CHAPTER 6
Key Issues in International Sales Contracts that need concern only one of the parties to a sales transaction, but a number of key issues must be taken into account by both parties. At first glance, the key issues may seem relevant to one party or the other only. However, the success of the entire transaction, as well as the profit for both parties, tend to hinge on these key issues. Regardless of whether you are the buyer or the seller, you must at the least become aware of export and import requirements, international payment methods, foreign exchange rules, intellectual property rights, and choice of governing law and jurisdiction.
THERE ARE MANY ISSUES
Export Issues When entering into a cross-border transaction, both parties must consider the issues related to exporting. These issues do not arise in purely domestic contracts and therefore are probably unfamiliar, especially to the first-time exporter. A party who has no understanding of these issues may well find that performance of the contract is impossible, or disadvantageous at best. Rather than renegotiate the terms of your contract later, you should take export issues into account up front. ADAPTATIONS TO IMPORTING COUNTRY
The first issue to consider when exporting is whether your products will be acceptable in the foreign market. Before a product can be considered ready for export, the seller will have to ensure that the product is adapted for the market of the importing country. The costs of adaptation, whether to meet cultural preferences or regulatory laws, typically fall on the seller because a buyer is unlikely to make a deal unless the products can be used or sold in the buyer’s country. Your contract may need to cover one or more of the following points. ■ COMPLIANCE WITH LAWS
Which party is obligated to adapt the goods such that they are in compliance with consumer laws, any other quality standard regulations, and environmental laws of the importing country? The seller often agrees to provide goods that comply with the laws and regulations of the importing country so that the seller can ensure that the same standards of quality are maintained when the goods are adapted. However, if the seller is unfamiliar with the requirements, the contract may require the buyer to supply specifications sufficient to meet the requirements. If alterations are minimal, such as the addition of labels or stamps, the buyer may agree to make the changes because the cost is minor and the seller can then ship immediately.
53
