1. What is a foreign trade contract?
Regarding terminology, Contract for the International Sale of Goods has many different names in Vietnamese, for example: Foreign trade sale contract; International sales contract; Import-export contracts; Foreign trade contracts; International commercial contracts. No matter how they are called, they have the same content.
An international sales contract is a written agreement between a buyer and a seller with places of business in different countries or with different nationalities, whereby the seller is obliged to transfer ownership of the goods. to the buyer and receive money, and the buyer has the obligation to receive the goods and pay for the goods.
Foreign trade contracts are also signed on the principle of economic contracts, that is: freedom of contract, one of the basic contents of freedom of business, expressed by:
Principle of voluntariness : This means that the signing of foreign trade contracts is based on the principle of freedom of will of both parties, no agency, organization or individual can impose their will. for the parties to the contract.
– Principle of equality and mutual benefit : The purchase and sale contract relationship between the parties must be established on the basis of compatibility of rights and obligations, ensuring economic benefits for the parties.
– Principle of material self -responsibility : This means that the parties to the contract must be responsible for property related to contract fines and compensation for damages when violating the contract . No one else can assume material responsibility on behalf of the parties to the contract.
– Not contrary to current law : This means that contractual agreements must be in accordance with the law, and must not take advantage of the contract to operate illegally .
2. Characteristics of foreign trade contracts
Compared with domestic trade contracts, foreign trade contracts often have the following characteristics:
First , because the buying and selling parties have business headquarters in different countries or have different nationalities, most of the purchased goods are moved across national borders, except for a part of the purchased goods. sales between enterprises in export processing zones and enterprises outside export processing zones. This sales contract is considered a foreign trade contract, but the goods do not leave the national border.
Second, the payment currency can be the buyer’s country’s currency, the seller’s country’s currency or the currency of a third country, so there is potential exchange rate risk (domestic trade contracts are always paid in local currency, so the risk is Exchange rate risk does not arise).
Third , the buying and selling parties have business headquarters in different countries or have different nationalities. Except for contracts between inside and outside the Export Processing Zone, this is considered the most important feature of a foreign trade contract, it shows the international nature of this contract.
3. Form of foreign trade contract
Regarding contract form: The contract must be in writing and can be signed directly or indirectly:
Direct contract : This is where the two buying and selling parties meet directly to agree on the terms and conditions of the contract . After reaching agreement, the parties sign the contract and from that point on, the contract begins to take legal effect.
Indirect contract : Is the signing of a contract, but the two parties do not directly meet each other , but only send letters, telegrams, emails… expressing the content of the transaction leading up to the contract . Indirect contracts include:
Offer + Acceptance = Contract signed
Order + Order confirmation = Signed contract
Thus, a foreign trade sales contract is not necessarily made up of a single document and does not necessarily have two signatures of the buyer and the seller .
