GENERAL CONDITIONS IN EXPORT CONTRACTS : Export contract refers to the subject matter of the contract. In addition, the contracts also mention the rights of the party concerned against the party which may have failed to honour his contractual obligations, except under some valid reasons. The movement of goods in export transactions involve risk and costs. The goods may get lost, stolen or damaged during transit. The contract inputs specify who will bear this risk and upto what point. Similarly, physical movement of goods will mean costs. Whose responsibility wills it be to bear these costs ? These issues are to be resolved through contracts.
Most exporters have developed standard general conditions of exports to be incorporated in an export contract It simplifies the day-to-day export operations. It also reduces the possibility of missing out some important aspect, each time a contract is drafted. The complexity of the general conditions depends upon what is being exported. If the product is standard, such as garments, handicraft or light engineering goods, a simple set of general conditions will suffice. On the other hand, a contract for the sale of petrochemicals plant may run into hundreds of pages. For a majority of products being exported from India, the following aspects should be covered under the general conditions:
1. The parties
2. The description of the products
3. Quality
4. Price per unit
5. Total value
6. Currency
7. Tax and Charges
8. Packing
9. Marking and Labelling
10. Mode of Transport
11. Delivery : Place and Schedule
12. Insurance
13. Inspection
14. Documentation
15. Mode of Payment
16. Credit period, if any
17. Warranties
18. Passing of Risk
19. Passing of property
20. Availability non-availability of Export-Import Licences
21. Force Majeure
22. Settlement of Disputes
23. Proper Law of the Contract
24. Jurisdiction
Indian Council of Arbitration which has been set up by the Ministry of Commerce. Government of India has developed a Model Contract form for the benefit of Indian exported. This model is appropriate for most small and medium enterprises exporting standard products.