What should be taken into account in FEA contract?

Any delivery of goods follows after the conclusion of the external economic contract for the supply of the products. This is a complex legal construction that requires a professional approach and attention. Of course, it is not possible to provide all the nuances of FEA-contact in one article, we will try to outline at least a few of them.

Terms of delivery and risks of loss of goods

Each FEA-contact shall provide the conditions of the delivery and the time of the transfer of risk for the loss of the goods. The delivery of the cargo may be the responsibility of the supplier, buyer, carrier or the forwarding company. The risks of loss can be transferred to the buyer at the time of handing over the goods to the carrier or directly to the buyer. For example: “ the delivery of goods to Kharkov is carried out by the forwarding company, attracted by the supplier at his own expense, and the risks of loss or damage to the goods are transferred to the buyer at the time of its receiving at the warehouse in the city of Kharkov”.

It is also important to foresee who the customs broker be involved and paid by, as well as the costs related to the customs operations.

Currency risks

The calculations on the international contacts can be made in the currency of one of the parties or in any other freely convertible currency. In this case, it is logical that for the duration of the contact the rate of exchange may change so much that the performance of the contract will be unprofitable for any of the parties. In this case it is useful to have a clause in the contract that allows you to change its terms (recalculate the prices) or give the right to its termination in the case of the fixed changing of the exchange rates.

Arbitration clause

In case of a dispute relating to the implementation of FEA-contact it is quite possible to have the situation when the rules of the private international law establish a disadvantage for you to solve the dispute. Also it is quite expensive to conduct the arbitration dispute in a foreign country. Therefore, it would be useful if you set the place of the dispute resolution in the international commercial arbitration in the state with the application of the law of your state.

It is important to understand that in case of disagreement on the international contracts, it will be solved primarily with the application of the provisions of the contract. Therefore, it is necessary to provide the maximum possible numbers of the possible situations I FEA-contact. Do not rely on the fact that the dispute will be resolved successfully by the regulations of the national legislation.