INTRODUCTION

There are several key matters that need to be agreed upon by a buyer and a seller in an international sale of goods transaction. It will be seen that each of the issues discussed below will frequently involve obligations on the part of both parties. The important areas for agreement could be listed as follows:

• the identity of the parties

• the description of the goods

• time and place for delivery of the goods

• transport arrangements for the goods

• inspection of the goods by the buyer

• the price and how the price is to be paid

• the passing of title in the goods from seller to buyer

• the respective obligations of the parties if unforeseen events make performance impossible

• the law that will apply to the contract

• the type of dispute resolution mechanism that will be used.

Firms that have been engaged in international business transactions for many years will most likely have developed a standard form of international contract of sale that is forwarded to a potential buyer. The terms and conditions are likely to contain much more than the basic terms and conditions listed above. For example, there may be detailed provisions to provide for delay in delivery, such as requiring the seller to pay damages for each day delivery of the goods is delayed. In addition, there might be a provision that the buyer will pay interest for every day in which they are late with payment after the due date if payment is made after the goods are received.