Foreign trade contract sections of the law. Foreign trade contract and its basic conditions
Entering foreign markets can rightfully be considered a sign of success for a commercial organization. Nevertheless, this event also gives additional work to the lawyers of the contract department: there is a need for competent execution of documents regulating relations with specific foreign counterparties. The main such document is a foreign trade agreement with a foreign counterparty, regulating the relationship of purchase and sale of goods, performance of work, and provision of services.
What is a foreign trade agreement?
A foreign trade agreement is a contract to which the parties have commercial enterprises. place of business- “principal place of business”) in different states. This definition is contained, in particular, in the UN Convention on Contracts for the International Sale of Goods, signed in Vienna (Austria) on April 11, 1980 (hereinafter referred to as the Vienna Convention). For the USSR, the Vienna Convention came into force on September 1, 1991; today Russia has been a party to the Vienna Convention as the successor state of the USSR in the UN since December 24, 1991.
Written form is required
Let us list the general requirements for the form of a foreign trade agreement.
In accordance with Art. 11 of the Vienna Convention does not require that a contract of international sale be concluded or evidenced in writing or be subject to any other form requirement. It can be proven by any means, including testimony. However, the USSR ratified the Vienna Convention with one reservation: “The Union of Soviet Socialist Republics, in accordance with Articles 12 and 96 of the Convention, declares that any provision of Article 11, Article 29 or Part II of the Convention which allows a contract of sale, modification or termination by agreement of the Parties, or an offer, acceptance or any other expression of intention was made not in writing, but in any form, inapplicable if at least one of the Parties has its own commercial enterprise in the Union of Soviet Socialist Republics" (Resolution of the USSR Supreme Court dated May 23, 1990 No. 1511- I). In other words, in Russian Federation the international sales contract must be completed exclusively in writing.
Provisions regarding the written form of a foreign trade agreement, if one of the parties is Russian, are also reflected in the Civil Code of the Russian Federation. So, in accordance with paragraph 2 of Art. 1209 of the Civil Code of the Russian Federation, the form of a foreign economic transaction, at least one of the parties to which is a Russian legal entity, is subject to Russian law, regardless of the place where this transaction was made. This rule also applies in cases where at least one of the parties to such a transaction is a business entity individual(individual entrepreneur), whose personal law is Russian law. In accordance with paragraph 3 of Art. 162 of the Civil Code of the Russian Federation, failure to comply with the simple written form of a foreign economic transaction entails the invalidity of the transaction.
Agreement or contract?
The Civil Code of the Russian Federation and other regulatory legal acts regulating economic activities in Russia contain only the term "contract". Is it possible to call a foreign trade agreement a contract, as is often done in practice?
When making payments under a foreign trade agreement, the instructions of the Central Bank of the Russian Federation play a significant role, since such payments are made by bank transfer. Letter of the Bank of Russia dated July 15, 1996 No. 300 “On “Recommendations on the minimum requirements for mandatory details and the form of foreign trade contracts”” (together with recommendations approved by the Ministry of Foreign Economic Relations of the Russian Federation on February 29, 1996) contains the term "foreign trade contract". Consequently, it can be assumed that a foreign trade agreement is called a contract. But if we call this document in one word, it is preferable to use the term “agreement”.
Contract languages – right to choose parties
Let us now consider the question of the languages in which a foreign trade agreement can be drawn up. This issue arises quite acutely for the parties from time to time, since all parties to the contract are afraid of what in business practice is called English word misunderstanding - incorrect understanding of mutual intentions. The language barrier can only exacerbate such misunderstandings.
Extraction
from the Law of the Russian Federation of October 25, 1991 No. 1807-1 “On the languages of the peoples of the Russian Federation”
(as amended on December 11, 2002)
Article 22. Languages used in the service sector and in commercial activities
2. Office work in the service sector and commercial activities is carried out on state language Russian Federation and other languages provided for in agreements between business partners.
In other words, on the territory of Russia, the parties to an agreement can be guided by a mutual agreement to choose the language in which the agreement will be drawn up. However, it is not prohibited to draw up a contract in several languages.
In practice, among foreign trade agreements, the majority of agreements are those drawn up in the languages of the parties(since such contracts are most often bilateral, they are drawn up in two languages: the seller (performer, contractor) and the buyer (customer)). However, it is traditionally accepted that English is the most widespread, in demand and understandable to all participants in international trade. Therefore, parties to a foreign trade agreement, none of whom have English as their native language, may agree to use it as the third or only language of the agreement, but neither party can impose such a requirement on the other party.
At the same time, it is advisable for the parties to immediately (at the stage of concluding the contract) determine language of correspondence under contract. If the condition on the choice of language for correspondence is not included in the terms of the contract, then, according to the customs of international business, the language of correspondence becomes the one in which the proposal to conclude a transaction was first made.
Here is an example of a clause in a foreign trade agreement regarding the languages in which the agreement is drawn up and the language in which correspondence will be exchanged under the agreement:
|
This Agreement is signed in 2 (Two) copies, each of which is in Russian and English language, and all copies have equal legal force. English will be used for all correspondence and technical information. |
This Agreement is made in 2 (Two) original copies of which each is in Russian and in English, with all variants having equal legal force. English shall be employed in all correspondence as well as in technical information. |
Which language is stronger?
When drawing up a foreign trade contract in two languages (the language of the seller and the language of the buyer), the parties, as a rule, establish that both texts have equal legal force. However, you should not confuse the number of languages in the contract with the number of copies of the contract. If each page of the contract contains text in both languages (rather than a separate copy of the contract in each language), this is one copy of the contract, not two.
It is often difficult to perform an accurate, word-for-word translation from one language to another. Therefore, it is recommended to include in the contract a condition in which language the text has precedence in case of discrepancies or discrepancies between the Russian and foreign versions of the contract. Options are also possible here.
The Principles of International Commercial Agreements (hereinafter referred to as the Principles), developed by UNIDROIT (International Institute for the Unification of Private Law), are advisory in nature, but are recognized as the unification of foreign trade business practices in the field of contractual practice. According to Art. 4.7 of the Principles, if a contract is drawn up in two or more languages and each of its texts has equal force, then in the event of a discrepancy between the texts, preference is given to interpretation in accordance with the version of the text of the contract that was originally drawn up. However, the parties to the contract are not obliged to follow such a recommendation and can independently agree which language will take precedence in such a situation.
Here is an example of a contract clause regarding the language that has predominant meaning:
In the event of discrepancies or any discrepancies in the semantic content of the terms of this Agreement, the text of this Agreement in ________________ language shall prevail.
If a foreign counterparty refuses to sign an agreement in Russian
Russian law does not contain a rule that may oblige a foreign counterparty to sign an agreement in Russian. Moreover, the foreign party’s arguments that it does not intend to sign a text whose contents it does not understand seem quite logical. However, for a number of organizations involved in the further execution of the agreement (for example, for the bank through which payments will be made), it is necessary to provide the text of the agreement in Russian. What to do?
There may be several options:
- try to negotiate with the counterparty to sign the Russian text, placing it on the same sheet with the text in a foreign language in two columns and providing signatures of the parties under each version of the text. Arguments in favor of signing under the Russian text may be a reference to the peculiarities of Russian document flow and the perception by third parties on the territory of Russia of only the Russian version of the agreement;
- insert into the contract a condition that in case of discrepancies between the Russian and foreign texts of the contract, preference is given to the foreign version;
- print the text of the agreement in two copies - Russian and foreign - for each party, while notarizing the translation into Russian from a foreign language;
- initially conclude an agreement only in a foreign language; provide third parties involved in the further execution of the agreement on the territory of Russia (bank, etc.) with an agreement signed in a foreign language, with a notarized translation into Russian.
Which option is preferable should be decided by the parties to the contract themselves by mutual agreement.
How to have a translation of a contract certified by a notary?
The activities of Russian notaries are regulated by the Fundamentals of the legislation of the Russian Federation on notaries (approved by the Supreme Court of the Russian Federation on February 11, 1993 No. 4462-1; as amended on June 29, 2012, as amended on October 2, 2012; hereinafter referred to as the Fundamentals). Certifying the accuracy of the translation is one of the notarial actions (Article 81 of the Fundamentals). The notary certifies the accuracy of the translation from one language to another if he himself speaks the relevant languages. If the notary does not speak the relevant languages, the translation can be made by a translator, whose authenticity of signature is certified by the notary.
The notary is not required to be professional translator from several foreign languages. Therefore, the procedure, if the notary is not qualified as a translator, should be as follows: first, contact the translator (private practitioner or translation agency) performing the translation, then contact the notary who certifies the translator’s signature. Please note that a notary usually works by appointment.
In accordance with the Fundamentals, notarial acts in the Russian Federation are performed by notaries working in a state notary office or engaged in private practice. Notarial actions on behalf of the Russian Federation on the territory of other states are performed by officials of consular offices of the Russian Federation authorized to perform these actions.
For your information. A citizen of the Russian Federation who has a higher legal education, has completed an internship for a period of at least one year in a state notary office or with a notary engaged in private practice, has passed a qualification exam, has a license for notary law, is appointed to the position of a notary in the Russian Federation in the manner established by the Fundamentals. activities (Article 2 of the Fundamentals).
Before contacting a notary, it is advisable to clarify his powers and find out whether the notary’s license is valid.
The register of state notary offices and notary offices engaged in private practice is maintained by the federal executive body exercising control functions in the field of notaries (territorial departments of the Ministry of Justice of the Russian Federation), in the manner established by the Ministry of Justice of Russia. The validity of the license of a notary conducting private practice can also be clarified in non-profit organizations, which are professional associations based on compulsory membership of notaries engaged in private practice. This is the Federal Notary Chamber or notary chambers of the constituent entities of the federation.
For your information. Notary chambers have their own information resources on the Internet: http://www.notariat.ru/ – Federal Notary Chamber; http://www.mgnp.info/ – Moscow City Notary Chamber; http://www.monp.ru/ – Moscow Regional Notary Chamber.
A notarized translation of the contract looks like this:
- the translation is performed based on the original contract or its copy provided to the translator (the contract must already be signed by the parties);
- the translation text is accompanied by a page indicating the last name, first name and patronymic of the translator who carried out the translation from one language to another, as well as the date the translation was completed;
- the translator, in the presence of a notary, signs with his own hand on the page containing his personal data;
- the notary, with his seal and signature, certifies the authenticity of the translator’s signature and indicates registration number entries in the notary register.
The entire translation is stitched. The bound translation is sealed and signed by a notary, indicating total number stitched sheets.
Thus, the notarial act of certifying the translation of a contract is performed according to the rules for witnessing the signature on a document (Article 80 of the Fundamentals). From this we can draw a conclusion about the division of powers of a notary and a translator. The translator is responsible for the correctness of the translation, i.e. for its compliance with the literal meaning and content of the primary document in a foreign language. The notary only confirms that the signature on the translation was made by a certain person.
Despite the fact that the issue of compulsory professional education for a translator remains debatable, it is still recommended to seek contract translation services from a person with such education. A notary, not just certifying the translator’s signature, but testifying to the accuracy of the translation (Article 81 of the Fundamentals), may require from the translator documents on professional education indicating his knowledge of the relevant foreign language.
Many notaries who certify document translations work in close cooperation with translation agencies.
Below are the form of a certification inscription certifying the accuracy of a translation made by a notary (Example 1), and the form of a certification inscription certifying the authenticity of the translator’s signature (Example 2) (Forms No. 60 and 61, approved by order of the Ministry of Justice of Russia dated April 10, 2002 No. 99 “On approval Registry forms for registration of notarial acts, notarial certificates and certification inscriptions on transactions and certified documents" (as amended on 02/16/2009)).
Example 1
Certification inscription confirming the accuracy of the translation made by a notary
Form No. 60
Certification inscription
on certification of the accuracy of the translation,
made by a notary
I, (last name, first name, patronymic), notary (name of the state notary office or notary district), certify the accuracy of the translation of this text from (name of the language from which the text is translated) language into (name of the language into which the text is translated) language.
Seal Notary Signature
Note. In the case of a notarial act being performed by a person replacing a temporarily absent notary, vested with the powers of a notary on the basis of Article 20 of the Fundamentals of the Legislation of the Russian Federation on Notaries, in the forms of notarial certificates and certification inscriptions on transactions and certified documents, the words “notary”, “notary” are replaced with the words “temporarily performing (acting) the duties of a notary" (indicating the last name, first name, patronymic of the notary and the name of the corresponding notarial district).
Example 2
Certification inscription confirming the authenticity of the translator's signature
Form No. 61
Certification inscription
about authentication
translator's signature
City (village, town, district, region, region, republic)
Date (day, month, year) in words
I, (last name, first name, patronymic), notary (name of the state notary office or notary district), certify the authenticity of the signature made by the translator (last name, first name, patronymic of the translator) in my presence. His identity has been established.
Registered in the register under No.
State duties collected (according to tariff)
Seal Notary Signature
Note. In the case of a notarial act being performed by a person replacing a temporarily absent notary, vested with the powers of a notary on the basis of Article 20 of the Fundamentals of the Legislation of the Russian Federation on Notaries, in the forms of notarial certificates and certification inscriptions on transactions and certified documents, the words “notary”, “notary” are replaced with the words “temporarily performing (acting) the duties of a notary" (indicating the last name, first name, patronymic of the notary and the name of the corresponding notarial district).
If a foreign counterparty does not have a seal or the seal looks “non-standard”...
According to Art. 160 of the Civil Code of the Russian Federation, a transaction in writing must be completed by drawing up a document expressing its content and signed by the person or persons entering into the transaction, or persons duly authorized by them. Legislation and agreement of the parties may establish additional requirements that the form of the transaction must comply with (execution on a certain form, sealed, etc.), and provide for the consequences of non-compliance with these requirements. For example, the mandatory seal is established for a power of attorney. For contracts of purchase and sale, performance of work or provision of services - incl. with a foreign counterparty - the seal is not installed as a mandatory detail.
Thus, if the foreign counterparty does not have a seal at all, his signature is sufficient to comply with the simple written form of the agreement.
If the seal looks “non-standard” (bright and unusual ink color in Russian document circulation, the specific content of the print - for example, one word “agreement”, a seal in the form of “squeezing out” an image on paper, etc.), then you can also use the following above the norm of the Civil Code of the Russian Federation: if the contract has the signature of the counterparty, then the simple written form has already been complied with and the contract is considered completed.
Ink matters!
It is useful to notify the foreign counterparty of the preferred ink color of the pen with which he will sign the contract. Despite the fact that in Russia the requirements for filling out documents by hand are not centrally established; moreover, there is no regulation at all about the color of ballpoint pen ink for signing contracts, from Russian practice We can safely designate blue and purple as the “official” ink colors for signing business papers. In some cases, black ink can also be used, however, for inspection authorities, black ink may raise questions about the authenticity of the signature - whether it is a hand signature and not a facsimile or copy.
To summarize, we note that when drawing up any agreement, incl. foreign trade, a greater number of issues are left to the discretion of the parties to the agreement. However, it is necessary to take into account the rules of law on the form of a foreign trade agreement. It is also advisable to follow the recommendations arising from the current practice in our country of working with foreign trade agreements.
K.V. Vasilyeva, Associate Professor of the Department of Entrepreneurial and labor law State University of Education (Moscow), Ph.D. legal sciences
Federal Agency for Education
State educational institution of higher professional education
"CHITA STATE UNIVERSITY"
(ChitSU)
Institute of Retraining and Advanced Training
Department of MTTS
Test
By discipline: Foreign economic activity.
Topic: “Types of foreign trade contracts. Structure and content of a standard foreign trade contract. Monetary and financial conditions of foreign trade contracts."
Completed by: st.gr. OPTS-08-2
Smykalov A.N.
Checked by: Abramova V.Yu.
Introduction.
The objective process of internationalization of the modern world economy requires a new level of multilateral economic relationships, therefore the study of various aspects and forms of foreign economic activity for enterprises and organizations of the Russian Federation is of great practical interest.
“It just so happens that of all areas of the economy of today’s Russia, the most important is foreign economics. This is an elementary fact, easily revealed even from simple figures given in the book. The abolition of the state monopoly on foreign trade and permission for enterprises of any form of ownership to independently enter foreign market, on the one hand, immediately undermined the special isolation and elitism of the sphere of foreign economic activity, accessible only to a narrow circle of privileged individuals. On the other hand, the elements of the unregulated, uncivilized market, which took over foreign economic relations after the actual withdrawal of the state from regulating foreign economic activity, led to the uncontrolled and large-scale sale of irreproducible natural resources Russia at bargain prices and on any terms."
In its turn Russian market turned out to be open to everyone who wants to sell their products, despite their quality and environmental characteristics, as well as to buyers of domestic raw materials, equipment, technology, and energy at prices below world prices.
Relevance of the topic. Currently, many Russian companies are participants international trade. The liberalization of foreign economic policy and the lack of a regulated regime for foreign economic relations have led to a sharp imbalance in export-import transactions and a violation of the mechanism for the return of foreign currency funds to the country. Problems arose in improving foreign economic training of personnel, changing the views of production managers on problems economic development. The ability to work in the market in our country has been raised to the level of one of the areas of economic science.
1. Conditions of a foreign trade contract.
A contract for the sale and purchase of goods in tangible form is called a contract in international commercial practice.
A sales contract is a commercial document formalizing a foreign trade transaction, which contains a written agreement of the parties on the supply of goods: the seller’s obligation to transfer certain property into the ownership of the buyer and the buyer’s obligation to accept this property and pay a certain amount of money for it, or the obligations of the parties to fulfill the conditions barter transaction.
The regulation of the conclusion of a sales contract and the rights and obligations of the seller and buyer that arise from such an agreement are unified in the UN Convention on Contracts for the International Sale of Goods.
Used in foreign trade contracts contain various conditions, characterizing the goods that serve as the subject of purchase and sale, defining the commercial features of the transaction, the rights and obligations of the parties, the mutual obligations of the parties in transactions ensuring the execution of the contract. All contract terms can be classified as follows:
1) from the point of view of their obligation for the seller and the buyer;
2) from the point of view of their versatility.
From the point of view of obligatoryness, the terms of the contract are divided into mandatory and additional.
TO compulsory conditions include:
· names of the parties involved in the transaction;
· subject of contract;
· quality and quantity;
· basic terms of delivery; price
Additional conditions:
· delivery and acceptance of goods;
· insurance;
· shipping documents;
· guarantees;
· packaging and labeling;
· arbitration;
· other conditions.
These conditions are called mandatory because if one of the parties does not fulfill these conditions, then the other party has the right to terminate the contract and demand compensation for losses.
From the point of view of universality, the terms of the contract are divided into individual and universal.
TO individual , that is, those that are unique to one specific contract include:
· names of the parties in the preamble;
· subject of contract;
· product quality;
· quantity of goods;
· Estimated delivery time;
· legal addresses and signatures of the parties.
TO universal conditions include:
· delivery and acceptance of goods;
· basic terms of delivery;
· conditions of payment;
· packaging and labeling;
· force majeure circumstances;
· arbitration.
2. Main points of the foreign trade contract:
1. Preamble. The preamble precedes the text of the contract and begins with the word contract in the middle of the page, followed by the contract number. Below, on the right, the date is written, and on the left, the place where the contract was concluded is indicated. The preamble further clearly states the trade names of the parties. The preamble also defines the parties as counterparties. A clear example The preamble to the contract given in Appendix 12 can serve.
2. Subject of contract . After the preamble there is a description of the subject of the contract and its exact name, characteristics, model, grade, etc. are established. If the product requires more detailed characteristics or the range of goods is wide in name and quantity, then all this is indicated in the annex to the contract (specifications), which is an integral part of the contract, about which a corresponding clause is made in the text of the contract.
3. Quantity . The contract establishes the unit of measurement of quantity, the system of measures and weights.
4. Product quality . Determining the quality of a product in a sales contract means establishing the qualitative characteristics of the product, i.e. a set of properties that determine the suitability of a product for its intended use in accordance with the needs of the buyer. The choice of method for determining quality depends on the nature of the product, the practices that have developed in international trade in this product, and other conditions.
Methods for determining quality:
· according to standard
· according to specification
· according to the sample
· as described
· upon preliminary inspection
· upon release of the finished product
· by actual weight
· Tel-Kel method.
If the contract does not specify a method for determining quality, it is usually considered that the quality of the specified goods must correspond to the average quality that is usual for this type of goods in the country of the seller or in the country of origin of the goods.
5. Transport terms of the contract . Transport is the main link between the seller and the buyer; ultimate goal transportation is the timely arrival of the cargo at its final destination in good condition. When considering issues of cargo transportation for participants in a foreign trade transaction, it is necessary to establish the following:
· what are the basic conditions for the delivery of goods, how, in accordance with them, the responsibilities of the seller and buyer to ensure delivery of the goods are distributed;
· how feedback is provided between the seller and the buyer upon delivery of the goods (notices);
· what type of transport will the goods be delivered, what documents accompany the contract of carriage.
Basic conditions in a foreign trade purchase and sale contract, special conditions are called that define the obligations of the seller and the buyer for the delivery of goods and establish the moment the seller fulfills his obligations for the delivery of goods and the transfer of the risk of accidental loss or damage to the goods from the seller to the buyer, as well as those that may arise in connection with this expenses. The use of basic conditions simplifies the drafting and coordination of contracts, helps counterparties find ways to share responsibilities and resolve disagreements that arise. The International Chamber of Commerce has developed and published collections of interpretations of basic terms, the so-called “International Commercial Terms”.
Of all the basic conditions, FOB and CIF conditions are the most widely used, and in the practice of international trade, the “FOB price” is usually understood as the export price of the product, and the CIF price as the import price.
An equally important issue when concluding a contract is the question of the type of transport. To answer this question, it is necessary to analyze the following factors:
· type of cargo;
· distance and route of transportation;
· time factor;
· transportation cost.
Table 4 shows the classification of INCOTERMS terms by applicable modes of transport.
Table 4.
6.The price of the product . The price for each product is set for a specific unit of measurement. The choice of the unit of measurement for which the price is set is determined by the nature of the product and the practice that has developed in the world market when trading this product.
A foreign trade agreement (contract) is a civil document that defines the terms of a foreign trade transaction. In the Civil Code of the Russian Federation, Art. 420, a contract is an agreement between two or more persons to establish, change or terminate civil rights and obligations. The rules on bilateral and multilateral transactions apply to contracts. General provisions on obligations apply to obligations arising from an agreement, unless otherwise provided by the rules of Chapter 27 of the Civil Code of the Russian Federation and the rules on certain types of agreements contained in the Civil Code of the Russian Federation.
Art. 153 of the Civil Code of the Russian Federation, transactions are recognized as actions of citizens and legal entities aimed at establishing, changing or terminating civil rights and obligations.
When entering into a contractual relationship, the parties determine their rights and obligations, the totality of which constitutes the content of the agreement. By virtue of an obligation arising from a contract, one person is obliged to perform a certain action in favor of another person, and this person accordingly has the right to demand the fulfillment of obligations.
The basis of the legal regulation of contractual relations is the principle of freedom of contract. Persons are free to establish their rights and obligations on the basis of an agreement and to determine any terms of the agreement that do not contradict the law. Civil rights may be limited on the basis federal law and only to the extent necessary in order to protect the foundations of the constitutional system, morality, health, rights and legitimate interests of other persons, ensuring the defense of the country and the security of the state.
All of the above fully applies to foreign trade agreements, with the exception of cases when the content of the relevant terms of the agreement is directly prescribed by law, other legal acts or international agreements. It should be noted that the introduction of a system of currency control over export-import transactions, as well as significant penalties for violating the terms of currency legislation, forced Russian participants in foreign trade activities to take a more careful approach to determining the terms of contracts and pay more attention to collecting information about foreign counterparties.
A foreign trade agreement is considered concluded if the parties reach an agreement on all essential conditions. Essential conditions include: subject of the agreement; conditions directly named in an international treaty, law or other act as essential for a given type of agreement; the conditions under which an agreement must be reached by one of the parties.
In terms of the preparation and execution of international sales contracts, the United Nations Convention “On Contracts for International Sales” is in force, concluded in Vienna on April 11, 1980 (Vienna Convention).
When preparing a foreign economic agreement, it is necessary to take into account the peculiarities of Russian legislation in the field of civil, currency, tax, customs and other legal relations. When Russia joined the Vienna Convention in September 1991, a condition was stipulated that oral contracts would not apply in trade with Russian participants.
In accordance with Russian legislation, it is prohibited to include tax clauses in contracts, in accordance with which a foreign legal entity or individual assumes the obligation to pay taxes of other taxpayers.
The foreign trade agreement should stipulate in what language this document is drawn up, in what language correspondence on it will be conducted, etc. If there is no special instruction, then correspondence is conducted in the language of the party from whom the proposal to conclude the transaction was received.
1. Unified number
A foreign trade contract may have a unified number consisting of three groups of characters formed as follows:
BB/ХХХХХХХХ/ХХХХХ or ЦЦЦ/ХХХХХХХХ/ХХХХХ
The first group of characters - two letters or three numbers correspond to the code of the buyer's (seller's) country according to the Russian classifier of countries of the world, used for customs clearance purposes.
The second group - eight characters indicate the code of the buyer's (seller's) organization according to the All-Russian Classifier of Enterprises and Organizations (OKPO).
The third group of characters - five digits, represent the serial number of the document at the level of the buyer (seller) organization.
2. Date of conclusion of the contract
The date of conclusion of the agreement is the date of its signing by the last party. If the text of the agreement does not explicitly indicate the date of its entry into force, then such a date is considered to be the date of conclusion of the agreement.
3. Place of signing the agreement
Important for legal regulation foreign trade activity, the signing of an agreement takes place, and in certain circumstances this fact may acquire legal significance. The place where the agreement is signed determines the form of the transaction, the legal capacity and capacity of the persons who made the transaction. If the text of the agreement does not indicate the law of which country is applied when considering the dispute, then this will be determined based on the place where the agreement was signed.
4. Subject of the agreement
This section of the contract formulates the subject - an action or set of actions that determine the type and nature of the transaction being concluded.
The same paragraph indicates the object of the contract - the product, its range, size, completeness, country of origin, other data necessary to describe the product, including references to national and (or) international standards, performance of specific work or provision of services.
If goods of different qualities or assortment are supplied, they are listed in the specification attached to the contract and which is an integral part of it.
They also indicate the name of the container or packaging of the goods according to the international classifier, description and requirements for cargo labeling.
When determining the quantity of goods, the contract specifies the unit of measurement and the procedure for establishing the quantity (a firmly fixed figure or within established limits).
The issue of including containers and packaging in the quantity of goods supplied is also discussed; in accordance with this, gross and net weights are determined.
When determining the quality of a product, the contract establishes a set of properties that determine the suitability of the product for its intended use. The quality of a product can be determined by a standard; technical specifications containing detailed technical characteristics of the product, a description of the materials from which it is made, rules and methods of inspection and testing; according to specification; according to the model; according to preliminary inspection; content of individual substances, etc. Usually the product is accompanied by a quality certificate issued by the manufacturer, a certificate of origin.
5. Terms of delivery
This section fixes the basic delivery conditions, determines the delivery date and timing, the batch delivery schedule, and the procedure for delivery and acceptance of goods in terms of quantity and quality.
Basic terms of delivery - conditions that determine the responsibilities of the seller and buyer for the delivery of goods, the moment the risk of accidental loss or damage to the goods transfers from the seller to the buyer.
The distribution of risks, costs and responsibilities between the seller and the buyer is based on the international trade conditions "Incoterms" (Incoterms, International Commercial Terms), developed by the International Chamber of Commerce (ICC), used in international trade practice. The first edition of Incoterms was published in 1936, the latest was published in 2000 and was called Incoterms 2000.
The use of INCOTERMS when concluding foreign trade contracts is characterized by the following features:
from a legal point of view, this document is advisory in nature, therefore the parties to the contract using its terms must make a reference to this document;
the unified delivery conditions contained in INCOTERMS are of a general nature, therefore, in the relevant articles of the contract, the parties must clarify the obligations of the seller and buyer for the delivery of goods;
in contracts, the parties can agree on the use of INCOTERMS earlier versions than the latest edition of 2000 (1936, 1953, 1967, 1976, 1980, 1990), which is stipulated in the contract;
Due to the widespread use of INCOTERMS in the world, when preparing customs documents, the condition in accordance with INCOTERMS is indicated in the column “Delivery conditions”.
Based on the terms of INCOTERMS, the distribution of costs for the delivery of goods between the seller and the buyer is fixed. These costs can amount to up to 50% of the product price. Delivery costs include: preparation for shipment, loading into a vehicle, transportation, transshipment, cargo insurance during transportation, storage of goods in transit, customs duties, etc. In addition, INCOTERMS determine the moment of transfer from the seller to the buyer of the risks of accidental loss and damage goods.
In total, INCOTERMS contains 13 types of basic terms of delivery, which provide for various combinations of costs and risks of the seller and buyer, and are also classified depending on the methods of transportation. Let's briefly consider these conditions.
The first group is E terms (E-terms) - the seller provides the goods to the buyer directly on his premises:
EXW - ExWorks (named point) - Ex-factory (name of place).
In accordance with this condition, the seller is obliged to make goods that meet the requirements of the contract available to the buyer at his factory or warehouse within the time period stipulated by the contract. The buyer bears all costs and risks (including loading at the factory) of transporting the goods from the seller's factory or warehouse to the destination, as well as for customs clearance of the goods for export.
The second group - conditions F (F-terms) - the seller undertakes to place the goods at the disposal of the carrier, which is provided by the buyer:
FCA – Free Carrier (named place) – Free carrier (name of place).
The term “carrier” means any company with which an agreement has been concluded for the carriage of goods by railway, by road, by sea, etc., including multimodal transport.
The seller's obligations under this condition are to deliver the customs-cleared goods to the specified location to the carrier (or the buyer's forwarding agent). The risk of loss or damage to the goods passes from the seller to the buyer upon transfer of the goods to the carrier (forwarder).
FAS – Free Alongside Ship (named port of shipment) – Free along the side of the ship (name of the port of shipment).
The seller delivers when the goods are placed alongside the ship or on lighters at the named port of shipment. From this moment on, the risk of loss and damage to the goods is borne by the buyer. The seller is responsible for clearing the goods through customs for export. This condition used for transportation by sea or inland waterway transport.
FOB – Free On Board (named port of shipment) – Free Board (name of the port of shipment).
The seller delivers when the goods pass the ship's rail at the named port of shipment. From this point on, the buyer bears all risks of loss and damage. The seller is responsible for clearing the goods through customs for export. Applicable only for transport by sea or inland waterway. The contract for the carriage of goods from the named port of shipment is concluded by the buyer at his own expense.
The third group - conditions C (C-terms) - the seller undertakes to enter into a contract of carriage, but without taking on the risk of accidental loss or damage to the goods or any additional costs after loading the goods:
CFR – Cost and Freight (named port of destination) – Cost and freight (name of destination port).
The seller completes delivery when the goods pass the ship's rail at the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the port of destination. The costs of customs clearance of goods for export are borne by the seller. The risk of loss and damage and additional costs once the goods are shipped pass to the buyer.
CIF – Cost, Insurance and Freight (named port of destination) – Cost, insurance and freight (name of port of destination).
The seller completes delivery when the goods pass the ship's rail at the port of shipment. The seller must pay the costs and freight necessary to bring the goods to the port of destination. The risk of loss and damage and additional costs once the goods are shipped pass to the buyer. The seller is obliged to purchase marine insurance in favor of the buyer against the risk of loss and damage to the goods during transportation, i.e. the seller is obliged to conclude an insurance contract and pay insurance premiums. The costs of customs clearance of goods for export are borne by the seller.
CPT – Carriage Paid to (named point of destination) – Freight/Carriage paid to (name of destination).
The seller delivers the goods to the carrier named by him and pays the costs associated with transportation to the specified destination. The buyer assumes all risks of loss and damage to the goods, as well as other expenses after the goods are handed over to the carrier. If transportation is carried out by several carriers, then the transfer of risk will occur when the goods are transferred to the first of them. Customs clearance of goods for export is carried out by the seller. This condition is used when transporting goods by any type of transport, including multimodal transport.
CIP – Carriage and Insurance Paid to (named point of destination) – Freight/Carriage and insurance paid to (name of destination).
The seller delivers the goods to the carrier named by him and pays the costs associated with transportation to the specified destination. The buyer assumes all risks of loss and damage to the goods, as well as other expenses after the goods are handed over to the carrier. If transportation is carried out by several carriers, then the transfer of risk will occur when the goods are transferred to the first of them. Customs clearance of goods for export is carried out by the seller. The seller is obliged to provide insurance in favor of the buyer against the risk of loss and damage to the goods during transportation, i.e. the seller is obliged to conclude an insurance contract and pay insurance premiums. This condition is used when transporting goods by any type of transport, including multimodal transport.
The fourth group of conditions - conditions D (D-terms) - the seller bears all costs and assumes risks until the goods are delivered to their destination.
DAF – Delivered at Frontier (...named place) – Delivery to the border (name of the place of delivery).
The seller has delivered when the goods, unloaded and cleared for export, arrive in a vehicle at the disposal of the buyer at a named place or point at the border before the goods enter the customs border of the adjacent country (not cleared for import). Border – any border, including the border of the country of export. Therefore, the point or place is clearly indicated. The seller bears the risk until delivery. This condition applies if transportation is carried out by any type of transport to the land border.
DES – Delivered Ex Ship (...named port of destination) – Delivery from the vessel (name of the port of destination).
The seller makes delivery when the goods, not cleared for import, are made available to the buyer on board the ship at the named port of destination. The seller bears all risks until unloading. This condition applies only when transported by sea or inland water transport or in mixed transport when the goods arrive at the destination port by ship.
DEQ – Delivered Ex Quay (...named port of destination) – Delivery from the pier (name of the port of destination).
The seller has fulfilled his obligation to deliver when the goods, cleared for import, are placed at the disposal of the buyer on the quay at the named port of destination. The seller bears all costs of transporting and unloading the goods at the pier. This condition applies when transporting goods by sea or inland water transport and in multimodal transport, when the goods are unloaded from a ship to a pier at the port of destination.
DDU – Delivered Duty Unpaid (...named place of destination) – Delivery without payment of duty (name of destination).
The seller provides the goods not cleared for import and unloaded from the arriving means of transport at the named place of destination. The seller is obliged to bear all costs and risks associated with transporting the goods to this place, with the exception of costs for customs clearance, customs payments, etc. The buyer is responsible for paying such costs, as well as other costs and risks associated with this that it failed to clear customs for import in a timely manner. Risks and costs for unloading and reloading goods depend on who controls the selected delivery location. This condition may apply regardless of the type of transport.
DDP - Delivered Duty Paid (...named place of destination) - Delivery with payment of duty (name of destination).
The seller provides the goods cleared for import and unloaded from the arriving means of transport at the named place of destination. The seller is obliged to bear all costs and risks associated with transporting the goods to this place, including the costs of customs clearance, customs payments, etc. This condition can be applied regardless of the type of transport.
Delivery dates and dates, delivery schedule. The term refers to the moment when the seller is obliged to transfer the goods into the ownership of the buyer. The goods can be delivered either at once in full or in parts. The delivery period is established by defining a calendar date or period during which delivery must be made. In addition, it is indicated which date is considered the delivery date - the date of transfer of the goods to the buyer, for example: the date of the transport document (bill of lading, invoice, etc.), the date of the forwarder's receipt of acceptance of the cargo, the date of signing the acceptance certificate by the commission, etc.
The procedure for delivery and acceptance of goods. It is necessary to clearly formulate the procedure for accepting goods in terms of quantity and quality: type of delivery and acceptance, place of actual delivery and acceptance, period, method of quality control, method of accepting goods for quality, method of determining the quantity and quality of supplied goods (sampling or continuous inspection). The goods delivered are accepted at the place at which title and risk of loss or damage passes from the seller to the buyer. For example, when using the EXW condition, acceptance is carried out at the seller’s warehouse, under FOB condition - at the port of shipment.
By type, delivery and acceptance can be preliminary - it involves inspecting the goods from the seller to establish compliance of quantity and quality with the terms of the contract, establishing the correctness of packaging and labeling; final – the actual completion of the delivery at the specified location and on time is verified.
There are two main ways to determine the quantity of goods when it is expressed in weight units: by the shipped weight, established at the point of departure and indicated by the carrier in the transport document (bill of lading, air waybill, railway waybill, etc.); according to the unloaded weight established at the destination in the importer's country. Inspection is carried out by weighing at the time of unloading by persons acting under the authority granted to them by the authorities and chambers of commerce. The results are recorded in the relevant documents.
Acceptance of goods for quality is carried out on the basis of a document confirming the compliance of the quality of the delivered goods with the terms of the contract, as well as checking the quality of the actually delivered goods at the place of acceptance. The quality of the actually delivered goods is determined by analysis, comparison of previously selected samples, inspection, inspection and testing.
The contract determines who will carry out the acceptance - the parties or their representatives jointly, a disinterested monitoring organization appointed by agreement of the parties, etc.
6. Product price and total contract amount
This section indicates the unit price and the total contract amount. When setting a price, the unit of measurement, the price basis, the currency of the price, the method of fixing the price, and the procedure for determining the price level are fixed.
The price basis is determined by the basic delivery condition selected in the contract.
The price established in the contract can be determined in the currency of the country of the exporter or importer, in the currency of settlement or in another currency. The contract specifies the name and currency code of the price, in accordance with the Currency Classifier.
Depending on the method of fixing prices, there are firm, floating, and sliding prices. The fixed price is set at the moment of signing the contract and is not subject to change during its validity period. The price with subsequent fixation is not directly indicated in the contract, but the method of setting the price in the future on a certain date is precisely described, for example, the price is set according to the level of stock exchange quotations on the delivery date or payment date. In contracts for the supply of goods with a long production period (marine vessels, industrial equipment), sliding prices are used, which are calculated taking into account changes in the costs of manufacturing the goods during the contract period. In contracts for which the delivery of goods is carried out in batches, the price can be determined during the execution of the contract, for example, revised for each delivery batch.
When determining the price level, they are guided by calculated and published prices. Published prices are reported in special sources (reference prices, stock quotes, auction prices, bid prices of large suppliers, etc.). Estimated prices are used in contracts for the supply of specific goods, for example, custom-made equipment.
7. Terms of payment (terms of settlement)
The main terms of payment include: currency of payment, terms of payment, method of payment, form of payment.
In addition to the price currency, the contract specifies the payment currency, that is, the currency in which payments under the contract will be made, and indicates the name of the currency and currency code in accordance with the Currency Classifier. It is possible to pay for goods in different currencies: part in one currency, part in another.
If the payment currency does not coincide with the price currency, then the agreement specifies the procedure for converting one currency into another. Typically, recalculation is made at the exchange rate of one currency to another in force in the country of the paying party. This procedure is called a currency clause.
An important point is the establishment of payment deadlines (as well as guarantees of compliance with these deadlines). The contract defines either calendar dates or the period during which payment must be made, as well as the procedure and timing for granting deferred payment (if provided).
This section also indicates the documents transferred by the seller to the buyer, confirming the fact of shipment, cost, quality, nomenclature, quantity of goods, etc.
Particular attention should be paid to the choice of payment method and form of payment. The following payment methods are available:
cash payment, that is, the transfer of funds before or after the exporter transfers documents of title or the goods themselves to the buyer;
advance payment – payment before the goods are transferred to the buyer’s disposal or before the start of the contract (commercial loan to the seller);
deferred payment – payment after the goods are transferred to the buyer’s disposal after a certain period of time (commercial loan to the buyer).
In international trade, the following forms of payment are used: transfer, collection, letter of credit, checks.
International bank transfers are the most common form of payment. With this form of payment, the payer's bank, for a fee, on the payer's instructions, transfers the amount of funds specified in the transfer order to the recipient's (beneficiary's) bank in favor of the specified recipient (beneficiary). When making payments in the specified form, they are guided by international documents: Model Law “On International Bank Transfers”, approved by the UN Commission on International Trade Law in 1992, ICC Guidelines for the International Interbank Transfer of Funds and Compensations of 1990.
Letter of Credit. The importer's bank undertakes, at the direction of the importer and at his expense, to make a payment to the exporter in the amount of the cost of the goods delivered against the exporter's presentation of the documents specified in the letter of credit. Letters of credit can be covered or uncovered, confirmed or unconfirmed; revocable and irrevocable, divisible and indivisible; transferable (transferable), as well as renewable (revolving).
Collection. The exporter transmits an order to his bank to receive a certain amount of payment from the importer against presentation of the relevant documents, as well as bills, checks and other payable documents.
8. Force majeure
As a rule, a foreign trade agreement contains a force majeure clause, according to which the deadline for the execution of the agreement is postponed or the party is generally released from full or partial fulfillment of obligations in the event that, after the entry into force of the agreement, circumstances beyond the control of the parties arise that impede the execution of the agreement. There are also established international customs on this issue, which are published by the International Chamber of Commerce.
9. Dispute resolution procedure
This section defines the procedure for presenting and considering claims unresolved by the parties, the procedure for payments for claims, and the procedure for considering controversial issues in arbitration. It is necessary to clearly indicate in the contract the law of which country will govern these relations.
10. Sanctions (liability)
In this paragraph, the parties establish responsibility for improper fulfillment of obligations, including late payment or delivery, as well as delivery of goods of inadequate quality or quantity.
11. Procedure for changing or canceling the contract
In this section, the parties stipulate the date of entry into force of the agreement, its validity period, the procedure for introducing amendments and additions to the agreement, and other conditions.
12. Details of the parties, signatures, seals
The agreement specifies the full details of the parties: legal and postal address, bank details; positions, names and signatures of the persons who entered into the agreement: The agreement is sealed.
To conduct a foreign trade transaction in accordance with the legislation of the Russian Federation, the importer or exporter must prepare the appropriate documents, obtain the necessary permits, and fulfill the established requirements.
All goods and vehicles transported across the customs border are subject to customs clearance and customs control in the manner and under the conditions provided for by the Customs Code of the Russian Federation. Payments in foreign currency and other currency transactions under foreign trade import transactions are carried out in the manner prescribed by the currency legislation of the Russian Federation and are subject to currency control.
The basis for recording transactions under a foreign trade agreement in accounting are properly executed documents confirming the fact of transactions; such documents include commercial documents received from suppliers, as well as documents provided for by the currency and customs legislation of the Russian Federation.
Commercial documents include:
invoices (commercial accounts) of suppliers;
railway waybills, air waybills, bills of lading and other documents confirming the movement of goods;
acceptance certificates confirming the receipt of cargo at ports and warehouses;
commercial acts drawn up in cases of shortages, damage, etc.;
acceptance acts of forwarders, etc.;
During customs clearance, documents are drawn up according to established forms, the main ones being:
cargo customs declarations (CCD);
declaration of customs value (DTV), etc.;
Documents drawn up in accordance with the established procedure for currency control in authorized banks and the procedure for making payments on customer accounts:
Transaction passport;
Information on currency transactions;
Payment documents (transfer order, letter of credit, etc.).
Before concluding a foreign trade agreement, find out the legal status, financial position and business reputation of the counterparty. Make sure that the lawyers drafting the contract have a good command of the language of your partner's country. Gain a clear understanding of the meaning of terms used in international business.
Nikolay Chudakov,
Director, Editor-in-Chief, legal reference system "System Lawyer"
In this article you will read:
- Important nuances of concluding a foreign trade contract
- Errors in the foreign trade supply agreement
- Sample foreign trade agreement
Error 1. Concluded a foreign trade contract without checking the foreign counterparty
The legal status of a foreign person is confirmed by an extract from the trade register of the country of origin or another document issued in accordance with the legislation of the country of its location (clause 3 of the letter of the Presidium of the Supreme Arbitration Court of the Russian Federation dated December 25, 1996 No. 10).
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Consequences. If it turns out that the foreign counterparty is not registered as a legal entity or the agreement was signed on its behalf by an employee who does not have the authority to do so, then you should expect problems with the execution of the agreement. There is a high risk that the delivery of goods will not take place or will not be delivered on time. An unreliable supplier may deliver goods incompletely or with defects. But you will not be able to make a claim in connection with this (and return the prepayment). It will not be possible to find a foreign partner to serve on him, for example, a claim or lawsuit and summons to appear in an arbitration court.
How to do it right. You can assess the reliability of a foreign counterparty (in particular, check whether the company is really founded and registered in its country) by contacting, for example, chambers of commerce and industry or credit bureaus of the countries of the intended partners.
Most information about foreign companies, including financial ones, is not a commercial secret, so information about them can also be obtained from open sources - address (Jaeger Waldmann International Telex Teletex Directory, Teleurope, Marconis International Register, "Address-Europe") or proprietary reference books (Moodys Industrial Manual, Stock Exchange Official Yearbook), annual reports, prospectuses.
Error 2. Did not check the text of the contract in a foreign language
As a rule, a foreign trade contract is drawn up in two copies and in two languages. Therefore, there is a risk that discrepancies may arise between these texts due to incorrect translation or unclear understanding of the meaning of terms used in foreign trade.
Consequences. If there are discrepancies, the court will decide which text of the contract - in Russian or a foreign language - to apply. And it may turn out that it will be a text in a foreign language. Let me give you an example. A US company rented an office from a Russian landlord. The text of the agreement in Russian contained the wording “All disputes arising between the parties in relation to or in connection with this Agreement are subject to final resolution in the Arbitration Court of Moscow, Russia.”
However, the tenant filed a claim not with the Moscow Arbitration Court (which is part of the system of state courts), but with the International Commercial Arbitration Court at the Chamber of Commerce and Industry of the Russian Federation (ICAC) 1 . As a result, the ICAC decided that it was competent to consider this dispute, since “in the lease agreement in English, which, according to clause 19.2, has priority over the Russian text, the arbitration clause refers not to the Moscow Arbitration Court, but on arbitration in Moscow according to the rules of the ICAC, which is what is taking place in the present proceedings” (decision of the ICAC at the RF Chamber of Commerce and Industry of December 9, 2004 No. 74 / 2004). ABOUT negative consequences for the incorrect name of the court in the contract, see section “Error 4”.
How right. Make sure that the lawyers who review the foreign trade supply agreement are fluent in foreign language, on which the contract was drawn up. In addition, it is advisable to include in the contract a condition that the text in Russian has priority (clause 7.5 in the sample foreign trade contract).
1 Arbitration courts (including the ICAC) are not part of the judicial system of the Russian Federation; they are an alternative way of protecting rights. The basic principle of arbitration proceedings is the voluntary compliance by the parties with the arbitration decision.
Mistake 3. Choosing an unfavorable applicable law or not agreeing on it
Applicable law is the law that is subject to application to the rights and obligations of the parties under the contract (clause 1 of Article 1210 of the Civil Code of the Russian Federation, hereinafter referred to as the Civil Code of the Russian Federation). The parties can choose it themselves. This may be the law of one of the parties to the contract or the law of a third state in which the supplier and buyer are not registered.
Consequences. If the dispute is considered under national law foreign company, then the Russian side finds itself at a disadvantage. After all, she does not know all the features of the law of another country as well as Russian law. As a result, when concluding a contract, and even more so when a dispute arises, the services of more qualified lawyers familiar with the law of the partner country will be required, and often the services of lawyers of the country whose national law is chosen as the governing law. As a result, signing the contract will cost a significantly larger amount.
If the agreement for the conclusion of a foreign trade contract does not indicate the applicable law at all, then the arbitration (regardless of which country it is located) will determine it in accordance with the conflict of laws rules that it considers applicable (Vienna Convention on International Contracts of 1980). purchase and sale of goods, Article 28 of the Law of the Russian Federation of July 7, 1993 No. 5338–1 “On International Commercial Arbitration”). Moreover, these can be norms of both international and national law. Often, conflict of laws rules of different countries indicate that the law of the seller’s country is applicable for an international sales contract. This provision is also contained in Art. 1211 of the Civil Code of the Russian Federation. Thus, if the contract for the import of goods into Russia does not stipulate the applicable law, then general rule it will be the law of the seller's country.
How to do it right. When developing and concluding a foreign trade contract, consider two circumstances. First, ask your lawyers to make such a contract much more detailed than regular contracts with Russian companies. Try to resolve all possible controversial situations in it and fix the rules for their resolution. After all, if it arises controversial situation not regulated by a foreign trade contract, then the law established in accordance with the conflict of laws rule, which the arbitrators consider applicable in this case, will apply. And much will depend on the laws of which country this dispute will be considered.
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Secondly, even in the most detailed contract, you need to indicate the applicable law - in case some situation still remains unresolved (Figure, clause 5.3 of the contract). Try to invite the counterparty to choose Russian law. If he does not agree to this, then even before signing the contract, contact specialists who have experience in working with the law of the seller’s country so that they analyze the text of the contract for possible risks associated with the peculiarities of the legislation of that country.
Additional Information. Even if the parties have agreed that Russian law is applicable, the court will only apply it to those issues that are not regulated by the Vienna Convention on Contracts for the International Sale of Goods.
Mistake 4. Agreeing on an unfavorable arbitration clause
The contract must define not only the law that will be applied in the event of a dispute, but also the court that will hear the dispute (arbitration clause). The parties may appeal to the state court of the seller's country or the buyer's country, or to one of the international arbitration courts. Thus, you must first choose between state and arbitration courts, and then identify a specific court (either a specific arbitration court, or the country whose state court will hear the dispute).
Consequences. An irrational choice of court can lead to unnecessary costs. If the dispute is to be heard in a foreign court, then, firstly, you will need a lawyer who has the right to speak in such a court and is familiar with its procedure.
Secondly, conducting a process in many foreign countries requires more time and costs than considering a case in Russian state courts.
Finally, consideration of a case in an arbitration court has its own characteristics. The process can take several months, but the decision is final and is very rarely challenged in state courts (such a review can only be applied for on procedural grounds, but not if the losing party does not agree with the decision on the merits).
How right. Firstly, you need to correctly name the court you have chosen in the contract - it is important not to make mistakes in the terms. The fact is that in Russia, state courts that consider economic disputes in the business sphere are called arbitration courts (for example, the Moscow Arbitration Court). In other countries and in international law the term “arbitration court” usually means a non-state arbitration court (see section “Error 1”).
Secondly, if you have chosen one of the international arbitration courts, ask the lawyers to check its regulations and include in the text of the contract an arbitration clause exactly in the wording given in the regulations (Figure, clause 5.2 of the contract). This will eliminate the possibility that the case will end up being considered by a court that is not desirable for you.
Error 5. The basic terms of delivery were mixed up
Often the parties to a contract are not familiar with trade practices in different countries. To make it easier for them to develop contracts, the International Chamber of Commerce has compiled a list of the most typical options for their conditions - Incoterms supply bases. In the 2010 edition, there are 11 such options. Four of them are applicable only for marine and inland water transport, and the remaining seven are for any type of transport.
Consequences. Incoterms are applied by agreement of the parties. But if in the contract you refer to the corresponding Incoterms basis, then in the event of a dispute the court will apply it and will not take into account your assurances of ignorance of what this basis means.
How right. Carefully read (preferably with a lawyer) the description of all Incoterms terms and explanations to them. Calculate in advance which conditions will be more profitable for you as a buyer. If you have chosen, for example, the EX Works basis (ex-factory), directly indicate it in the contract, and also write the address of the place from where the buyer is obliged to pick up the goods (figure, clause 1.4).
If the parties change or supplement individual provisions of the selected terms of delivery (Incoterms), then all changed (added) conditions must be set out in detail in the contract. For example, you can specify what costs the parties bear in accordance with the selected delivery basis. Additionally, stipulate who bears the costs of loading and unloading, packaging and labeling of the goods. Clarify at what point ownership rights and the risk of accidental loss of the goods are transferred to the buyer. Then, not the Incoterms rule will be taken into account, but the special provision of the contract (ICAC decision of October 18, 1999 No. 385 / 1998).
Error 6. The edition of Incoterms was not specified
Consequences. If the contract does not indicate which edition of Incoterms you are using (or the name of the delivery basis and edition is incorrectly indicated), a controversial situation may arise.
Firstly, some of the bases were replaced. For example, in Incoterms 2000 there were bases DAF, DES, DEC, DDU. In Incoterms 2010 they are not present, instead DAT and DAP appeared. Therefore, if you write in the contract, for example, “Incoterms 2010 DAF,” then the court will have a question: what basis did the parties have in mind—whether the DAF basis from Incoterms 2000, or one of the new DAT or DAP bases in Incoterms 2010.
Secondly, when referring to a specific basis of Incoterms 2010, it is worth clarifying how it is formulated in this particular edition. The fact is that some delivery bases have changed slightly. In particular, one change was made to the FOB (free on board) basis. In the Incoterms 2000 edition, the seller's obligation to transfer the goods was considered fulfilled (and the risk of loss or damage to the goods passed to the buyer) at the moment of crossing the ship's rails, and in the 2010 edition - at the moment the goods were placed on board the ship.
How to do it right. In the contract, be sure to write down which edition of Incoterms you use. If you are referring to any of the old bases, indicate the edition in which it is used and the base itself, for example, “Incoterms 2000 DAF”. Then, in the event of a dispute, the 2000 edition will apply.
Additional Information. In the terms of the letter of credit, it is necessary to indicate what mandatory details the documents submitted to the bank must contain (name of the document; who issued or certified the document; main points in the contents of the document; language of the document - Russian, English, etc.); number of copies of originals and copies of such documents.
Error 7. The contract did not contain a complete list of documents
As a rule, sellers refuse to deliver without a guarantee, and the buyer refuses to pay for goods without actual delivery. Therefore today the majority Russian companies conclude foreign trade contracts with a form of payment such as a letter of credit. It excludes non-compliance with the conditions of both the supplier and the buyer.
With the letter of credit form of payment, the bank, at the direction of the buyer, undertakes to transfer money to the seller when he presents certain documents to him. The list of such documents is agreed upon by the buyer and seller in advance. Thus, a letter of credit allows the buyer to avoid the risks associated with making an advance payment: the money will be transferred to the seller only after the actual delivery of the goods; if delivery does not take place, the money will be returned within a predetermined time frame; the delivered goods will be of appropriate quality, in the agreed volume and assortment.
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Consequences. If the contract contains an incomplete or incorrect list of documents submitted to the bank, there is a risk that the seller will receive payment even if the goods have defects. For example, if the list of documents does not include a quality certificate, the bank will not be able to request such a certificate from the seller and will transfer payment to him based on the remaining documents. You, of course, will be able to make a claim to the seller if the product is defective, but it will take more time. In addition, you will have to demand that the seller return the funds already transferred to him.
How to do it right. A foreign trade contract must contain full list and an exact description of the documents that the seller must submit to the bank in order to receive payment. In particular, these are documents confirming the actual delivery of goods, their quality, quantity and range. Then, if the seller is unable to confirm e.g. proper quality goods, he will not receive payment from the bank.
Information about the author and company
Nikolay Chudakov specializes in tax and civil law. Graduated from the Faculty of Law of the State University Higher School of Economics. He worked as editor-in-chief of such professional publications as “Arbitration Practice”, “Tax Disputes: Theory and Practice”, “Documents and Comments”. Author of the books “Algorithms for winning a tax dispute: how to win against the inspectorate on procedural grounds” and “10 precedents on rental disputes.”
YSS "System Lawyer"- the first legal reference system of practical explanations from judges. Official website - www.1jur.ru