LEGAL CONSIDERATIONS

Legal Considerations

Legal Considerations

Without international trade there can not be economic development. The trade contract constitutes the basis for all the activities connected with international trade especially those concerning organizational and documentary matters. Whilst the precise duties of shipping are subject to the contractual terms, it is customary for the shipper (whether the seller or buyer) to obtain export licenses, secure shipping space, transport the goods to the port of shipment, ensure that customs documentation and clearances are met and load the goods on board the vessel. In the carriage of goods the role of the trade contract cannot therefore be ignored as all other issues depend on the contents of the trade contract.

The relationship that exists between the various parties whose relationship are influenced by the trade contract is depicted below.

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International Trade Business entails

The legal relationships between parties who sell and buy goods from each other

Their relationships with persons willing to carry the goods from one place to another

The arrangements they have with insurers to protect the goods in the event of loss or damage and

Any financing or payment agreements with banks or financial institutions

The functions of all these are dependent first on the trade contract

Because international trade is riskier than trade within a country they are often governed by contractual rights and obligations agreed between the parties expressly or by implication .Some of the risks that are usually taken care of by trade contracts are longer distances that results in less transparency in transactions, different currencies leading to exchange risks or money transfer limitations and different cultures and languages which might lead to misunderstanding and misinterpretation, as well as different legal frameworks that might result:in weak legal position

Much of the risks associated with international trade can be divided between buyer and seller within the trade contract. The delivery of goods which usually sets in motion all the other risks and issues is agreed upon between seller and buyer and it is here that the risks are “shared”. Though it could be done in a very individual manner it is usual to refer to standardized terms. This speeds up the whole process and increases the transparency and mutual understanding considerably. These so called trade terms are simply standard terms accepted in international trade as meaning a particular type of contract. The most commonly used trade terms are the INCOTERMS (= International Commercial Terms), which are a set of standard conditions for delivery that can be incorporated into the contract by the parties. A major task of Ghanaian logistics professionals is therefore to educate Ghanaian merchants on ways to maximize the benefits from our international trade by the use of the appropriate incoterms in their trade contracts. .

Currently Ghanaian merchants export on FOB and import on CIF basis, the Free on Board and Cost, Insurance and freight terms. FOB export and CIF import means our local importers take delivery of their imports at the foreign port while our exporters take their goods from Ghana and deliver it to the ...