International Import-Export Sales Agreement

What a good one includes

• Explicitly defined Incoterms, such as FOB or CIF, to establish exactly where the risk of loss transfers from the seller to the buyer.
• Detailed payment mechanisms, such as Letters of Credit or documentary collections, specifying the accepted currency, deadlines, and banking channels.
• Comprehensive product specifications and quality standards, including tolerances for variances and the inspection procedures required before shipping.
• A retention of title clause ensuring the seller retains legal ownership of the goods until full payment is received.
• A clear dispute resolution framework specifying the governing law, the jurisdiction, and whether arbitration or litigation will be used to resolve conflicts.
• A robust force majeure clause that outlines what happens if geopolitical events, natural disasters, or shipping blockades disrupt the delivery.

Common mistakes to avoid

• Confusing Incoterms with payment terms or using outdated versions, which leads to unexpected shipping costs and liability gaps.
• Failing to specify the governing law and jurisdiction, leaving parties vulnerable to unpredictable foreign courts in the event of a dispute.
• Omitting detailed quality benchmarks and pre-shipment inspection protocols, making it incredibly difficult to reject substandard cargo once it arrives.
• Neglecting to address currency fluctuation risks, which can quickly erode profit margins during long transit and payment windows.

Frequently asked questions