In-Class Group Assignment - Week 3

Q 1- List the important clauses that should be included in international trade agreements.
The main clauses that should be included in international trade agreement are
1. Depiction of goods :- This is one of the main provisions in a trade contract as in this the
buyer describes the goods that he has ordered and the seller has to deliver the same goods as
described by the buyer, or seller describes the goods that he is selling to the client. Like if the
colour is not important to a buyer it is not included in it but on the other hand the if dimensions
are important to him he has to mention it in this clause.
2. Time of delivery :- In the agreement, the parties have to mention the date of delivery or a
certain period between which the goods will be delivered.
3. Document’s :- Exporters are well encouraged to be precise in the documentation required
especially documentation required for payment like letter of credit etc.
4. Contract Price: Parties should clearly indicate the price and currency used in both numbers
and words.
5. Delivery Terms: Proper Incoterms published by International Chamber of Commerce must be
used to allocate the following between the buyer and seller :

 International transport and administrative costs.

 The point of transfer and risk of the goods.
 Responsibility for customs and payment of import duties
 Responsibility for obtaining insurance coverage.

When using incoterms proper place with exact point of delivery should be used.

6. Payment Condition: the mode of payment (letter of credit, advance payment, etc.) must be
mentioned in the agreement.

7. Resolution of Disputes : In case there are disputes between the parties, they should specify
the place and language to resolve it. The parties should designate the national or municipal
courts in which lawsuits are be filed.

8. Retention of Title: This clause states that the seller retains ownership of the commodities
until the full payment is paid and also that the seller may reclaim the goods if the sum is not
paid.

9. Force Majeure: Also known as “hardship” clause excuses the parties from performance if the
failure is due to any condition which was not under their control, like outbreak of a war, or
Tsunami, earth quake etc.
 In-Class Group Assignment - Week 3

Q 2- Explain the significance of international treaties and conventions. Give one example to
support your answer.

International treaties and conventions refers to the formal agreement between different
nations and international organizations to establish a relationship governed by international
law. The significance of these treaties are :-

1. They regulate international relations and achieve cooperation among contracting nations.

2. To ensure stability, reliability in international relations. 

3. To resolve conflicts among the participating nations.

4. To enhance free trade among contracting nations.

5. To strengthen the bond among nations involved.

Example: NAFTA

It is a treaty among Canada, USA and Mexico. It was created to increase investment, reducing
trade cost so that North America can stand well in the international market. It is fulfilling its
purpose as it is largest free trade area in respect to gross domestic product. It got successful in
lowering taxes and allowing trade to flourish.