Commercial activities. Types of contract

Foreign trade comprises three main activities: importing (i.e. buying goods from foreign Sellers), exporting (i.e. selling goods to foreign Byers) and re-exporting (i.e. buying goods from foreign Sellers and selling them to foreign Buyers without processing in one’s own country).

All commercial activities in foreign trade may be divided into basic ones associated with the conclusion of foreign trade contracts for the exchange of goods and auxiliary ones ensuring their successful performance, i.e. associated with carriage of goods, their insurance, banking operations (financing the deals, settlement of payments between the Sellers and the Buyers, guaranteeing the strict observance of their mutual liabilities), as well as Customs and other activities. Conclusion of agency agreements with the Suppliers for export goods and with Importers for the purchase of goods, agreements with advertising agencies and firms dealing with the market research and with other organizations helping to achieve the targets set for foreign trade also refer to auxiliary activities.

According to Ukrainian law contracts must always be made in the form of duly signed documents containing the terms of an agreement between two firms or associations called counterparts (or parties) to supply goods or services as a rule at a fixed price.

Agreements and contracts concluded by the Ukrainian Trade Representations are to be signed by the Trade Representative or his Deputy (first signature) and by an official of the Trade Representation specially authorized to sign agreements and contracts (second signature).

Agreements and contracts made in our country are to be signed by Director General of the foreign trade association or his deputies (first signature) and by directors of firms or their deputies (second signature). Sometimes senior engineers of the firms are legally authorized to sign these documents.

In international trade contracts of sale, contracts for construction work (very often for the delivery, erection and commissioning of the equipment for industrial enterprises) and lease are most frequent among a variety of basic deals. Contracts of the sale include turnkey contracts and large-scale contracts on a compensation basis. There may also be barter deals and compensatory deals.

To ensure the fulfillment of the above basic contracts successfully and profitably, a number of auxiliary agreements (contracts) are to be concluded: Marine Insurance Policies or Certificates, Charter Parties, Agency and Distributorship agreements and so on.

A written contract of sale is made out in the form of a document signed both by the Buyers and the Sellers.

When there is no necessity of introducing special terms and conditions into the contact of sale, Ukrainian associations use standard forms of contracts containing the following clauses:

1. Date of the contract (time).

2. Subject of the contract and volume of delivery.

3. Prices and total value.

4. Terms of delivery.

5. Terms of payment.

6. Transportation.

7. Names of the Parties.

8. Sanction and compensation for damage.

9. Insurance.

10. Arbitration, etc.

In the case of a contract for sophisticated machinery and equipment there may by other clauses: technical conditions, test and inspection conditions, requirements to technical documentation, supervision of erection and putting the machinery into operation (commissioning), and sending specialists for the purpose, training of the Buyers’ specialist, the Sellers’ obligations for technical servicing and the like. These clauses may be included in the contract itself or in the Appendices to the contract which are an integral part of it.

Дата добавления: 2014-11-25