Delivery terms, payment methods, transport documents and the contractual allocation of risk all belong to the same export file, and a company is only operationally secure when they are handled together.
Key concepts in export transactions
This handbook sets out, in general terms, the questions a company should work through before it exports. How they play out depends on the sector and on the structure of the particular transaction.
Practical takeaways for companies
- Check the legislation and the practice as they stand today, not as they stood when the template was drafted.
- Treat the contractual, compliance and operational strands as one exercise.
- Take advice on the specific file rather than on the general position.
The topics that matter most in practice
Delivery terms (Incoterms) determine where risk and cost pass: under EXW most of the burden stays with the buyer, while terms such as CIF or DDP shift significant duties to the seller. The chosen term must be consistent with the transport insurance, the customs responsibilities, and the payment method. On the payment side, advance payment, letters of credit, documentary collection and open account carry different risk profiles; in markets with higher buyer risk, letters of credit and bank guarantees come to the fore.
In international road transport, the CMR Convention governs the carrier’s liability and the applicable time limits, and correctly issued transport documents are the basis of any later claim; these disputes are covered by our CMR, transport and logistics practice. Export contracts should settle the applicable law, jurisdiction or arbitration, and retention-of-title clauses from the outset; an export file tied into standard contract management processes makes proof much easier if a dispute arises.
Questions to answer when choosing a delivery term
In practice the choice of delivery term comes down to five questions: who arranges carriage, who bears the cost of it, at what point risk of loss passes to the buyer, who handles export and import customs formalities, and who takes out the insurance. If the rest of the contract does not match the answers, an expectation gap will turn into a dispute even though the term itself was written correctly. As of July 2026 the current ICC rule set is Incoterms 2020; stating which version the contract refers to, and naming the delivery point with a full address, removes most of the arguments that surface later.
Designing the payment method and the delivery term together
The payment method and the delivery term cannot be chosen independently of each other. Under a letter of credit the banks examine documents, not goods, so the documents called for in the credit must be documents the chosen delivery term can actually produce. Asking the seller for an insurance policy under a term where the seller does not insure is a reliable way to have the presentation met with a discrepancy. Documentary collection moves the documents through the banks but creates no payment guarantee; on open account the collection risk stays entirely with the seller. The payment method therefore has to be assessed together with buyer risk and with how enforcement actually works in the destination country.
What an export file is expected to contain
The document set varies with the transaction, the product and the destination, but a typical file is expected to hold: the commercial invoice and the packing list, the transport document (a CMR consignment note by road, a bill of lading by sea, an air waybill by air), the insurance policy, product conformity or analysis certificates where these are required, and, depending on the nature of the transaction, origin or movement certificates (for example A.TR, EUR.1, a certificate of origin). Party names, goods description, quantities and the delivery term must match one another and the contract exactly; a large share of the problems that arise in practice are not legal at all, but come from these inconsistencies.
Common mistakes
- Writing the delivery term as three letters alone, without the named place or the rule version.
- Drafting credit terms that call for documents the chosen delivery term cannot produce.
- Consignor, consignee and goods description on the transport document not matching the invoice and the credit.
- Leaving the governing law and the jurisdiction or arbitration clause blank.
- Using a retention-of-title clause without checking what effect it actually has in the destination country.
- Keeping samples, trade fair material and warranty shipments outside the export file.
Each of these turns on the structure of the particular transaction. Reviewing the contract, transport, payment and document strands of an export file at the same time is both quicker and cheaper than correcting them once the goods have shipped.
