In essence, international trade is the sale of goods. In international trade, the parties to the sale are in different countries and the goods travel from the country of the seller to the country of the buyer. This necessitates the formation of a contract for the carriage of the goods. In view of the incidental risks in transportation, the goods are usually insured. Various methods of payment for goods have also been devised to facilitate foreign trade. The respective national law governs the individual contracts for sale of goods and it is for the court to decide which national law would govern the contract by applying its own rules of private international law. In the English legal system, the courts apply any such law upon the contract of sale whichever is chosen by the parties themselves and in absence of such choice the court applies such system of law with which the contract is mostly connected. If the proper law of the contract is English law, in that case the English law relating to the sale of goods, i.e., the Sale of Goods Act, 1979 would apply to the contract of sale. Export sale contracts consist of five elements. Firstly, the there is the underlying contract of sale which sets forth the goods, the mode, place of delivery, the way payment is to be made and other incidentals. Secondly, there is the contract of carriage entered into either by the seller or buyer based on their respective obligations as laid out in the contract of sale. Thirdly, during transportation of goods from the buyer to the seller, there will be a contract of insurance for the goods. Fourthly, there are certain conditions required by the export and import authorities to be fulfilled by either the buyer or the seller. Lastly, the buyer has to determine particular mechanism of payment, whether by cash, by bill of exchange or by documentary credit.
