Table of Contents
A contract checklist before signing a cross-border deal should cover eight things: who the parties are and who can bind them, what the goods are, the delivery term, the payment method, the governing law, the dispute route, the remedies, and the documents. Work through them in that order. Most trade disputes trace back to one of those eight being left loose.
General contract checklists are written for domestic service agreements. They tell you to check indemnities and termination. Fair enough. But they skip the parts that actually bite an exporter: the point where risk moves, the currency the price is set in, the screening you owe on the counterparty, and whether the contract wording will survive contact with a bank and a customs officer.
This one is built for goods moving between countries, and for the person who has to make the deal work after signature.
Parties, authority and the right to sign
Start with names. Get the full legal entity name of the other side, not the trading name on the website. Get the registration number and the registered address. A group may have a trading arm in one country and the asset-holding company in another. If you sue the wrong one, you win nothing.
Then check the signature. A purchasing manager may be able to commit the company for routine supply, but not for a liability cap waiver or an exclusivity term. Ask for evidence of authority when the deal sits outside the ordinary course of business.
- Confirm the exact legal entity name, registration number and registered office.
- Confirm the signatory’s title and authority to bind that entity.
- Check whether a parent guarantee is needed because the contracting entity holds no assets.
- Check the notice clause names a real address and a real role, not a departed individual.
Goods, specification and the delivery term
The description of goods has to do three jobs at once. It has to be commercially accurate, it has to match what goes on the invoice and the transport document, and it has to support the tariff classification you will declare. A vague description creates a customs problem later, and makes a quality dispute unwinnable.
Attach the specification as a schedule. Name the standard, the tolerance, the packing and the marking. State who inspects, where, and what follows a failed inspection.
Check the delivery term properly
A three-letter delivery term is the most compressed clause in the contract. It carries cost allocation, risk transfer, clearance duties and, in two of the rules, an insurance obligation. Write it with the named place and the version of the rules you mean. A term without a named place is an argument waiting to happen.
The Incoterms® rules are published by the International Chamber of Commerce. They allocate cost and risk between seller and buyer. They do not transfer title, they do not set the payment method, and they do not decide the governing law. Read a plain guide to exactly when risk passes from seller to buyer before you agree a term you have not used before. Note also that your choice of term feeds the declared customs value, so it affects duty. The relationship between the delivery term and the duty you pay is one of the quieter cost drivers in a supply agreement.
Check three things. Does the named place match the physical reality of the route. Does the party bearing risk at each leg also hold the insurance. Does the party responsible for export or import clearance actually have standing to file in that country.
Payment, credit risk and currency
Payment terms are where a good margin quietly disappears. Check the trigger, the period and the mechanism separately.
The trigger is the event that starts the clock: invoice date, shipment date, arrival, acceptance. Acceptance-based triggers hand the buyer control over when you get paid. The period is the number of days. The mechanism is the instrument: open account, advance payment, documentary collection or a documentary credit.
If the deal uses a documentary credit, the contract and the credit have to be compatible. The contract should say who opens it, by when, which bank confirms it, who pays the charges, and what happens if the credit arrives with terms that differ from the contract. A practical explanation of how a letter of credit works in practice is worth reading before you agree to one, because the bank pays against documents, not against goods.
- Name the currency and say who carries the exchange movement between order and payment.
- Set an interest rate basis for late payment, and a right to suspend further shipments.
- Check whether retention of title is stated, and whether it is effective in the buyer’s country.
The checklist by owner and timing
A checklist without an owner is a wish list. Assign each block to a function and to a point in the deal cycle. One person can hold several blocks, but every block needs a name against it.
| Checklist block | What you are checking | Usual owner | When it must be done |
|---|---|---|---|
| Parties and authority | Legal entity, registration, signatory power, guarantees | Legal or contract admin | Before the first draft is exchanged |
| Counterparty screening | Restricted party lists, ownership, end use, destination | Trade compliance | Before commercial terms are agreed |
| Goods and specification | Description, tolerance, packing, inspection, classification | Product or technical | Before pricing is fixed |
| Delivery term | Named place, risk point, clearance duty, insurance duty | Logistics with sales | Before the quotation is issued |
| Payment and currency | Trigger, period, instrument, currency, security | Finance or credit control | Before the order is accepted |
| Law and disputes | Governing law, forum, seat, language, enforceability | Legal | Before signature, never after |
| Remedies and limits | Liability cap, exclusions, delay damages, termination | Legal with the deal owner | Before signature |
| Document set | Invoice, transport document, origin proof, certificates | Documentation or shipping | Before signature, checked again pre-shipment |
Governing law, jurisdiction and dispute resolution
These are three separate choices and people collapse them into one. Governing law decides which country’s rules interpret the contract. Jurisdiction decides which courts hear a claim. An arbitration clause replaces the courts and has its own seat, rules and language.
The test that matters is enforcement. A judgment you cannot enforce where the other side keeps its assets is a piece of paper. Before you accept a forum, ask what you would actually do after winning, and in which country. Arbitration awards travel across borders more easily than court judgments in many trading relationships.
Check the language clause. If the contract exists in two languages, one version must be stated as controlling.
Remedies, liability caps and getting out
Read the remedies clause backwards. Start with what you get if the other side fails, then check whether another clause takes it away. A liability cap is normal. What matters is what sits inside it and what sits outside. Indirect and consequential loss is usually excluded, and the definition of those terms varies by legal system. Delay damages should be stated as an amount or a formula, with a ceiling, and the contract should say whether they are the only remedy for delay or sit alongside termination.
- Check the force majeure list covers route disruption, not only natural events.
- Check whether a sanctions or export control event is a permitted excuse for non-performance.
- Check what survives termination: confidentiality, audit rights, record keeping, warranty.
Risk allocation and remedies are one of the eight areas assessed in the Global Trade Contracts Specialist certification, alongside delivery terms, governing law, payment risk and the documents. If you are checking contracts regularly and working from instinct rather than a framework, a structured assessment is a reasonable way to find out where the instinct is wrong.
The compliance checks that belong before signature
Commercial checklists almost never mention these. They should, because they can stop a deal outright rather than just make it expensive.
Screen the counterparty, its owners and the end user against the restricted party lists that apply to you. Screening is not a one-off. A guide to how denied party screening works explains why ownership structures and rescreening intervals matter as much as the initial hit check. Then confirm whether the goods, software or technology need a licence for that destination, and who is responsible for obtaining it.
- Screen the buyer, any intermediary, the consignee and the end user.
- Confirm the destination and the end use are permitted for those goods.
- Identify who applies for any export or import licence, and what happens if it is refused.
- State which party is importer of record and which is exporter of record.
- Agree who holds the origin evidence if a preferential rate is being claimed, and for how long.
Put a clause in that lets you suspend or terminate without liability if performance would breach a sanction or a control. Without it, you are choosing between breaking the law and breaking the contract.
Make the contract and the documents agree
This is the check almost no general checklist includes, and it is the one that causes the most day-to-day pain. The contract, the commercial invoice, the packing list, the transport document and any documentary credit all describe the same shipment. If they describe it differently, someone refuses something.
Before signature, write out the document set the contract will require and check each one against the wording. Does the goods description on the export invoice match the contract schedule. Does the consignee named in the contract match the party the transport document will be issued to. Does the contract require a document that the carrier or the chamber in that country does not actually issue.
Certificates carry cost and lead time. If the buyer wants an inspection certificate from a specific body, put it in the price and the delivery schedule.
When the other side will not change the wording
Sometimes you have no bargaining power. A large buyer sends its standard terms and will not negotiate. The checklist still has a job here, and it is a different one.
Work through it and mark every item you cannot fix. Price that risk into the deal where you can. Record the decision in writing so it has an owner and a date. Then put an operational control around it, such as a tighter credit limit or advance payment on the first orders.
A side letter can fix a single point without reopening the whole agreement. Keep it short, reference the main contract clause by number, and have it signed by someone with authority over that clause. An email from a buyer’s logistics coordinator does not vary a signed contract.
One more habit worth building. After signature, extract every dated obligation into a short register: licence applications, credit opening dates, inspection windows, notice deadlines, expiry dates. The contract is where the obligations live. The register is where they get done. Knowing what the GTCS exam covers gives you a usable map of those obligation types, because the domains follow the structure of a trade contract rather than a legal textbook.
Key takeaways
- Check the legal entity and the signatory’s authority before you check any commercial term.
- A delivery term needs a named place, a version of the rules, and a check that risk and insurance sit with the same party.
- Governing law, jurisdiction and arbitration are three separate choices, and enforcement is the test that decides them.
- Counterparty screening and licence responsibility belong before the commercial terms are agreed, not after signature.
- The contract, the invoice, the transport document and any documentary credit must describe the same goods and the same parties.
- When you cannot change the wording, price the risk, record the decision with an owner, and add an operational control.
- The Global Trade Contracts Specialist (GTCS)™ Certification is an online assessment of 60 questions in 60 minutes, with an 85% pass mark and one included retake.
Frequently asked questions
What should be on a contract checklist before signing?
Eight blocks: parties and signing authority, goods and specification, delivery term and risk transfer, payment and currency, governing law and dispute route, remedies and liability limits, compliance screening and licences, and the document set. For a cross-border deal, add a check that the contract wording matches what the invoice, the transport document and any bank instrument will say.
Who should review a trade contract before signature?
At minimum the deal owner in sales or procurement, someone in finance for payment and currency, and someone with trade compliance responsibility for screening, licences and origin. Legal reviews law, liability and termination. In a small company one person may cover several of these, but each block still needs a named owner so nothing falls between functions.
Does a delivery term decide when title passes?
No. Delivery terms allocate cost and risk, and they say who handles clearance. Title transfer is governed by the contract and the applicable law, and it is often tied to payment through a retention of title clause. Write the title provision separately. Assuming the delivery term handles it is a common and expensive mistake.
What happens if the contract and the letter of credit conflict?
The bank pays against the credit, not the contract. If the credit demands a document the contract never required, you either produce it or accept a discrepancy. Build a clause requiring the credit to be issued in terms consistent with the contract, with a right to require amendment at the applicant’s cost before shipment begins.
Is a signed purchase order enough without a full contract?
It can be binding, which is the problem. Purchase orders often carry standard terms on the reverse or by reference to a web page. Those terms may set the governing law, the liability position and the payment trigger. Read what the order incorporates before you acknowledge it, because acknowledgement can be acceptance.
Does a contracts certification help with pre-signature review?
It helps if the gap is knowledge of what the clauses do. A contracts assessment tests delivery terms, payment risk, governing law, remedies, documents, classification and origin, and sanctions. It does not replace legal advice on a specific deal. The GTCS certification introduction sets out the eight domains, the format and what the result report shows.
GTCS is an independent Globalior assessment. It is not affiliated with, endorsed by, or accredited by the International Chamber of Commerce.
If you want to talk through how this checklist fits your own approval process, get in touch with the Globalior team.