Commercial activities and types of contracts

Four main activities: importing, exporting, re-exporting (re-exports are goods that have been imported and then exported in the same form, i.e. not put through any manufacturing or finishing process) and re-importing (i.e. bringing back into a country an article or commodity that has earlier been exported from the same country, such as a motor car being re-imported after temporary export).

Basic ones are associated with import/export transactions, i.e. with the conclusion of foreign trade contracts for the exchange of goods. Auxiliary activities ensure the successful performance of the basic ones, i.e. they are associated with carriage of goods, insurance, banking operations, as well as customs and other activities. Basic activities: Sellng for money, Countertrade, Leasing, Tolling, Consignation, Futures.

Licence agreements deal with purchasing of ideas, scientific-technical knowledge in the form of licences, patents and know-how. The patent issued for the invention gives its owner the right to produce, use or sell the products on the monopoly basis of the invention or specific methods of their production. It gives the full rights to use invention. licence agreement give the right of ownership of the invention during a certain period of time. International licence agreements may be classified: Simple (standard, non-exclusive ) licences when the licensor permits the licensee on certain conditions; Non-standard (exclusive ) licences when the licensor gives the licensee the exclusive (monopoly) right to use the subject of the licence agreement on the conditions specified and limited geo­graphically; Full licences when the licensor gives the licensee the monopoly right to use the subject of the licence within the period of time specified)

Countertrade is exchanging goods or services that are paid for, in whole or part, with other goods or services.

Reciprocal Sales (танки-бананы)is thesales of goods and services to a country by a company that promises to make a future purchase of a specific product from the country. Barter In law, a barter is an exchange of goods or services directly for other goods or services of equal value, without the use of money. True barter, there is a simple exchange and no value is placed on the goods exchanged. In the valued barter, some value is put on the exchanged goods. Buyback Deals Suppliers of capital goods agree to be paid by the future output of the factory which they are supplying. Buyback occurs when a firm builds a plant in a country - or supplies technology, equipment, training, or other services to the country - and agrees to take a certain percentage of the plant's output as partial payment for the contract (see the scheme below). Offset (комплектация) It is an agreement that a company will offset a hard - currency purchase of an unspecified product from that nation in the future. Agreement by one nation to buy a product from another subject to the purchase of some or all of the components and raw materials from the buyer of the finished product, or the assembly of such product in the buyer nation. Switch trading is a practice in which one company sells to another its obligation to make a purchase in a given country.

The framework agreement should contain a clear definition of the mutual obligations of the parties. Arrangements should be made for a settlement account or evidence account and for the payment of the credit balance on termination of the agreement in cash. The framework agreement often contains penalty provisions for nonperformance of the countertrade obligations bу the exporter.

Steps to Conclude a Contract: Enquiries An enquiry is a request for information (general enquiry asking for information about the goods they supply (catalogues and price-lists); specific enquiry, which may include such information as terms of delivery, delivery times, terms of payment, discounts, types of packing and so on.). An offer (a quotation)is a statement by sellers usually in the written form expressing their wish to sell the goods. unsolicited offers which are sent on the seller's own initiative in the hope of making potential customers interested, whereas solicited offers are made in answer to an enquiry; a firm (binding) offer which is a promise to supply goods on the terms stated, i.e. sellers must provide the goods at the prices and terms given in their offer within a stated period of time; non-biding offer, which implies, that certain factors may exist preventing sellers from binding themselves to the terms of the offer, for example, in the case of certain goods where the prices fluctuate (like oil or gold). Orders If the buyers are satisfied with the terms of the seller's offer, they may then place an order.. A trial order means that the customer orders a small quantity of goods to test the quality. A firm ordermeans that the customers commit themselves to buying the goods (may have a fixed delivery date). A standing order is when the customer places one order for a certain quantity of goods to be delivered at regular intervals, e.g. 500 kg of coffee on the first day of each month. An initial order is the first order placed with a company. A follow-up order is the second order placed with a company. Merchandise on call means that the customers place one order for a quantity of goods which they have delivered in parts as and when they need them .An advance order is when the customers order the goods a long time before they need them or a long time before the goods are available.A bulk order means that the customer orders goods in large quantities.A repeat order is when the customer orders exactly the same goods as before. A sales contract is a legally binding agreement reached by the seller and the buyer (the partiesto the contract). It can be made orally or in writing, although it is usual for the contract to be drawn up in writing to prevent disputes. clauses (articles ) are used: Naming (definition) of the parties; Subject of the contract, and volumeof delivery; Prices and the total value (amount)of the contract (including terms of delivery; Time (dates) of delivery; Terms of payment; Transportation (carriage) of goods (packing, marking and ship­ment); The sellers' guarantees (the quality of the goods); Sanctions and compensation for damage; Insurance; Force majeure circumstances; Arbitration;General provisions.