How to write an international contract

What better way to learn about a new subject than to materialize theory. So, let's do it. In this post I will try to explain how to write an international contract.

Let's start by assuming that the companies XXXX (Spanish) and YYYY (Japanese) decide on the purchase and sale of any good (product), and that, therefore, we are faced with a international transaction. The legal framework for this operation will, therefore, be the 1980 Vienna Convention on the International Sale of Goods (CISG, Convention of International sales of goods). This legal instrument regulates the formation of the sales contract, the rights and obligations of companies belonging to the Member States that acceded at the time (like Spain and Japan). But, the CISG is not alone in the complex scenario of international transactions; There are instruments directly related to it such as INCOTERMS 2020 (prepared by the International Chamber of Commerce), the Uniform Rules and Practices relating to Documentary Credits 2007 or the UNIDROIT principles of 1995 on international commercial contracts, among others.

From all of them it follows that every international sales contract must include three premises: consent, object and cause; although according to article 14 of the CISG its form is free, as long as it complies with the acceptance and offer. And, the obligations of buyer and seller, as we can guess, are the same as in a national contract: the delivery of the merchandise and the documents related to it and the transfer of ownership, on the one hand; and the payment of the price and the receipt and examination of the merchandise, on the other.

So, how would you draft an international sales contract?

Obviously, the situation we are facing would have to be studied very carefully and in detail and the contract drafted accordingly; Therefore, the following contract model It can only serve as a generalized example from which to start., and never as a template on which to modify data. Knowing this and starting from this preliminary, I leave it here!

This international sales contract is entered into between XXXX with registered office in Tokyo, Japan, since 1996 (hereinafter referred to as "the Buyer") and YYYY with registered office in Madrid, Spain, since 2009 (hereinafter referred to as "the Seller"). The representative of the Buyer is Mr. FFFF, general manager of the company, with social security card number: 5555555; and of the Seller is MMMM, general manager of the company as well, with national identity card number: 333333 

Both parties declare that they are interested in the purchase and sale of the goods that are the subject of this contract and undertake to comply with the following agreement. 

statements

ON THE ONE PART, THE BUYER DECLARE THAT: 

I.- According to the articles of incorporation of XXXX, it is a company legally established under Japanese law.

II. The corporate purpose of the company is the sale and import of (PRODUCT), among others. 

III. The BUYER has the capacity, knowledge, experience and adequate personnel to carry out the activities referred to in the previous statement.

IV. Mr. FFFF is his legitimate representative and, consequently, is duly authorized to sign this contract and bind his representation under the terms thereof.. 

V. The BUYER is domiciled in Tokyo, Japan. The same one that indicates for all legal purposes. 

ON THE OTHER HAND, THE SELLER DECLARE THAT

I.- According to the articles of incorporation of YYYY, it is a company legally constituted in accordance with Spanish legislation.

II. The corporate purpose of the company is the sale and export of (product), among others. 

III. The SELLER has the capacity, knowledge, experience and adequate personnel to carry out the activities referred to in the previous statement..

IV. Ms. MMMM is her legitimate representative and, consequently, she is duly empowered to sign this contract and obligate her representation under the terms thereof.. 

V. The SELLER is domiciled in Madrid, Spain. The same one that indicates for all legal purposes. 

BOTH PARTIES DECLAREEVEN WHAT: 

They are interested in carrying out the commercial operations to which this contract refers, in accordance with the previous statements and the following: 

Contract clauses

FIRST. OBJECT OF THE CONTRACT. Through this instrument, the seller agrees to sell and the buyer to acquire (product number). 

SECOND. DELIVERY CONDITIONS. The INCOTERM 2020 that applies is FCA (Free Carrier). Then, the SELLER will deliver the merchandise to the carrier indicated by the BUYER. In this case, it will be DDD in the port of Barcelona. In addition, the SELLER must deliver the commercial invoice in accordance with the sales contract, obtain the necessary authorizations to export, carry out packaging and pre-shipment inspection, and carry out customs procedures to export; inter alia. 

The BUYER will obtain the necessary import licenses or other authorizations and carry out the customs procedures for importing and transporting the merchandise, as well as paying for mandatory pre-shipment inspections. In addition, the BUYER will contract transportation from the place of delivery of the merchandise. It will communicate to the exporter, with due advance notice, the name of the carrier or other person designated to collect the merchandise; as well as the mode of transport, the specific date and the collection point. 

THIRD. PRICE AND PAYMENT. The price of the merchandise object of this contract is 5.000.000 EUROS (€). And the buyer agrees to pay it. Payment must take effect 60 days after shipment through an irrevocable documentary credit that will be issued by a first-class banking entity. In accordance with this contract, the buyer undertakes to carry out the corresponding procedures for its cancellation under the indicated conditions. 

QUARTER. PACKAGING OF THE GOODS. The seller undertakes to deliver the goods that are the subject of this contract at the place indicated in the third clause, complying with the following specifications. Each (product) must be well packaged and will occupy the necessary containers. 

FIFTH: DELIVERY DATE. The (products) will be delivered before October 10, 2021. 

SIXTH. VALIDITY OF THE CONTRACT. This contract will take effect from the day of its signing. Both parties agree that it will end once the seller delivers the goods agreed in the first clause and the buyer complies with each of the obligations stipulated in this instrument.. 

SEVENTH. OBLIGATIONS OF THE BUYER AND SELLER AND SUBSISTENCY OF THE OBLIGATIONS. The termination or termination of this contract does not in any way affect the validity and enforceability of the obligations previously contracted. The termination does not affect the validity of the obligations contracted by their nature or provision of the law, or by the will of the parties, which must be deferred to a later date.. 

OCTAVE. RESOLUTION FOR NON-COMPLIANCE. In accordance with articles 49.1 and 64.1 CISG, if one of the parties breaches the contract and does not repair it within a period of 10 days from the other party becoming aware of the breach, the other party may terminate the contract.. 

In the event that the SELLER cannot fulfill the contract due to the impossibility of manufacturing the goods, it may acquire them and send them by a third party, who will not give the details of the Japanese buyer..

The party exercising its right to terminate the contract must notify the other party once the period to correct the error has passed. 

NOVENA. LACK OF CONFORMITY OF THE GOODS. In accordance with articles 37 and 48 of the CISG, the SELLER guarantees to the BUYER that the goods supplied are free of defects or manufacturing defects. Therefore, the SELLER undertakes to replace or repair any defective goods. But the BUYER must report the status of the merchandise within a maximum period of two months from receipt of the merchandise at destination. Goods damaged by the negligence of the BUYER will not have this guarantee. 

TENTH. TRANSFER OF RIGHTS AND OBLIGATIONS. Neither party may assign or transfer all or part of the rights or obligations derived from this contract, unless previously agreed in writing.. 

ELEVENTH. DISPUTE RESOLUTION. The parties agree that any controversy or claim arising from or related to this contract, or its breach, will be resolved by arbitration in Madrid, with Spanish law applicable.. 

TWELFTH. APPLICABLE LAW AND JURISDICTION. This contract will be governed by the United Nations Convention on contracts for the international sale of goods and, failing that, by the commercial uses and practices recognized by it. The jurisdiction will be that of Spain. 

THIRTEENTH. TAXES. The BUYER and the SELLER will pay the taxes derived from this contract.  

FOURTEENTH. LANGUAGES. The full text of the contract and the documentation derived from it, including the ANNEXES, have been written in Spanish, English and Japanese. 

Both parties sign this contract in proof of their agreement. 

(Signed)

I hope I have helped you!