Introduction

Preparing an international trade contract. The start-up of an export or import operation requires the consent of the two parties (buyer and seller). This agreement takes shape generally by means of a sale contract, which aims at dividing the expenses and risks between the seller and the buyer.

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The Vienna Convention, developed under the aegis of the United Nations, regulates international trade and exchange of merchandise. Signed in April 1980, it counts today 87 signatory countries. It is applied exclusively in the case of problems linked with the formulation of a contract of sale and regulates the duties and obligations of contracting parties. Taking into account the problems posed by the choice of duty applicable, the said convention allows the choice of a neutral right. The application of the Vienna convention depends entirely on the willingness of the two parties. The companies can either exclude it totally or apply it partially. As a matter of fact, the companies desiring to develop an international activity; must take cognizance of the legal system in the target country and the Vienna Convention.

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INCOTERMS The Incoterms are trade acronyms which regulate the problems relating to international logistics and to the transfer of property rights in merchandise. They allow the distribution of expenses and risks in the onward journey of the goods from the seller to the buyer. The Incoterm constitute today the basis of the rules of international trade.

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Contract In order to carry out the contract, it is necessary that the two parties are in absolute agreement. The agreement between the contracting parties depends on the offer price, general condition of sale, and acceptance.

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General Conditions of Sale The general conditions of sale allow the companies to define the legal framework of their trade relations. The general conditions of sale are specific to each exporter. They define the duties of the buyer while allowing him to defend is own interests.

The general conditions must be written down in a clear manner and free from equivocation. They are written down either in the language of the country of the buyer or in English. The exporter must go to the essential and give emphasis on the most important points such as price, conditions of payment, the period of delivery, and modalities connected with the settlement of legal disputes.

The buyer must take cognizance of general conditions of sale before signing the contract. Otherwise, they would bo considered legally ineffective. In fine, one must know that some countries lay down general conditions of purchase. As a general rule, they oppose the conditions of the seller. In that case, the two parties must negotiate and analyze the general conditions from a legal point of view governing the contract. Every buyer who would not have denounced the general conditions of sale is supposed to have accepted them and would only have the general conditions of purchase for being able to oppose them.

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International trade is governed by treaties or contracts that legally define relations between the parties. Associations such as GAFTA, London Sugar Association, and others have their own standard traded contracts; these contracts also have a defined quality description and product specification.

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We only operate according to the international rules and practices for trading in commodities.

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Payments and Banking When it comes to payment and the obligation of the buyer to pay for the goods purchased, we usually work with a document letter of credit (DLC), or Stanby Letter of Credit (SBLC) which is required to be issued by the buyer's bank and validated by a first-class bank (25-50 rating), if the buyer's bank is not in that rating.