Types of international trade agreements

What is an international trade agreement?

An international trade agreement or a commercial contract is legally concluded between two natural or legal persons based on international trade laws or a country’s commercial law.

Types of international contracts in international trade

International Sales Agreements
Distribution Agreement
Franchise Agreement
Finance Contracts
Mutual sale agreement
Joint venture agreement
Licensing Agreement
Turn-Key contract
Built, operation and transfer (BOT)
International insurance agreements

1. International Sales Agreements

One of the most common agreements in the international business world is the international sales agreement. The transaction in this contract can be goods, services or technology. These types of contracts are mainly used in the export and import process.

2. Distribution Agreement

The international distribution contract is another type of contract that is used in international trade and commerce. In many cases, international businesses to sell their products or services, in international markets, act to grant commercial representation beyond the borders of their country. And these agents or distributors usually take on the task of marketing, distributing and selling the products of the parent company in one or more specific countries. In response to receiving obligations such as targets for minimum annual sales, the parent company assigns the exclusive sale of its products to the distributor, and the representative also sells them in the regional market while receiving a percentage of profit. It is worth noting that some businesses consider certain conditions for granting agency, for example, receiving an amount at the beginning of the business for the right to use the brand name, establishing strict standards regarding the conditions of agency branches such as: size, location and facilities. The case is among the conditions that reputable and large businesses can apply for agency.

3. Franchise Agreement

A franchise or franchise agreement is used to grant a license or a franchise. The owner of a business allows the other party to use his brand (license) or business system in the franchise agreement.

There are different types of franchise agreement:

Manufacturing franchise agreement
Service franchise agreement
Distributive franchise agreement

4. Finance Contracts

Due to the importance of trade and the expansion of international trade, financing contracts have also become international and cross-border over time. In this method, banks and other financial institutions provide financing for businesses in a country other than their home country. Basically, this model of contracts is mostly used in the financing of large projects and it is a vital necessity for internationalizing businesses.

5. Mutual sale agreement

It is another model of international contracts that is related to contracting contracts, for construction and project implementation. In this type of contract, usually the implementation of large construction and industrial projects, the construction of large projects such as: the construction of a refinery, power plant, etc. are among these cases. In the oil and gas industry of our country, this type of agreement is sometimes called a repurchase agreement. The mutual sale contract is considered a long-term contract in which the foreign party, as a contractor, takes responsibility for investing and equipping the project.

6. Joint venture agreement

One of the most widely used international contracts is the joint venture contract. When several commercial companies establish a uniform company in order to increase profits and gain more share in the market and share profits, losses, facilities and equipment, they use the joint venture contract.

7. Licensing Agreement

When a commercial company gives its other party in another country the right to use all or part of its intangible assets, it has to use a license agreement, and the duration of this type of agreement must be stated clearly and clearly.

8. Turn-Key contract

In a turn-key contract, you are dealing with both the employer and the contractor. In this contract, the first party, who is considered the employer, hands over all the responsibility of implementing a project to the second party, who is the contractor. And during the implementation process, the employer does not interfere in the implementation of the project and the contractor undertakes to deliver the project according to the written agreement with the employer in the turnkey contract.

9. Built, operation and transfer (BOT)

Mainly, Built, operation and transfer (BOT) contracts are concluded between large organizations and the government. In this type of contract, the government is the employer and the company is considered as the contractor. Usually, this type of contract is used in the construction of executive projects such as construction of dams, highways, refineries, etc.

10. International insurance agreements

Commercial operations such as transportation of goods in import or export need insurance because of the high risk and often the insurer and the policyholder reside in different countries, in which case international insurance contracts are used.

In conclusion

Each of the contracts mentioned in this section needs to be mentioned in many details and has many complexities that must be carefully arranged. To receive advice regarding the conclusion of international contracts or to examine legal issues in the field of international trade, contact the legal department of the Iran and Africa Business Club.

All.
blog

Types of international trade agreements

Types of international trade agreements

What is an international trade agreement?

Types of international contracts in international trade

1. International Sales Agreements

2. Distribution Agreement

3. Franchise Agreement

There are different types of franchise agreement:

4. Finance Contracts

5. Mutual sale agreement

6. Joint venture agreement

7. Licensing Agreement

8. Turn-Key contract

9. Built, operation and transfer (BOT)

10. International insurance agreements

In conclusion

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