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After
the importer has selected a supplier, the two parties come to a
contractual agreement. The contract must contain the following elements:
| 1.
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A
clear description of the goods specifying
the type, make, quality, quantity and contents of components. |
| 2.
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The
price specifying
the amount, how it is to be calculated, the currency and whether
or not shipping costs are included. |
| 3.
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The
delivery details specifying
date or period of time in which delivery must be made, mode
of delivery, how the delivery is deemed to be made and the place
for delivery. |
| 4.
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The
payment terms specifying
when the payment must be made, whether payment is to be made
in one lump sum or in installments, when installments are due,
and the where payment is to be made. |
| 5.
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The
packaging and labeling requirements specifying
the types of packing, size of cases, and specification of appropriate
packing and/or special labeling for fragile goods or goods which
are sensitive to climatic changes. |
| 6.
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The
invoicing details specifying
the time when invoicing will occur, and the procedure for invoicing. |
| 7.
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The
shipping details specifying
the mode of transportation, whether the shipping is to be arranged
by buyer or seller, place of shipment for the goods, place of
arrival for the goods, and who will bear the costs of shipping
and cargo insurance. |
| 8.
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Others
terms such
as who is responsible for insuring the goods while in transit
from the seller to the buyer, the amount of insurance to be
carried if the seller is responsible for the insurance, who
is responsible for the cost of insurance, any guarantees or
warranties, and cash discounts. |
| 9.
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The
validation specifying
who decides when the order has been fulfilled and who checks
the quality and quantity of the goods. |
TIP:
The importer and exporter must include all of these points in their
commercial agreement.
If
any of these points are overlooked and problems arise, it is very
likely that the importer will bear the burden of harm. The importer
should also be aware that non-performance on any elements of the
commercial agreement has little chance of being remedied as foreign
companies are at a distinct disadvantage when operating in the Thai
legal system.
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