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Foreign trade contract with Uzbekistan 

In 2024, companies from Uzbekistan will enter into quite a lot of international contracts with counterparties from other countries. In January-December 2023, Uzbekistan’s foreign trade turnover amounted to $62.6 billion and increased by $12.1 billion or 23.9% compared to the same period in 2022. 

In the article we will talk about the basis of all international economic relations – about an international contract with counterparties from different countries. 

An international contract can be concluded for different types of economic relations. The most popular type is a contract for the supply of goods. The conclusion of an agreement is a confirmation of the will of the parties; there are several reasons why this must be done:

  1. A foreign trade contract confirms in writing the rights and obligations of the parties; 
  2. an international supply agreement confirms compliance with the principle of legality: the parties use the norms of international and national legislation; 
  3. the bank will not be able to transfer funds without a contract; 
  4. The contract determines how and under what law a possible dispute will be resolved. 

Foreign trade contract in 2024 

So, we realized that the contract will be the legal basis for any international economic relations. An international contract has universal rules and principles. 

Firstly, any contract has essential conditions; without them, the contract will be considered not concluded. Each type has its own essential conditions. For example, for a purchase and sale agreement, this is the subject of the agreement, its description and equipment. 

Secondly, the parties must choose the applicable law and court to resolve the dispute. They may use national or international private law. 

Also, the contract must be correctly drawn up, with all the rights and obligations of the parties, details written down, and there must be signatures of the parties. 

International contract expertise and due diligence 

Before concluding a contract with a company from Uzbekistan, experts suggest taking several actions that will reduce the risk of an international dispute. 

If you have a draft contract, then specialists can check it for compliance with national and international legislation, the possibility of risk and any legal errors. This procedure is called examination of an international contract. 

Due diligence is a check of a counterparty before entering into economic relations. It includes financial due diligence and legal due diligence. 

After a qualified examination of the contract and counterparties, partners can reduce legal and economic risks when concluding an international contract. 

Universal rules for an international contract in 2024 

1.1 Form of contract 

The contract must be concluded in writing signed by the parties. To understand the parties, you can draw up a contract in several languages.  

The most popular type of international contracts today is the supply agreement. Therefore, we will talk about universal rules using this agreement as an example. 

We can recommend you the following sections: 

  1. item; price; 
  2. terms of payment; term; 
  3. Applicable law and choice of court; 
  4. force majeure; 
  5. disputes and their consideration; 
  6. sanctions; 
  7. Details and signatures. 

1.2 Subject of the contract 

The subject of the contract is what one party will supply to the other. The product description deserves special attention. This can be the name, weight, volume of the product. 

It is also necessary to note the country of origin, including links to international or national standards for the specified product, the name of the packaging according to international classifiers, requirements for labeling of the product, its volume, weight or number of pieces, cargo volume, weight with and without packaging. 

If the product is fragile, then we write about it so that no one damages it during transportation. If the product is complex, for example a car, then we describe all its characteristics and details. 

Also, before concluding a contract, it is necessary to check whether there are any bans on the export or import of this product that may be established by the State Government. 

1.3 Contract price 

The contract price is calculated in monetary terms. The amount per unit of goods in the currency chosen by the parties. 

The parties may have terms and options for paying for the goods: immediately or in parts, prepayment, payment after signing documents on receipt of the goods. 

1.4. Delivery time 

It is very important for the parties to understand the deadline for delivery and acceptance of goods. 

As a rule, the period may depend on the location of the parties, delivery route, type of goods and other factors. If one of the parties violates the deadline, then the contract can write about liability 

All terms must be written in the international contract. 

1.5 Applicable law. National law or Incoterms 

In an international contract with a company from Uzbekistan, the parties must choose the law under which they will work. 

This may be national law, for example the law of Uzbekistan or a partner from another country. 

There are also Incoterms 2000 standards. These are universal international rules that regulate the procedure for the delivery of goods, the rights and obligations of the parties. 

To use Incoterms, you need to select one of the rules and write the abbreviation in the contract. Here’s an example: 

For example, we chose the term CFR Cost and Freight. This means that the parties have the following obligations: 

The seller must pay the costs and freight necessary to bring the goods to the named port of destination 

The risk of loss or damage to the goods, as well as any additional costs incurred after the goods have been shipped, pass from the seller to the buyer. 

The seller delivers when the goods pass the ship’s rail at the port of shipment. 

1.6 Responsibility of the parties to the contract 

For violation of the terms and conditions of delivery of goods, the party must bear responsibility. 

In some cases, circumstances arise that are not the control of the parties (war, natural disaster, pandemic). The law calls this force majeure, and it should be written about in the contract. 

The parties may agree on the following types of responsibilities: 

  1. Compensation for losses; 
  2. Fine, penalty, penalty, 
  3. Product repair guarantee. 

In the contract, liability can be written as follows: For late delivery of goods, the seller must pay a penalty in the amount of 0.3% per day of the amount of the goods. 

If a warranty period is established, then during this period the supplier is obliged to repair the product if problems arise with the product. 

1.7 Choice of court 

Since we are talking about an international contract, the question arises where the parties will resolve their dispute. 

Before, you can write about the pre-trial settlement of all disputes. For example, that all issues arising from this contract are resolved by filing a claim or mediation.  

Parties have several options when choosing a court. State court in one of the countries of the parties to the contract or international commercial arbitration. 

State Court: 

  1. Cheaper than commercial arbitration: 
  2. Has more formalities; 
  3. Longer trial times. 

International Arbitration: 

  1. More expensive than state court; 
  2. The parties choose the arbitrator, law, language and venue; 
  3. There are accelerated procedures with short deadlines; 
  4. Solutions are recognized in more than 170 countries. (Including in Uzbekistan). 

To choose a court, you need to write about it in the contract or enter into an additional agreement. 

1.8 Details of the parties and signatures 

When drawing up an agreement with Uzbekistan, it is necessary to remember the details of the parties. Below is a list of the required information in the contract. 

  1. Name of international companies, their address, tax number. 
  2. Contract number; 
  3. Place of conclusion of the contract; 

Also, the agreement must be signed by all parties. Only legal representatives of the company can sign the contract. To do this, there must be a power of attorney or a mention of this in the constituent documents of the organization. 

To check your credentials, you can ask a representative of the counterparty for a passport. 

Conclusion 

Drawing up an international contract with Uzbekistan has several features and difficult aspects. The specialist who draws up such an agreement must know international and national law. 

Our law firm can help you draw up such a contract. 

Our advantages: 

  1. we work online, all work is done online, you send technical specifications, we conclude an agreement online (exchange scanned copies), pay the invoice. 
  2. we have extensive experience in international private law; 
  3. We will study situations and documents; 
  4. we will develop a foreign trade contract; 
  5. we will send a report to the client; 
  6. We will translate into foreign languages if necessary.