Checklist for Creating a Sales (Export) Contract to Protect Against Non-Payment Issues

Checklist

1. Contract Information:

• Contract Number

• Date of Contract

• Names and addresses of both parties (Seller and Buyer)

• Authorized representatives of both parties (with titles)

• Company registration numbers (if applicable)

2. Goods and Services:

• Clear product description (including specifications like material, size, weight, etc.)

• Quantity of goods being sold

• Packaging details

• Inspection requirements (if applicable)

3. Price and Payment Terms:

• Total contract price

• Price per unit

• Currency of payment

• Payment method (e.g., Letter of Credit, Wire Transfer)

• Payment terms (e.g., upon receipt of shipping documents)

• Late payment penalties and interest rates

4. Delivery Terms and Shipping:

• Incoterms (e.g., FOB, CIF)

• Delivery deadline and shipping date

• Mode of transportation (e.g., by sea, by air)

• Shipping instructions

• Transfer of risk details (when does risk pass from Seller to Buyer?)

5. Inspection and Acceptance:

• Inspection requirements and details of third-party inspectors (if applicable)

• Costs and responsibility for inspection

• Rejection terms for non-conforming goods

• Timeline for inspection and acceptance of goods

6. Warranties:

• Conformity with product specifications

• Warranty period (if applicable)

• Statement of merchantability and fitness for purpose

• Compliance with legal regulations (in both countries involved)

7. Force Majeure:

• List of force majeure events (e.g., natural disasters, war, strikes)

• Notification procedure in case of force majeure event

• Time limits for force majeure events before contract termination options

8. Dispute Resolution:

• Arbitration clause (institution, location, and language of arbitration)

• Governing law of the contract

• Agreement on handling legal fees

9. Termination and Breach of Contract:

• Conditions for termination (e.g., breach of contract, failure to pay)

• Written notice requirements for termination

• Seller’s right to suspend shipments for non-payment

• Buyer’s liability for Seller’s legal fees in case of non-payment disputes

10. Liability and Indemnity:

• Limitation of Seller’s liability (e.g., maximum liability equal to the contract price)

• Indemnification clause (protecting the Seller against third-party claims from the Buyer’s resale or misuse of the goods)

11. Supporting Documentation for Payment:

• Commercial invoice

• Bill of Lading

• Packing list

• Inspection certificate (if applicable)

• Certificate of origin

12. Miscellaneous:

• Entire Agreement clause

• Amendment clause (requiring written consent for changes)

• Notice clause (specifying where official notices should be sent)

13.Signatures:

• Signatures of authorized representatives from both parties

• Date of signing

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This checklist can be used to ensure that every key element of the export sales contract is properly addressed to protect the seller from non-payment risks and to establish a solid legal framework for managing international trade transactions.