercial contract. It is obvious that each party, as an applicable law, wants to have the right of the country where the company is headquartered. By default, the right to choose the law belongs to the party who prepares the contract, usually it is the seller. Perhaps one of the most important elements of an international treaty. This section contains items such as the amount, conditions and payment method. With respect to payment methods, the parties can choose the following options: Summary: The ICC International Sales Contract model is designed for the sale of industrial products for resale when the buyer is not a consumer and the contract is an independent transaction and is not part of a long-term delivery agreement.
It is flexible enough to allow users to integrate either the terms and conditions of all contracts or the specific terms and conditions that include common standard terms for all contracts with ICC`s terms and conditions of sale. The specific conditions are prepared to allow the parties to accept the specific terms of their sales contract and aspects such as: It may seem to you that everything is very simple when drafting the contract: Many standard clauses/contract models and documents on the subject of the international sales contract are available on the Internet. 4. Plan an exit strategy. Indicating the duration of the sales contract is a good way for an exporter to reserve the right to review and renegotiate the terms of the agreement on a regular basis. In addition, the inclusion of conditions that constitute an offence and which could trigger termination of the contract by either party is a good way to remove ambiguity and establish clear expectations and put in place an exit strategy. International sales agreements should also establish a non-compete clause, as some distributors may manage competing lines or add a competing line down. Exporters are well advised to be meticulous in managing export documentation, especially if the payment method is a recommended letter. The parties should include a clause containing a list of documents most often required for the seller in international sales contracts. Trade on a global and non-domestic basis implies that additional factors must be taken into account when entering into a sales contract.