What is required if a British company desires to do business with a foreign company?

International Contracts       

How are most goods transported between different counties?

The majority of international contracts for the sale of goods are conducted by the use of shipping contracts. Many people may assume that most of the goods transferred between different countries in international sale contracts are carried by planes but this is in fact not the case.

What problems can be associated with International sales?

There are a number of potential difficulties and problems which can arise from international sale contracts. More prior investigation is required before completing an international sale contract than a contract which is conducted in one single jurisdiction.

Multiple contracts

In one international transaction there are normally multiple contracts involved. For example a sale and import of grain from one country to another could involve a sale contract, a carriage contract (for the shipping of the goods), an insurance contract and even an international payment mechanism such as a letter of credit. Using a number of contracts will mean that more legal work may be needed and more expense is necessary.

Physical separation of the parties

The buyer and seller in an international contract can often be separated not only by a long distance but also by language barriers. It is a wise decision to use the services of an agent who is perhaps based in the other country and familiar with the other country’s methods. Employing an agent means that there is someone in the other country who is able to investigate further into the prospective company and also investigate the goods themselves. A buyer in an international sale of goods may wish to request that the agent is present when the goods are loaded onto the ship for added protection.

Commercial risk

It can often be very difficult to initially investigate the credit rating of any potential new foreign company.

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For more information on:

  • Political problems
  • International sale contracts
  • Types of international sales contracts
  • Fee on board contracts
  • Cost, Insurance, Freight contracts
  • When does the risk pass to the buyer?
  • Bill of Lading