In international trade, the terms and conditions of sale are best achieved by free negotiation. Exporter and importer should negotiate and agree on all issues and to fix way forward. For instance, when it comes to method of payment, both parties should debate and agree on most suitable payment mode considering their cash safety and also burden of cashflow. When it comes to issue of quality assurance, the parties should agree on the best mechanisms to ensure only right quality and quantity is shipped. This could be achieved by nominating an inspection company such as BV or SGS to inspect and certify the cargo prior to shipment. Once these and many other issues have been agreed, the parties sets it on a sales contract which is the legally binding document covering international sales. Its worth noting, fair negotiations require both parties to be well versed and experienced in international trade which is not always the case. We are gifted differently and entrepreneurs are not necessarily experts in international trade or finance. Most tend to specialists and experts in other fields. Alternatively, parties may simply chose to minimize negotiations by selecting a favorable INCOTERM to govern their transaction. INCOTERMS are a product of international chamber of commerce in a bid to ensure smooth flow of trade. INCOTERMS 2010 simplifies the process by clearly detailing duties and responsibilities of both buyers and sellers under each term. I advise all those engaged in international transactions to try and get information on the same Have a lovely weekend
Posted on: Sat, 23 Aug 2014 05:04:53 +0000
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