At the same time as signing an export trade agreement, it is crucial to define the key terms and design risk prevention mechanisms.

10 key principles to be clear.

1. Information of Both Parties

• The companys full name, registered address, legal persons representative, and contact method, to avoid disputes about the performance due to ambiguity of the subject.

2. Product Description

• Specification of ParametersMaterial, size, color, model (Avoid using only blurred expressions of delivery by sample).
• Quality StandardsReference to international standards (such as ISO), industry standards or buyer technical agreements, indicating testing methods (such as SGS sampling).

3. Price Terms

• Determine the single price, total price, currency (recommended to agree on the distribution of exchange rate fluctuation risk).
• Trade termsAdopt the latest version of Incoterms? (such as FOB Shanghai, CIF Rotterdam, etc.) to define the transfer points of costs and risks.

4. Payment Terms

• The forwarding (T/T) must indicate the rate of prepayment (recommended ≥30%) and the end payment time node (for example,3 business days after submission).
• The credit card (L/C) must indicate the qualification, the payment deadline and the exclusion of soft terms (such as the Shipment to Payment clause).

5. Delivery Time and Method

• Precise date of arrival (such as “2024_________11______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
• Logistics responsibility: designate the carrier, transfer conditions (such as allowing batch loading), and share the port fee.

6. Packaging and Labeling

• Flood resistance / earthquake resistance standard (export electronic products require IP67 waterproof packaging).
• Mandatory labelling of destination countries (such as the EU CE mark, Middle East Arabic indication).

7. Quality Inspection and Claims

• Third-party inspection agencies (such as BV, CCIC) and inspection time (7 days before shipping).
• Claim period (e.g., within 30 days after arrival at port) and compensation limit (e.g., 15% of contract amount).

8. Intellectual Property Clause

• Requires the buyer to undertake not to infringe on third-party patents/trademarks and to agree that the responsibility for infringement shall be assigned.

9. Force Majeure

• Definition of scope (war, strike, natural disasters, etc.), clear notice time limit (within 5 days after the event occurred) and termination conditions.

10. Dispute Resolution

• Prioritize arranging arbitration (such as the Singapore International Arbitration Centre) to avoid the cost of transnational litigation.

5 Risk Control Strategies

1. Payment Risk

Countermeasures:

• New customers use “30% prepayment +70% see copy of the invoice payment”;
• Large orders use backup credit cards (SBLC) or insured export credit insurance.

2. Performance Risk

Countermeasures:

• Establishment of default clauses (such as daily deductions for delayed deliveries0.1% of the contract amount);
• The right of unilateral termination is reserved (if the buyer has not paid more than30).

3. Legal Risks

Countermeasures:

• The law applicable to the contract is the choice of a neutral third country (such as British law);
• Excludes the long arm jurisdiction clause of the place where the buyer is located.

4. Exchange Rate Risk

Countermeasures:

• use of cross-border currency settlements;
• Conclusion of long-term foreign exchange contracts.

5. Logistics Risk

Countermeasures:

• Insure All Risks + War Risks;
• High value goods loaded with GPS tracking equipment.

Three main points of contract audit

1. Consistency of provisionsVerify that the contents of commercial invoices, receipts and credit cards are consistent with the contract, and avoid the refusal of non-conformity of single certificates.
2. Equality of responsibilityAvoid unilateral disclaimer clauses (such as “the buyer unconditionally accepts the goods”).
3. Compliance reviewEnsure that the product complies with the technical regulations of the destination country (such as the US FCC certification, Japan PSE certification, etc.).

Conclusion

A rigorous export contract requires both legal rigour and business flexibility. It is recommended that enterprises use the model contract + custom terms model to design risk plans for different markets and customers, and hire foreign lawyers when necessary to participate in the review of key terms. Through systematic risk management, the probability of trade disputes can be reduced70% or more.