Understanding International Sales Contracts

Understanding and creating international sales contracts is a necessary and important part of being a successful exporter. Differences in exporters’ and importers’ traditions and backgrounds, as well as laws and regulations governing international sales, can cause complications you may not have thought about, which is why written contracts are crucial. This video explains what you need to know about creating an international sales contract.
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An international sales contract is an agreement between a buyer and a seller that identifies the parties in the transaction, the goods or services being sold, the terms and conditions of the sale, and the price to be paid. International sales fall under the United Nations Convention on Contracts for the International Sale of Goods (CISG).
A sales contract can be a verbal agreement between two parties, a collection of documents such as a purchase order and an order acknowledgement exchanged between two parties, or a formal, written agreement signed by the buyer and the seller. The type of agreement your company uses may depend on the value of the sale, the nature of the goods, and the complexity of the terms of the agreement.
We always recommend having a written contract.
A written contract forces both the buyer and seller to think about the details of the sale up front. Before a contract is written, it is much easier for both parties to bargain; once a contract is created, it becomes much more difficult. A written contract also reminds both parties of the terms of the sale.
A written contract also offers legal protection. Contracts should be unambiguous and written in such a way that even those who are not involved in the world of commercial exporting would understand the terms of the agreement.
In real life, most exporters and importers do not sit down together to sign a single, formal document called a contract. Contracts are typically created through a process that may include an offer, acceptance, rejection and counteroffer. Not all of these steps occur in every sale.
Within both the Uniform Commercial Code (UCC) and the United Nations Convention on Contracts for International Sale of Goods (CISG), there are variations on whether or not a contract exists and when or if it is accepted. We explore both of these situations in depth in the webinar, including our recommendations for whether or not to use CISG or UCC in your situation.
The following is a partial list of recommended terms and conditions buyers should have in their purchase orders and sellers should have in their confirmation documents. You can find the complete list of what to include in our webinar:
-Price.
-Description of goods.
-Method of carriage and bill of lading.
-Transfer of ownership. Note that this is not the same as Incoterms!
-Pre-shipment inspection conducted by independent third parties.
-Post-shipment inspection and rejection.
-Warranties.
-Incoterms.
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Chapters
00:00 Introduction
01:02 What Is an International Sales Contract
01:45 Why You Need an International Sales Contract
02:25 Creating a Sales Contract
03:08 International Sales Contract Terms and Conditions
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