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Export contracts and inco terms
 

Export contracts and inco terms

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    Export contracts and inco terms Export contracts and inco terms Presentation Transcript

    • C hapter 6 Export Contract and INCO Terms
    • A sale is a contract between two parties, namely, a buyer and a seller. The seller agrees to sell his goods to the buyer at a certain price. When both parties keep their respective promises under the contract. Export sales are also the same, the only difference being that two sets of rules belonging to the home country and the importing country are needed to be followed, as also the international regulations governing international trade.
      • The terms of the contract have to be lawful and not in contravention of any legal provisions in either countries for it to be called a valid contract.
      • The system works as follows:
      • The buyer sends a query
      • The seller sends a quotation
      • The buyer accepts and sends a purchase order
      • The seller accepts the purchase order and conveys the same to the buyer
      • The export contract is in place.
      • Alternatively:
      • The seller sends an offer to supply/sell certain goods to foreign buyer
      • The buyer accepts and sends a formal purchase order to the exporter
      • The exporter acknowledges receipt of the order
      • The export contract is in place.
      Cont….
      • An export order/contract normally covers the following:
      • The item
      • The description of the item
      • The quantity required
      • The price per unit
      • The terms of payment and delivery
      • Date of order/Reference to exporter’s Proforma Invoice or quotation
      • Date of delivery
      • The kind of packaging required
      • The kind of labelling required
      • The kind of marking required
      • Insurance instructions, if required
      • Inspection instructions, if required
      • Documentation required
      • Production sample instructions, if required
      • Penalties for late delivery, if any
      • Any other special conditions
      Cont….
      • The exporter has to pay attention to following essentials of an export contract:
      • Product
      • Quantity
      • Value
      • Packing, Labelling, and Marking Requirements
      • Mode of Payment
      • Terms of Delivery
      • Consignee Details
      • Inspection Clause
      • Production Sample
      • Test Certificates
      Cont….
      • Treatment of Various Charges
      • Period Allowed for Shipment
      • Penalties for Delay
      • Insurance
      • Instructions regarding Part-shipment/Transshipment/Consolidation
      • Commissions/Discounts
      • Documents Required
      • ‘ Force Majeure’ Clause
      • Arbitration Clause
      • Remedies for Breach of Export Contract
      Cont….
    • Cont….
      • From top (EXW) to bottom (DDP), the point of transfer in the transport chain moves from the seller’s premises to the buyer’s place.
      • An explanation of each of these with their implications is given below:
      • EXW EX Works (...named place)
      • FCA Free Carrier (...named place)
      • FAS Free Alongside Ship (...named port of shipment)
      • FOB Free On Board (...named port of shipment)
      • CFR Cost and Freight (...named port of destination)
      • CIF Cost, Insurance and Freight (...named port of destination)
      • CPT Carriage Paid To (duty paid) (...named place of destination)
      • CIP Carriage and Insurance Paid to (...named place of destination)
      • DAF Delivered At Frontier (...named place)
      • DES Delivered Ex Ship (...named port destination)
      • DEQ Delivered Ex Quay (...named port of destination)
      • DDU Delivered Duty Unpaid (...named place of destination)
      • DDP Delivered Duty Paid (...named place of destination)