International Sale Contract: How to Properly Structure a Foreign Trade Transaction

International trade requires special attention to legal details. An incorrectly drafted international sale contract can lead to financial losses, legal disputes, and refusal to fulfill obligations. That’s why it is essential to properly structure a foreign trade transaction in full compliance with international standards.

What Is an International Sale Contract?

An international sale contract is an agreement between parties from different countries that governs the supply of goods and payments. Such a contract must comply with international commercial law and the United Nations Convention on Contracts for the International Sale of Goods (CISG).

Key international legal instruments regulating foreign trade transactions include:

  • The UN Convention on Contracts for the International Sale of Goods (CISG);

  • The UNIDROIT Principles of International Commercial Contracts;

  • The Rome I Regulation on the law applicable to contractual obligations;

  • The 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Clearly defined contract terms help avoid disputes and misunderstandings. It is especially important to specify the subject of delivery, price, deadlines, payment procedure, Incoterms 2020 conditions, and applicable law. Choosing the correct applicable law allows disputes to be resolved clearly and reduces legal uncertainty.

Key Terms of a Cross-Border Deal

To ensure a legally secure foreign trade transaction, it is important to clearly define the following:

  • Product specifications;

  • Shipping and delivery terms;

  • Party liability;

  • Force majeure events;

  • Dispute resolution procedure (e.g., international arbitration).

All contract terms of an international sale contract should be negotiated in advance and set out in writing. It is strongly recommended to include an arbitration clause — a provision requiring disputes to be resolved through international arbitration. This ensures faster and more efficient dispute resolution compared to national courts.

This is particularly crucial in large cross-border deals, where even small errors in wording can lead to significant financial risks.

Risks in Foreign Trade Transactions and the Role of Legal Support

Risks in export-import transactions often arise from differences in legal systems, currency fluctuations, or delivery delays. Mistakes in drafting a foreign trade transaction may result in losses or lawsuits.

An experienced legal advisor in cross-border deals will help you:

  • Select the appropriate applicable law and jurisdiction;

  • Correctly formulate the contract terms;

  • Consider the specifics of the export-import transaction;

  • Minimize both legal and financial risks.

Legal Support for Cross-Border Deals

Professional legal support during a foreign trade transaction ensures protection at every stage — from negotiation to contract execution. This is especially important when dealing with international counterparties.

A legal expert in international commercial law assists with document review, negotiation of terms, and drafting the international sale contract in full compliance with the law. Legal support reduces risks and ensures a reliable foundation for any foreign trade transaction.

How to Properly Draft an Export-Import Transaction

When structuring an export-import transaction, both international and local legal requirements must be followed. Mandatory contract terms include:

  • Description and characteristics of the goods;

  • Accurate price and currency;

  • Delivery and payment deadlines;

  • Incoterms 2020;

  • Force majeure clauses;

  • Liability of the parties;

  • Dispute resolution process;

  • Arbitration clause with venue and arbitration rules;

  • Applicable law.

A properly drafted international sale contract is the key to a successful foreign trade transaction. It minimizes risks, protects both parties’ interests, and ensures fulfillment of obligations. Legal support from a professional advisor helps avoid errors and ensures full compliance with international commercial law.

Consult with DTK Partners

If you are planning a merger, acquisition, or cross-border deal, contact DTK Partners. We offer full legal support, legal due diligence, and structuring of foreign trade transactions to protect your interests at every stage.

📞 Contact us by phone or through our website to receive a personalized consultation.

DTK Partners provides comprehensive legal support for foreign trade transactions, including contract drafting, legal review, negotiation support, and representation in international arbitration. With deep experience in international commercial law, we help Russian and foreign companies operate effectively on global markets.