Pre-contractual documents in foreign economic activity

Foreign economic activity forms the basis of concluding relevant contracts. The technique of entering the international market develops in several stages, one of which is the preparation for concluding sales contracts.

The main task at the initial stage is the search and selection of a counterparty. The choice of counterparty is very important and difficult. It depends on the nature and subjects of the agreement, the country of execution of the agreement, the capacity of the market, and the economic situation. When choosing a counterparty, the question arises in which market, that is, in which country is it better to sell or buy goods, and with which foreign buyer or supplier is it better to conclude an agreement.

Methods of establishing contacts with potential buyers:

During the preparation of an export agreement based on direct relations between counterparties, the seller can use various methods of establishing contacts with potential buyers:

• Send the offer proposal directly to one or several possible foreign buyers;

• Accept and confirm the buyer's order;
• Send the buyer an offer in response to the request indicating the specific terms of the future contract or proforma and contract;
• Participate in bidding by submitting a tender to bidding organizers;
• Participate in trade and industrial exhibitions and fairs, both international and national; send a commercial letter to a potential buyer with information about intentions to start negotiations on concluding a specific agreement; send the form of the contract to an already known buyer as a result of agreeing the terms of the contract by phone, e-mail or on the basis of previous agreements, place an advertisement in the media, send informational materials about the product to potential buyers.

In the preliminary period, a draft sales contract is usually drawn up, which takes into account the actual agreement reached by the parties. The draft contract is drawn up by one of the parties and carefully studied by the other. Negotiation of terms is carried out until an agreement is reached on all terms of the contract. After that, the final text of the contract is drawn up.

In world trade practice, there are several ways of concluding foreign economic agreements.

In international trade practice, two types of offers are distinguished: a hard offer and a free offer. Appropriate inscriptions must be made on it.

A firm offer is a written offer for the sale of a certain lot of goods, which is sent to the offerors of one possible buyer. It specifies the period during which the seller is bound by his offer and cannot make a similar offer to another buyer if he agrees to all the terms of the offer. This confirmation contains an unconditional emphasis, that is, the buyer's agreement to accept without modification all the terms of the seller's firm offer.

It follows from the provisions of the Vienna Convention (Article 18) that a statement or other behavior of the addressee expressing agreement with the offer is considered acceptance.

Consent of the addressee can be expressed by performing any action, in particular, related to sending the goods or paying the price. For example, the seller can, without formal acceptance of the order, inform the buyer about the shipment of the goods, send him an invoice and shipping documents. In turn, the client without special proof of effect can open a letter of credit in favor of the seller to pay for the goods, cancel the advance payment after whose parcel it is, money transfer, and so on. Such behavior of the addressee is called conference actions, which are considered equivalent to the conclusion of the agreement.

If the buyer does not agree with one or more terms of the offer, he sends a response to the offer or counteroffer to the seller, indicating his terms and the deadline for the final deadline. the seller from the offer made by him.

A free offer is usually made at the same time to several possible buyers for the same batch of goods and does not set a response time and therefore does not bind the referents with its offer. The buyer's agreement with the conditions set forth in such an offer is confirmed by a hard counter-ref. After confirmation of the counteroffer by the seller (acceptance), the deed is considered a prisoner.

And a free offer is less convenient for the buyer, because it does not make him confident that, by sending it to the counteroffer, he will become the owner of the goods, and time will be lost. In modern conditions, a free offer is used quite rarely. Sellers, as a rule, do not focus on the free market, their production activities are built taking into account specific demand.

Exporters who regularly sell certain products develop standard forms that outline a set of uniform conditions on which this seller usually offers his product. conditions, the procedure for providing a guarantee, technical documentation, conditions for the assignment of goods acceptance, payment, force majeure, arbitration and other conditions of sale.

Commercial inquiry ⇒ Free / hard offer ⇒ offer confirmation (acceptance) / Free / hard order ⇒ order confirmation = contract

Another widely used way of preparing an international sales contract is to study the terms of the order received from the buyer, or confirm it and accept it for execution, or reject it without explaining the reasons.

If the initiative to enter into negotiations comes from the buyer, his appeal to the seller is usually called a request . A commercial request, a call for an offer, a potential buyer's appeal to the seller, containing a request to offer a certain product. According to a number of requisites, the request departs from the offer, but the text of the request is usually much shorter than the offer, and as a rule, it does not indicate the price, since the priority right to set the initial price is reserved for the seller. The number of goods in the request may be initially indicated less than the intended purchase, so that a further increase in the volume of the purchase will allow to negotiate a better price and other terms of the agreement. At the same time, the presence of certain details in the request may indicate a serious intention of the buyer. The buyer, who aims to receive an offer on more favorable terms, carefully works out the content of the request, while trying not to give the impression of increased interest in the purchase to the seller. This allows you to make better use of the competition between sellers and save time on concluding a deal. Through the war of analysis and comparison of the received competitive offers, the buyer chooses the most profitable ones to continue the negotiations on the conclusion of the agreement.

In some cases, the request is sent not for the purpose of concluding an agreement, but to obtain information about prices. If repeated requests do not end with the conclusion of an agreement, especially if the afferent does not receive a response to his offers at all, the seller gets the impression that the requester has no real intention to purchase the goods and is lost in the future. In such a situation, it is difficult to count on the merchant receiving commercially reliable offers.

Sending a request does not create an obligation to conclude an agreement. In order to speed up its conclusion, the buyer can send the seller an order containing a sufficient minimum of essential terms of the agreement.

According to the degree of obligation, the order is equivalent to a firm offer.

The receipt by the customer of an unconditional confirmed order from the seller is considered the conclusion of an agreement, the placement of an order. It is advisable to issue an order to a well-known, reliable seller, when the buyer already has at his disposal sufficient information about the conditions of sale of the goods he is interested in, has analyzed them and considered them acceptable.

Documents for the preparation of the export agreement:

Proposal, offer - a document in which the conditions for the conclusion of a contract are set out in which the goods are offered. There is a firm and loose offer

An order is a document from the Buyer to the Seller that contains a sufficient minimum of essential terms of the agreement. According to the degree of obligation of the order once and the violence of the firm offer. There is a firm and free order form.

Confirmation of the order - receipt of an unconditionally confirmed order by the buyer from the seller is considered the conclusion of an agreement, the placement of an order.

A contract is a document that indicates an agreement between the seller and the buyer for the supply of goods.

Order confirmation - a document that confirms the obligation to fulfill the order and terms or acceptance of the terms.

A proforma invoice is a document that is a preliminary invoice.

A request is a document issued by a party interested in purchasing the goods specified in it and addressed to a future supplier for the purpose of receiving an offer.

Source United Nations Convention on Contracts for the International Sale of Goods of April 11, 1980