An international trade transaction, no matter how straightforward it may seem at the start, is not completed until delivery has taken place, all other obligations have been fulfilled and the seller has received payment. This may seem obvious; however, even seemingly simple transactions can sometimes do, go wrong.
There are many reasons why these things happen, but behind them all is the basic fact that the risk assessment of the transaction and/or the way these risks were covered went wrong. An example is the risk assessment of the customer, where exporters do not always fully realize that some larger countries are divided into regions or states, often with different cultures, which may effect trade patterns and practices. In some countries, what the seller thought was a signed contract may just be seen as a letter of intent by the buyer until is is also has been countersigned by them by a more senior and internally authorising manager. Or it may be that the seller agreed to terms that were previously used but are no longer binding.
Another reason may be that the parties simply did not use the same terminology or did not focus on the details of the agreed terms of payment. This would inevitably lead to undefined terms, which are potentially subject to future disputes, something that the seller is in a weaker bargaining position. Even though such errors seldom lead to non-payment, it is more likely that they will lead to delays in payment, possibly with increased commercial and/or political risk as a consequence.
Each area of international trade requires its own knowledge to be used, from the first contact between buyer and seller to final payment. If you need assistance contact us at Go Capital Group, we are here to support all our clients.