An export contract is not to be feared for being long, but for missing items. These 9 clauses are the baseline; miss one and problems can arise in later stages.
1. Product name and specifications
State the product name, model, material, grade and use clearly.
The product name must be consistent with the customs declaration and the letter of credit; the same batch of goods cannot appear under three different names.
2. Quantity and more-or-less clause
State the quantity, unit of measurement and total number of packages clearly.
For bulk cargo, a more-or-less clause may be agreed, allowing a certain range of quantity variation, with the specific range agreed by both parties.
3. Price and trade term
State the unit price, total price and currency.
The trade term must carry the version number and the named place, for example "FOB Shanghai, Incoterms 2020".
4. Payment method
Choose one or a combination of T/T, L/C, D/P, D/A and O/A.
If L/C is used, state the issuing bank, time of issuance, type of letter of credit and validity period.
Writing only "T/T or L/C" is as good as no agreement; at the performance stage either side can push back.
5. Packaging and marks
State the packaging method, material, number of packages, weight and volume per package.
The marks (shipping marks) include the consignee code, destination and package number, and must be consistent with the packing list.
6. Shipment clause
The shipment period, port of shipment and port of destination must all be stated.
At the same time, make clear whether partial shipment is allowed and whether transhipment is allowed.
7. Documentation clause
List which documents the buyer needs, how many copies of each, and whether originals are required.
Common ones include: commercial invoice, packing list, bill of lading, certificate of origin, insurance policy and inspection certificate.
8. Quality and inspection
By what standard the inspection is done, by whom, and at which stage.
Make clear whether the inspection report serves as the basis for payment or claims.
9. Dispute resolution
Which country's law applies, whether arbitration or litigation, and where the arbitration seat is.
Without this clause, when a problem arises there is not even a place to assert your rights.
Nine-clause quick reference table
| Clause | What must be stated clearly |
|---|---|
| Product name and specifications | Product name, model, material, grade |
| Quantity | Quantity, unit, number of packages, more-or-less range |
| Price | Unit price, total price, currency, term with version and place |
| Payment method | Method, timing, L/C requirements |
| Packaging and marks | Packaging method, material, mark content |
| Shipment clause | Shipment period, port of shipment, port of destination, partial shipment and transhipment |
| Documentation clause | Types of documents, number of copies, original or copy |
| Quality inspection | Standard, inspecting party, effect of the report |
| Dispute resolution | Applicable law, arbitration or litigation, place |
Four pitfalls that are easy to fall into
The product name is written inconsistently on the contract, invoice and customs declaration, and customs clearance gets stuck right away.
Only the term abbreviation is written, without the version number and named place.
The payment method is written as "or", which is as good as leaving a loophole.
Without a dispute resolution clause, there is no way to assert rights when a real problem arises.
