05/ 09/ 2005
by Jeffrey Moses
When establishing a relationship with a new company for which you will export goods, a written, binding contract should be drawn up between you and authorities of the company. The central purposes of such a contract are to bind your rights to export the company's goods and to define financial and operational details. Always have an attorney with experience in the field draw up the contract. Once you have the contract, you can easily and relatively inexpensively modify it for other companies you represent.
The basis of an exporting/importing contract should include:
- Exclusive rights to you for distribution of the company's goods to specific countries and/or regions of the world. Countries to which the company already exports should be designated. Normally, rights to these countries would not be allowed to you, but in some instances the company could benefit from your cost efficiencies and would allow you take over export to these countries.
- Price quotes on goods to be exported. Also, length of advance notice for all price increases/decreases in future.
- Commissions to you, or amounts to be paid to you above the company's designated prices for goods. How these commissions or payments will be determined is an integral part of the contract.
- Duration of the contract, in years.
- Cancellation terms of the contract. Also, when cancellation takes effect after giving notice.
- Means by which disputes between you and the company will be settled (arbitration, mediation, etc.). Also, locations where settlement will take place (city and country).
- Methods of shipping. Normally, the exporter pays for shipping and all duties, but these are negotiable.
- Insurance for goods during shipping and installation, when applicable.
- Responsibilities for installation, if applicable.
- Your rights to assign or delegate responsibility, powers or payments.
- All required powers of attorney for operations in the various countries involved.
It's also important to have a contract with companies on the other side of your exporting business (i.e., companies to which you are selling goods). When setting up a sale to a company operating in a foreign country or countries, you'll need to have a binding contract that includes:
- Purchase price and quantity
- Exact description of goods (manufacturer names, model numbers, additional features, dimensions, weights, colors, etc.)
- Date of shipment and arrival
- Unusual details of shipment or installation
- Penalties for late arrival
- Penalties for non-payment for agreed-upon purchases
- Means and locations by which disputes may be settled
- All required powers of attorney
