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International sales contract: key clauses and the CISG

A good international sales contract answers the questions a judge or arbitrator will ask in a dispute: what exactly was sold, how much, at what price, where risk passes, when and how payment is made, how goods are checked and what happens if something goes wrong. In trade between Poland, the rest of the EU and, for example, the Philippines, you also need to choose the governing law deliberately and decide whether the Vienna Convention (CISG) applies. Below are the clauses every contract should cover.

By Hiram Trade Editorial Desk

Published

6 min read

1. Parties and authority

Full legal names, addresses, registration and VAT numbers of both parties and the names of signatories. Check in the company register that the person signing can represent the company; see our guide to verifying a foreign supplier.

2. Goods specification

This is the most common source of disputes. The description should be measurable:

  • trade name and tariff code (HS/CN) if known; see tariff classification,
  • quality parameters with the test method (moisture, content, dimensions with tolerance),
  • standards or a reference sample (and who keeps it),
  • packaging, marking, labels and label language,
  • required documents, such as certificate of origin, certificate of analysis, declaration of conformity.

3. Quantity and tolerance

With bulk goods it is hard to deliver exactly the ordered quantity. Set a tolerance (plus or minus a stated percentage), say who chooses the quantity within it and at what price any excess or shortfall is settled. Also state where and how quantity is determined: loading weight, an independent surveyor's report, or discharge weight.

4. Price and Incoterms

The price needs a currency, a unit and an Incoterms rule with a named place, for example "FOB Manila, Incoterms 2020" or "DAP Poznan, Incoterms 2020". Incoterms allocate costs and risk, but they do not govern transfer of title, payment or remedies for breach. See Incoterms 2020 in practice. If the price should adjust to exchange rate movements, add a currency clause; see currency risk.

5. Payment

Method (advance, letter of credit, collection, open account), a due date counted from a defined event (invoice date, bill of lading date, delivery date), the bank account, late payment interest and rules for changing bank details (in writing only, confirmed by phone to a known number). Compare the options in payment terms in international trade.

6. Delivery and time

Delivery date or shipment period, place, whether partial shipments and transhipment are allowed, and the duty to send a shipping notice. Define the consequences of delay: liquidated damages with a cap, and a right to terminate after an additional period.

7. Inspection, acceptance and claims

Who inspects, where and when: pre-shipment inspection at the seller's premises or examination on arrival. Name the inspection company or how it is chosen, the sampling standard and the consequences of a failed result; see pre-shipment inspection. Set a deadline and form for defect claims (written, with photos and a report).

If the CISG applies, the buyer must examine the goods within as short a period as is practicable and give notice of non-conformity within a reasonable time; the Convention also sets an outer limit of two years from the date the goods were actually handed over, unless that is inconsistent with a contractual guarantee period.

8. Force majeure and hardship

A generic sentence that "force majeure releases the parties" is not enough. Define which events qualify, the duty and deadline to notify, evidence, the duty to mitigate, and what happens if the impediment lasts longer than an agreed period (a termination right). The ICC Force Majeure and Hardship Clauses published in 2020 are a useful starting point to adapt to your goods and route.

9. Governing law and the CISG

The United Nations Convention on Contracts for the International Sale of Goods (CISG, the Vienna Convention) has been in force in Poland since 1 June 1996. It applies to sales of goods between businesses in different states when both states are contracting states, or when the rules of private international law lead to the law of a contracting state.

In practice:

  • Poland and Germany are contracting states, so a Polish-German contract is usually governed by the CISG automatically unless the parties exclude it,
  • the Philippines and the United Kingdom are not listed as parties in the UNCITRAL status table; in a contract with a Philippine company the CISG may still apply if conflict rules point to Polish law (or another contracting state's law), which needs a legal assessment,
  • within the EU, where no law is chosen, the Rome I Regulation generally applies the law of the seller's habitual residence to a sale of goods.

The parties may exclude the CISG (Article 6). Simply choosing "Polish law" usually does not exclude it, because the CISG is part of Polish law. To exclude it, say so expressly, for example "excluding the United Nations Convention on Contracts for the International Sale of Goods". Whether that is wise depends on the case: the CISG is neutral and widely known, but it differs from domestic codes, for instance in the rules on notice of defects.

10. Dispute resolution

Choose one route: the courts of a named country, or arbitration under a named institution with the seat, language and number of arbitrators. A court judgment from one EU Member State is enforced in others under the Brussels I bis Regulation, but outside the EU enforcement can be harder. Arbitral awards are recognised in states party to the New York Convention, which include Poland and the Philippines. See international trade disputes and arbitration.

11. Other clauses

  • retention of title until payment (effectiveness depends on the law where the goods are located),
  • sanctions and export control compliance, with a right to suspend delivery; see sanctions screening,
  • confidentiality, no assignment without consent, the prevailing language if there are two versions,
  • form of amendments: in writing only, stating whether email counts.

Checklist before signing

  • Measurable specification with test methods.
  • Quantity tolerance and method of determining quantity.
  • Price with currency, unit and Incoterms 2020 rule with a named place.
  • Payment due date counted from an unambiguous event.
  • Inspection and claims procedure with deadlines.
  • Force majeure with notice duty and termination right.
  • Governing law and a deliberate decision on the CISG.
  • One enforceable dispute resolution route.

On Hiram, terms are negotiated in versioned rounds, so you can see who changed the price, quantity or Incoterms rule and when; the contract and its legal wording are still prepared by you or your lawyer. Start by publishing a request on the Hiram market.

This article is informational and is not legal advice. Have high-value contracts reviewed by a lawyer.

Sources

This article is for information only and is not legal, tax or customs advice. Rules and rates change: check the current official sources or consult an adviser before you decide.

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