Contract Considerations For Cross-Border Sales

Negotiating a cross-border manufacturing and supply agreement presents unique challenges to both the seller and the buyer.

Should You Use a Single Agreement or a Master Agreement?

An initial consideration is whether to use a single agreement or a master agreement. A single agreement is generally appropriate for a limited, well-defined transaction. A master agreement is more appropriate (in conjunction with periodic purchase orders) for relationships that may span longer periods of time, where the quantity, price, delivery, and even types of goods may vary.

Description of Goods

A critical element of the agreement is the description of the goods. The parties must clearly describe the range and specifications of goods that the seller is manufacturing and selling to the buyer. Additionally, and especially if the goods are custom-made, the parties should address any special rights and obligations (such as those relating to tooling), minimum purchase commitments