Mistakes in foreign trade contracts
A mistake in a foreign-trade contract costs more than it seems: it leads to a delay at customs, a currency-control penalty or a dispute with the counterparty. Let us break down the typical mistakes and how to avoid them before signing.
Why mistakes are costly
The contract is the basis of the whole deal: by it customs value is calculated, payments are made and currency deadlines are controlled. One inaccuracy can block the release of goods or lead to fines. So the contract is checked before signing, not after.
Mistake 1: vague subject and specification
If the goods are described in general terms, customs cannot reconcile them with the invoice and the UKT ZED code. A clear specification is needed: name, characteristics, quantity, units, price per unit. A vague subject is the first cause of questions at the border.
Mistake 2: wrong or missing Incoterms
The delivery basis determines the distribution of costs and risks and affects customs value. A common mistake is specifying FOB for a container or not specifying the geographical point. How to choose the term is shown by Incoterms 2020.
Mistake 3: no currency deadlines and payment terms
Under currency supervision there are deadline limits for settlements on export and import. If the contract has no clear payment terms and delivery deadlines, there is a risk of penalties for violating the deadlines. The general rules are in foreign trade regulation.
Mistake 4: discrepancies with the invoice and documents
The goods name, price, weight and terms in the contract and invoice must match. Any discrepancy is treated by customs as grounds for additional checks and value adjustment. Consistency of the set matters no less than the text itself.
Mistake 5: no force majeure and arbitration
Without a force majeure clause and without specifying the applicable law and the place of dispute resolution, the company is left defenseless in a conflict. These sections seem formal until a dispute arises.
Mistake 6: quality and claims not spelled out
If quality requirements, the acceptance procedure and claims are not described, it is hard for the buyer to assert rights in case of defects or short delivery. The structure of such sections is shown by sections of the sale contract.
Checking checklist
| Section | What to look at |
|---|---|
| Subject | Specification, quantity, price per unit |
| Basis | Correct Incoterms and point |
| Payment | Deadlines, currency, terms |
| Protection | Force majeure, arbitration, law |
| Details | Accounts, addresses, contract language |
How to check the contract
Before signing, the contract should be reconciled with the invoice, the basis and currency deadlines checked, and it confirmed that there are sections on quality, force majeure and arbitration. We carry out contract expertise as part of the foreign-trade contract drafting service.
Frequently asked questions
Contract check with Trans-Hope
Trans-Hope checks a foreign-trade contract for typical mistakes: specification, basis, currency deadlines, protective sections and consistency with documents. Send the draft contract — we will point out the weak spots before signing.
