Foreign Trade Contract for Cargo Transportation: Key Aspects

A foreign trade contract is a special agreement between a supplier and a client from different countries regarding the exchange of goods/services to regulate trade relations. The contract defines the terms and rights of the parties involved.

Characteristics of an FET Contract:

• Companies entering into transportation contracts are subject to the jurisdiction of and operate within different states;
• The contract concerns goods crossing customs borders;
• Payments are made in foreign currency through authorized banks, following rules set by the national bank of the country.

Thus, a foreign trade contract forms the fundamental basis for international trade, ensuring legally regulated trade relations between parties from different countries.

Contract Drafting Rules

International trade relations are governed by the Law of Ukraine on Foreign Economic Activity. Legislation does not impose strict requirements on the conditions for drafting FET contracts. Therefore, the contract is concluded in a simple written form, with entities in foreign economic activity complying with the imperative norms of Ukrainian law and international agreements.

An FET contract is drawn up in an arbitrary written form and regulates the conditions and responsibilities of both parties.

Sample and Structure of the Contract

The contract's task is to make all agreements between the parties transparent. The structure of a contract for goods delivery consists of the following points:

• Name, number, date of conclusion;
• Preamble, indicating the main points of the agreement, full and abbreviated names of the parties, their addresses;
• Subject of the FET contract, specifying which goods (services) one party supplies to the other, with a description and characteristics of the cargo or the content of the service;
• Price per unit and total cost per batch;
• Payment terms;
• Term of the contract, conditions for termination or extension;
• Guarantees and liability for breach of contract terms;
• Force majeure circumstances;
• Full addresses and contact details of the parties, signatures of authorized parties, imprint of the seal.

A sample of a foreign economic contract for transportation between a supplier and a client

A sample foreign trade contract for transportation between a supplier and a client should include additional sections:

• Terms and delivery deadlines;
• Price and currency of settlements;
• Terms of liability for cargo loss or damage, insurance coverage;
• Appendices (packaging and protection instructions, technical specifications of the cargo and its completeness, nuances regarding customs clearance procedure).

Correctly drafting a transportation contract allows parties to avoid misunderstandings, conflicts, and unforeseen situations during cargo transportation organization.

Possible Difficulties If the Contract Is Incorrectly Drafted

If you are a novice entrepreneur, the specifics of international procurement may confuse you. Missing data in the contract leads to difficulties.

For successful contract drafting, it is important to consider all aspects and collaborate with qualified professionals.

The DiFFreight team is ready to provide experienced lawyers, logisticians, procurement specialists for the drafting of foreign trade contracts for delivery. With us, organizing international cargo transportation will be straightforward and clear.