Time of conclusion of foreign trade export contract

The conclusion of an export contract is one of the key stages in international trade. It is from the correct execution of this document that the success of the transaction, minimization of risks and observance of the rights of the parties depends. In this article, we will discuss the concept of the moment of conclusion of the contract, the procedure for its registration and the features of national legal order.

Time of contract award

The time of conclusion of the contract is determined depending on the order of interaction of the parties. Legislation of different countries establish their own approaches to this issue, which is important to take into account when concluding foreign trade transactions.

Two terms of contract

1. Between the parties present

The contract is concluded as a result of direct negotiations between the representatives of the parties.
An important feature is that legislation generally does not regulate the negotiation process itself, leaving the parties free to choose how to reach an agreement.

2. Between absent parties

A contract is concluded by sending an offer by one party and its acceptance by the other party.
The moment of conclusion depends on the receipt of acceptance by the offeror or on the sending of acceptance, depending on the applicable law.

Features of the national legal order

Continental European countries

• In most European countries, the time of conclusion of a contract is recognized at the place of acceptance by the offeror.
• Germany:
  Acceptance takes effect when it is received by the offeror or his representative at the place of business.
• Italy and Belgium:
  It is enough to deliver the acceptance to the offeror.
• France:
  Not only the delivery of the acceptance is required, but also the actual notification of the offeror about its receipt. In judicial practice, there is a dual situation: sometimes acceptance is considered effective from the moment of departure, and sometimes from the moment of receipt.

Russian legislation

• In Russia, legislation follows the German model.
• I agree. Art. 433 Civil Code of the Russian FederationThe contract is considered concluded at the time the offeror receives the acceptance.
• The place of detention shall be the place of residence of a citizen or the location of the legal entity that sent the offer (Art. 444 Civil Code of the Russian Federation).

English law

• The time of conclusion of the contract is associated with the sending of the acceptance (the “mailbox” doctrine).
• The contract is considered concluded even if the letter of acceptance has not reached the offeror.
• The place of detention shall be the place of sending the acceptance.

Offer requirements

I agree. Art. 432 Civil Code of the Russian FederationA contract is considered concluded if the parties have reached agreement on all its essential terms. An offer made by one of the parties must meet the following requirements (Art. 435 Civil Code of the Russian Federation:

1. To be addressed to a specific person or persons.
2. Be sufficiently certain and express the offeror’s intention to consider himself a contracting party.
3. Contain all essential terms of the contract.

The offer can be executed in the form of a standard form, which is additionally filled in and specified by the addressee accepting the offer.

Rules for acceptance

Article 438 of the Civil Code of the Russian Federation establishes the basic requirements for acceptance:

1. Acceptance must be complete and unconditional.
   Any change in the terms of the offer upon acceptance shall be regarded as a new offer.
   
2. Silence is not considered an acceptance.unless otherwise provided by law, agreement of the parties, custom or previous business relationship.
   
3. Actions within the period set for acceptance are considered to be its confirmation.
   For example, this may be the shipment of goods, the provision of services or payment, unless otherwise specified in the offer.

Question of place of contract

The place of signing the contract is often specified in the document, for example, "Moscow", even if the parties signed the contract outside Russia. In such cases, there is uncertainty in determining the actual location of the transaction. This may affect the choice of applicable law and the jurisdiction of disputes.

Findings

The conclusion of a foreign trade contract requires a careful approach to the preparation of documents and taking into account the national peculiarities of the legislation of the parties. To minimize risks and ensure the legal force of the contract, it is recommended:

• Accurately agree on all the essential terms of the contract.
• Understand the time and place of the transaction in accordance with applicable law.
• Include in the contract clear language on the place of signature and applicable law.

Competent conclusion of an export contract helps to avoid many problems in the future, and also strengthens trust between partners in the international arena.