Documents in international trade contracts - Research Proposal Example

Documents in International Trade Contracts DOCUMENTS IN INTERNATIONAL TRADE CONTRACTS Introduction In international trade, ensuring that one has the correct documentation is essential. Accurate documentation ensures that the risks of delays and problems are minimized. A clearly written contract should be made between the seller and the buyer with the inclusion of where the delivery will be made (Guzman & Pauwelyn, 2009). Different nations use different languages and different business cultures.

Therefore, a clearly written contract is essential for the minimization of misunderstanding. The contract needs to be set out in a way that covers delivery point; the party is responsible for the goods at every stage, customs clearance, and the required insurance. In addition, it should also cover the party that pays for every cost. In order to avoid confusion, there are incoterms agreed internationally, which correctly spell out the agreed terms of delivery. These include the party handling custom procedures and paying taxes and duties, the party responsible for paying insurance and insuring the goods, and the party arranging for transportation and placing the goods for delivery (Birnie & Boyle, 2008).

International Trade Contracts These are normally divided into insurance documents, transport documents, commercial documents, and official documents. Official documents are those required for regulatory or official authorization for a party to export (Carr, 2010). They are submitted to the appropriate legalization authority, and without them; one cannot ship any products outside the country. These include a health certificate, a certificate of origin, an export license, a pre-shipment certificate of inspection, and an export or customs declaration.

Commercial documents support the sales contract made by the importer and exporter. The exporter issues them to confirm that they have met all conditions and terms of the sales contract. Commercial documents include verification documents, beneficiary certificate, packing list, and commercial invoice. Transport documents and commercial documents can be distinguished through the premise that they are representative of carriage contracts with a 3rd party. They are essential for the delivery and transport process for import transactions.

Transport documents are divided into three major types for use in international transport: consignment note, waybill, and bill of lading (Chapman, 2013). All these transport documents are meant to produce freight bills that contain information on costs and details of transport, show evidence of carriage contract, and the provision of proof that the carrier has received the goods. Finally, insurance documents constitute all contractual evidence with third parties, namely the company offering insurance and are, therefore, distinguished from commercial documents (Cheng, 2010).

Two major insurance documents include insurance policy and insurance certificate. A Certificate of Origin is an official or formal statement that is issued by the chamber of commerce and indicates where manufacturing happened (Sanson, 2012). An export document must be made for the confirmation of the goods’ origin. The seller makes the commercial invoice, and it includes the products’ details and contains the name of the seller, payment and delivery method, unit price, invoice number, total weight of products, and total price.

Finally, the bill of lading is a transport documents used for shipping goods on the ocean. It is a contract between the shipping line and the exporter and covers that transport of products from the loading port to the discharge port (Jackson, 2008). In addition, it is also a goods receipt and confers the goods’ title to the holder. It enables the importer to claim the goods that it refers to. In the absence of any of these documents or contracts, this does not prevent importation or movement of the products.

Should these forms be missing, then there are various alternatives available. The importer can be asked to present to customs the consignment in the destination country, pay the entire duty rate, and finally reclaim the paid duty after the documents are presented to the importer later (The Commonwealth, 2013). Indeed, this may be cheaper than having to subject the products to storage charges that are unnecessary. Finally, the missing documents are sent to the importer through fax for them to present them to the customs department.

If they do not accept fax, then the original forms can be sent to the consignee by courier. Objectives It is essential to ensure that one has the correct documentation in international trade. Accurate and thorough paperwork minimizes delays and problems. The research study aims to: Find out the importance of correct documentation in the mechanism of payment Find out the importance of clearly made out contracts between importers and exporters Find out the documentation that is required to cover transportation and insurance Find out what happens when some documents of international trade are missing Significance of Study This study is important because the correct paperwork during exportation and importation is essential.

This is because inaccurate or missing documents can lead to increased risks, extra costs, delays, and sometimes could prevent deals from completion. Whether one is exporting or importing goods, they need to comprehend the paperwork that they need. Even when one uses an agent or a freight forwarder, it will still be up to the exporter or importer to avail documentation. The research paper will seek to explain key documentations that the traders should know, as well as what needs to be in the contracts, and the contracts required for payment, transport, and customs.

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