Terms of Export and its examination

Examination of Terms of Export

Terms of Export and its examinationBefore the export order is finalised for acceptance, it is highly essential to the exporter to examine the terms and conditions, carefully. These are some of the conditions which warrant careful examination, in particular:

(i) Product description including specifications, style, colour, packing conditions etc.

(ii) Marking and Labelling requirements, if any. (iii) Price, terms of payment (FOB, CIF etc.) including currency, nature of letter of credit (revocable, irrevocable, confirmed, unconfirmed, restricted, unrestricted etc), credit period, if any.

(iii) Terms of shipment including choice of the carrier, mode of carriage, place of delivery, date of shipment/delivery, port of shipment, Transshipment etc.

(iv) Inspection requirement including type of inspection, place of inspection and inspection agency.

(v) Insurance requirements including nature of risks to be covered and insurable value.

(vi) Documents for realizing payment including nature and number of invoices, certificate of origin, certificate of inspection, insurance policy, document of title etc.

(vii) Last date for negotiation of documents with bank.

(viii) Frustration clause indicating circumstances under which both the parties would be discharged from liability.

Exporter has to examine all the clauses from the angle of cost implication. A new exporter who is keen to get the export contract may not give serious consideration and tend to ignore the implications of certain aspects. This situation may result in loss in the deal. To illustrate, an exporter has not observed the requirement of a preshipment inspection by an agency who does not have office in India. Soon after the manufacture of the product, exporter has realised the time and cost implications for conducting inspection by a foreign agency. It is unlikely importer would agree to change the inspection agency, at that stage. If any condition is not acceptable, suitable amendment, has to be secured from importer and only after all the clauses are acceptable, exporter has to accept export order.

 

 

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Comments


Bharath Kumar : It was very nice to go through your blog, provided insightful information on the import / export procedure.We Would like to seek you assitance for the following 1. Import Goods for our end customers 2. Analysis import export data for products we deal with

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