Trade Contract

Date: 2015-10-07; view: 408.

Care must be taken in negotiating contracts for the purchase of raw materials and products, and the importing company should, whenever possible, take legal advice before signing an agreement which could conceivably contain clauses not in the best interests of the importer. Because of the hundreds of thousands of contracts for regular merchandise that are concluded internationally in the course of a year, most traders use one or other of the standard sets of contract conditions that have been proved and tested for that purpose. The British Importers Confederation has issued a list of the most important items to be included in any contract. These take in:

Description. A clear description of the goods, their price and quality must be given in detail.

Price. This might cover more than the cost of the goods, and unless agreed in advance importers could find transport, insurance and other items included in the price.

Specifications. These must comply with UK regulations, particularly those relating to standards, health, safety, agriculture and defense.

Payment. Not only the method of payment (in advance, by open account, by collection or by letter of credit) but also the due date of payment must be included.

Packing. It is essential that the goods are transported, marked, packed and stored correctly and in such a manner as to be fully protected –. whether they are carried by road, rail, ship or aircraft. Packing must conform to international standards and must comply with Customs regula­tions.

Transportation. The method is an important consideration, especially if it is included in the price of the goods, so that the alternative methods must be investigated. Much will depend, however, on the type of product and the variety of transport available from the point of supply.

Delivery. Whether the goods are delivered in one consignment or by instalments over a set period, the date(s) and quantity must be stipulated in the contract. It is also advisable to include an inspection clause. This will give time following the arrival of the goods for an inspection and a claim for compensation if they are not in order.

Insurance. Whether insurance is the responsibility of the supplier or the importer must be decided in advance. Proper insurance cover, for the whole period and the different stages of transportation, is vital.

Law.Included in the contract must be the law of the country under which it will be enforced - preferably this should be English Law.